5 Best Dividend Stocks For Rising Interest Rates

In this article, we discuss 5 best dividend stocks for rising interest rates. If you want to read our detailed analysis of stocks in high-interest rate periods and the performance of dividend stocks, go directly to read 12 Best Dividend Stocks For Rising Interest Rates. 

5. Colgate-Palmolive Company (NYSE:CL)

Number of Hedge Fund Holders: 61
Dividend Yield as of April 4: 2.55%

Colgate-Palmolive Company (NYSE:CL) is an American multinational consumer products company that specializes in household, healthcare, and other personal care products. In March, UBS raised its price target on the stock to $86 and maintained a Buy rating on the shares, highlighting the company’s organic revenue growth over the past few years.

Colgate-Palmolive Company (NYSE:CL) is one of the best dividend stocks on our list as the company has raised its payouts consistently for the past 61 years. The company offers a quarterly dividend of $0.48 per share and has a dividend yield of 2.55%, as of April 4.

At the end of December 2022, 61 hedge funds in Insider Monkey’s database had stakes in Colgate-Palmolive Company (NYSE:CL), compared with 57 in the previous quarter. The consolidated value of these stakes is over $4.46 billion.

Third Point mentioned Colgate-Palmolive Company (NYSE:CL) in its Q4 2022 investor letter. Here is what the firm has to say:

“Colgate-Palmolive Company (NYSE:CL) remains one of the firm’s largest equity positions. The company offers defensive growth at a reasonable valuation, and we continue to see the potential for shares to deliver attractive risk adjusted returns over the next several years.

Fourth Quarter results were disappointing. The company missed on gross margins, guided 2023 well below the Street, and took another large impairment charge on its portfolio of skin care brands. The price action on the day of the print (down 5%) was extreme and perhaps reflective of growing investor frustration that the company has failed to sustainably grow earnings over the past decade.”

3. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 62
Dividend Yield as of April 4: 2.81%

The Home Depot, Inc. (NYSE:HD) is next on our list of the best dividend stocks. The company pays a quarterly dividend of $2.09 per share and has a dividend yield of 2.81%, as of April 4. It maintains a 13-year streak of consistent dividend growth.

In February, Truist maintained a Buy rating on The Home Depot, Inc. (NYSE:HD), highlighting the resiliency of home improvement overall.

According to Insider Monkey’s Q4 2022 database, 62 hedge funds owned stakes in the company, with a total value of over $4.8 billion.

Matrix Asset Advisors mentioned The Home Depot, Inc. (NYSE:HD) in its Q3 2022 investor letter. Here is what the firm has to say:

“During the quarter, we re-established a position in The Home Depot, Inc. (NYSE:HD) sold earlier this year, after the shares declined sharply on big picture concerns about a softer housing market and lower consumer spending. We believe that HD is a very well-managed company, positioned to continue showing good profits even as the economy decelerates. The products it carries in inventory are in year-round demand from contractors and homeowners wanting to maintain and improve their homes. The company has historically been shareholder friendly, repurchasing shares and increasing the dividend, most recently by 15% earlier this year. On September 30, HD’s current dividend yield was 2.8%.”

3. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 66
Dividend Yield as of April 4: 0.72%

Costco Wholesale Corporation (NASDAQ:COST) is an American big-box retail company. Roth MKM lifted its price target on the stock to $494 in March with a Neutral rating on the shares, presenting a conservative outlook on the company’s performance this year.

Costco Wholesale Corporation (NASDAQ:COST), one of the best dividend stocks, currently pays a quarterly dividend of $0.90 per share for a dividend yield of 0.72%, as of April 4. The company has been rewarding shareholders with growing dividends for 18 years now.

As per Insider Monkey’s Q4 2022 database, 66 hedge funds owned stakes in Costco Wholesale Corporation (NASDAQ:COST), with a total value of $3.4 billion.

Madison Funds mentioned Costco Wholesale Corporation (NASDAQ:COST) in its Q4 2022 investor letter. Here is what the firm has to say:

“Costco Wholesale Corporation (NASDAQ:COST) stock fell after November sales results showed a slowing consumer. The slower November sales were followed by a slight first quarter miss with lower-than-expected margins. Costco commented that they are not seeing trade-down but private label penetration has increased modestly. Traffic continues to be positive, and Costco remains well-positioned in a more challenging macro environment due to its strong value proposition.”

2. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 79
Dividend Yield as of April 4: 3.13%

Exxon Mobil Corporation (NYSE:XOM) is a Texas-based oil and natural gas company. The company pays a quarterly dividend of $0.91 per share and has a dividend yield of 3.13%, as of April 4. It is one of the best dividend stocks on our list as it maintains a 40-year streak of consistent dividend growth.

At the end of Q4 2022, the number of hedge funds owning stakes in Exxon Mobil Corporation (NYSE:XOM) grew to 79, from 75 a quarter earlier, according to Insider Monkey’s Q4 data. These stakes have a collective value of over $7.1 billion.

1. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 100
Dividend Yield as of April 4: 3.08%

Bank of America Corporation (NYSE:BAC) is an American multinational investment bank and financial services company. It tops our list of the best dividend stocks as it was a part of 100 hedge fund portfolios in Q4 2022, as per Insider Monkey’s data. The stakes owned by these hedge funds have a total value of $37.5 billion.

Bank of America Corporation (NYSE:BAC) currently offers a quarterly dividend of $0.22 per share and has a dividend yield of 3.08%, as recorded on April 4. The company holds a 9-year track record of consistent dividend growth.

Ariel Investments mentioned Bank of America Corporation (NYSE:BAC) in its third-quarter 2022 investor letter. Here is what the firm has to say:

“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”

You can also take a look at 12 Best Low-Priced Technology Stocks To Invest In and 12 Technology Stocks To Buy That Are Too Cheap To Ignore

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