5 Best Dividend Leaders to Buy According to Hedge Funds

In this article, we discuss 5 best dividend leaders to buy according to hedge funds. If you want to see more stocks in this selection, check out 15 Best Dividend Leaders to Buy According to Hedge Funds. 

5. Philip Morris International Inc. (NYSE:PM)

Number of Hedge Fund Holders: 63

Dividend Yield as of February 3: 4.95%

Philip Morris International Inc. (NYSE:PM) operates as a tobacco company with a product portfolio that consists of cigarettes and smoke-free products, including heat-not-burn, vapor, and oral nicotine products. On January 12, Philip Morris International Inc. (NYSE:PM) entered into a long-term collaboration with KT&G, a South Korean tobacco and nicotine manufacturer, to commercialize their smoke-free products worldwide on an exclusive basis. This builds on their three years of successful collaboration in which Philip Morris International Inc. (NYSE:PM) has already commercialized KT&G’s products in over 30 markets. The agreement extends till January 29, 2038. It is one of the best dividend leaders to invest in. 

On February 2, Morgan Stanley analyst Pamela Kaufman raised the price target on Philip Morris International Inc. (NYSE:PM) to $118 from $109 and kept an Overweight rating on the shares ahead of the company’s Q4 report. The analyst cited the positive impact of the Swedish Match acquisition and favorable foreign exchange impacts as reasons for the increase in 2023 estimates by approximately 9%.

According to Insider Monkey’s data, 63 hedge funds were bullish on Philip Morris International Inc. (NYSE:PM) at the end of Q3 2022, compared to 56 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 17.4 million shares worth $1.4 billion. 

Here is what Distillate Capital has to say about Philip Morris International Inc. (NYSE:PM) in its Q3 2022 investor letter:

“It makes intuitive sense that our process that employs bottom-up stock selection based on the combination of valuation and quality would reduce the weight in places that outperformed and add to areas that were weaker. The largest exited positions in the quarter were Philip Morris International Inc. (NYSE:PM), which saw its stability score fall slightly below the threshold for inclusion.”

4. Cisco Systems, Inc. (NASDAQ:CSCO)

Number of Hedge Fund Holders: 68

Dividend Yield as of February 3: 3.10%

Cisco Systems, Inc. (NASDAQ:CSCO) is a California-based designs, manufactures, and sells networking products based on Internet Protocol technology, along with related products in the communications and IT sector. On January 17, Piper Sandler analyst James Fish raised the firm’s price target on Cisco Systems, Inc. (NASDAQ:CSCO) to $49 from $47 and kept a Neutral rating on the shares.  Ahead of the Q4 earnings, the analyst has made changes to his estimates and valuations for the cloud automation software industry.

Cisco Systems, Inc. (NASDAQ:CSCO) is one of the best dividend leaders to monitor. According to Insider Monkey’s Q3 data, 68 hedge funds were bullish on Cisco Systems, Inc. (NASDAQ:CSCO), compared to 63 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the biggest stakeholder of the company, with 9.70 million shares worth $388 million. 

In its Q1 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Cisco Systems, Inc. (NASDAQ:CSCO) was one of them. Here is what the fund said:

“Cisco Systems (NASDAQ:CSCO) traded lower as investors weighed how supply chain concerns would impact sales growth. The company has been upgrading its switching and routing offerings, which should lead to strong demand as on-site locations upgrade infrastructure.”

3. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 75

Dividend Yield as of February 3: 3.23%

Exxon Mobil Corporation (NYSE:XOM) is one of the best dividend leaders to buy according to smart investors. On January 31, Exxon Mobil Corporation (NYSE:XOM) declared a $0.91 per share quarterly dividend, in line with previous. The dividend is payable on March 10, to shareholders of record on February 14. The company has decided to buy back a portion of its outstanding shares, which can help increase the value of the remaining shares. Exxon Mobil Corporation (NYSE:XOM) has set a limit of $35 billion for the total amount it will spend on share repurchases in the 2023-2024 period.

On February 2, Argus analyst Bill Selesky raised the firm’s price target on Exxon Mobil Corporation (NYSE:XOM) to $133 from $128 and kept a Buy rating on the shares. The analyst explained that the increase in earnings in the fourth quarter can be attributed to higher crude oil and natural gas prices and an increase in production. Despite the significant growth of Exxon Mobil’s shares in both 2022 and 2023, the analyst believes that the future looks promising due to strong energy market fundamentals.

According to Insider Monkey’s data, 75 hedge funds were long Exxon Mobil Corporation (NYSE:XOM) at the end of September 2022, compared to 72 funds in the prior quarter. Rajiv Jain’s GQG Partners is the leading position holder in the company, with 33.8 million shares worth $3 billion. 

In its Q2 2022 investor letter, First Eagle Investments, an asset management firm, highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:

“Integrated oil and gas giant Exxon Mobil Corporation (NYSE:XOM) performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industry wide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

2. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 80

Dividend Yield as of February 3: 4.06%

AbbVie Inc. (NYSE:ABBV) discovers, develops, manufactures, and sells pharmaceuticals worldwide. It is one of the best dividend leaders to invest in. On October 28, AbbVie Inc. (NYSE:ABBV) declared a $1.48 per share quarterly dividend, a 5% increase from its prior dividend of $1.41. The dividend is payable on February 15, to shareholders of record on January 3. 

On January 26, Chris Schott, an analyst at JPMorgan, said that the recent decline in AbbVie’s stock is a chance to purchase shares. The analyst believes that the company’s 2023 guidance, which will be announced on February 9, will lead to an expansion of its multiple. As the focus shifts from declining earnings to promising growth prospects in 2025 and beyond with limited loss of exclusivity, the analyst sees a clear path for growth. Despite the recent drop in stock prices due to weak oncology guidance, JPMorgan remains optimistic about AbbVie’s future and continues to recommend an Overweight rating with a target price of $190.

According to Insider Monkey’s Q3 data, 80 hedge funds were long AbbVie Inc. (NYSE:ABBV), compared to 71 funds in the earlier quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a prominent stakeholder of the company, with 3.2 million shares worth $431.60 million. 

Alger Capital made the following comment about AbbVie Inc. (NYSE:ABBV) in its Q4 2022 investor letter:

“AbbVie Inc. (NYSE:ABBV) is a global biopharmaceutical company that develops and markets drugs in areas such as immunology. virology and oncology. Recently, the company expanded through the acquisition of Allergan, which added robust growth assets to help offset the loss of U.S. patent protection for Humira, a leading treatment used for rheumatology, dermatology. gastroenterology, and ophthalmology. While AbbVie reported weak third quarter revenues across the board, the U.S. Food and Drug Administration (FDA) approved Vraylar (an antipsychotic treatment) in December. Despite concerns around Humira’s loss of patent protection, we believe AbbVie has significantly diversified its revenue and that its launch of Rinvog for psoriatic arthritis and atopic dermatitis could be promising.”

1. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Holders: 85

Dividend Yield as of February 3: 3.98%

Citigroup Inc. (NYSE:C) was founded in 1812 and is headquartered in New York. It is a diversified financial services holding company that provides financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa. Citigroup Inc. (NYSE:C) is one of the best dividend leaders to monitor. 

On January 12, Citigroup Inc. (NYSE:C) declared a quarterly dividend of $0.51 per share, in line with previous. The dividend is payable on February 24, to shareholders of record on February 6. Citigroup Inc. (NYSE:C)’s revenues of $18.0 billion in the fourth quarter of 2022 also increased 6%.

BofA analyst Ebrahim Poonawala on January 16 raised the firm’s price target on Citigroup Inc. (NYSE:C) to $60 from $52 and maintained a Buy rating on the shares following the Q4 results. The analyst believes management has done a “commendable job” over the last twelve months in building capital and executing on consumer business exits. 

According to Insider Monkey’s third quarter database, 85 hedge funds were bullish on Citigroup Inc. (NYSE:C), compared to 82 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with over 55 million shares worth $2.3 billion. 

In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE:C) was one of them. Here is what the fund said:

“Shares of Citigroup Inc. (NYSE:C) declined in the quarter as investors became increasingly negative on capital markets activity. The company is also continuing to divest certain consumer banking geographies which may be dilutive to earnings in the near term.”

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