In this article we discuss the 5 best dividend stocks for Roth IRA. We picked these dividend stocks based on billionaire Ken Fisher’s Q1 portfolio. If you want to read our detailed analysis of Ken Fisher’s history and hedge fund performance, go directly to the 10 Best Dividend Stocks for Roth IRA.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind, let’s take a look at the best dividend stocks for Roth IRA.
5. BHP Group (NYSE: BHP)
Number of Hedge Fund Holders: 18
The mining company BHP Group (NYSE: BHP) is a famous stock among dividend investors amid its high dividend yield of 5.45%. Ken Fisher raised its position in BHP Group by 2% to 7.98 million shares at the end of the first quarter, accounting for 0.39% of the overall portfolio. In addition to cash returns in the form of dividends, investors also benefited from its share price surge of 58% in the last twelve months.
BHP Group saw a decrease in hedge funds interest recently. It was in 18 hedge funds’ portfolios at the end of the March quarter, compared to 20 positions in the previous quarter.
4. GlaxoSmithKline Plc. (NYSE: GSK)
Number of Hedge Fund Holders: 25
Pharmaceutical company GlaxoSmithKline Plc. (NYSE: GSK) is a member of Ken Fisher’s hedge fund portfolio over the last two decades. At the end of the first quarter, the firm held more than 17 million shares of GSK, accounting for 0.43% of the overall portfolio. GSK offers a quarterly dividend of $0.53 per share, yielding around 5.61%.
3. Chevron Corporation (NYSE: CVX)
Number of Hedge Fund Holders: 41
Ken Fisher raised his stake in Chevron Corporation (NYSE: CVX) by 3% during the first quarter to 5.82 million shares, accounting for 0.43% of the overall portfolio. Chevron Corporation is among a few oil companies that have sustained their dividends during the pandemic year, thanks to its assets sales strategy along with strong cash generation potential. It currently offers a quarterly dividend of $1.34 per share, yielding around 5.16%.
Nelson Capital Management, an investment management firm, highlighted a few stocks including Chevron Corporation in the first quarter investor letter. Here is what Nelson Capital Management stated:
“In the energy sector, we bought a position in Chevron. As interest rates have increased, we have witnessed a rotation out of growth and momentum stocks and into value stocks. We think this trend could continue, which would be advantageous for Chevron. Additionally, we anticipate an uptick in oil and gas demand as more people get vaccinated and air travel picks up. Higher oil prices coupled with increased demand should lead to better earnings results for Chevron, which will enable it to support (or perhaps grow) its Large 5% dividend.”
2. Rio Tinto Plc (NYSE: RIO)
Number of Hedge Fund Holders: 25
The iron ore mining company Rio Tinto Plc (NYSE: RIO) is a dependable stock for dividend investors. The company raised its dividends in the past four straight years. Its dividend yield is around 7% and it offers a semiannual dividend of $3.09 per share. In addition to dividends, the company’s share price appreciated close to 66% in the last twelve months.
1. TOTAL SE (NYSE: TOT)
Number of Hedge Fund Holders: 17
With a dividend yield of over 6%, Total SA (NYSE: TOT) represents 0.73% of the Fisher Asset Management portfolio at the end of the first quarter. The company has a long history of returning cash to investors in the form of dividends. Furthermore, its share price rallied sharply since the beginning of this year on the back of improving oil prices.
Total saw growth in hedge fund confidence recently. The number of bullish hedge funds’ positions increased to 17 at the end of the first quarter compared to 14 positions in the prior quarter.
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