In this article, we discuss 5 best dividend stocks for steady growth. If you want to read our detailed analysis of dividend investing and past returns of dividend stocks, go directly to read 10 Best Dividend Stocks for Steady Growth.
5. FedEx Corporation (NYSE:FDX)
Dividend Yield as of October 4: 2.92%
5-Year Compound Average Dividend Growth Rate: 16.12%
FedEx Corporation (NYSE:FDX) is an American holding company that focuses on transportation, e-commerce, and business services around the globe. In fiscal Q1 2023, the company reported revenue of $23.2 billion, up 5.5% from the same period last year. The company’s operating cash flow stood at over $1.6 billion and its free cash flow was recorded at $323 million.
On August 12, FedEx Corporation (NYSE:FDX) declared a quarterly dividend of $1.15 per share, consistent with its previous dividend. In 2022, the company marked its 21st consecutive year of dividend growth, with a five-year dividend CAGR of 16.12%. As of October 4, the stock has a dividend yield of 2.92%.
In September, Stephens maintained an Overweight rating on FedEx Corporation (NYSE:FDX) with a $200 price target. The firm mentioned that the company has managed its earnings well over the past.
The number of hedge funds tracked by Insider Monkey owning stakes in FedEx Corporation (NYSE:FDX) stood at 63 in Q2 2022, growing from 52 in the previous quarter. These stakes hold a consolidated value of over $1.75 billion.
Artisan Partners mentioned FedEx Corporation (NYSE:FDX) in its Q2 2022 investor letter. Here is what the firm has to say:
“FedEx Corporation (NYSE:FDX), a global shipping and logistics firm, was another relative winner in Q2. Its stock price was mostly unchanged in Q2, which made it a strong outperformer in a weak quarter for US stocks. Over the past 12-18 months, the stock has suffered from weak sentiment as labor cost headwinds and air network disruptions have overshadowed solid top-line trends. However, the stock’s reaction to the company’s first investor day in 10 years may be an early sign that the company is beginning to get more credit for its improved governance. At the investor day, new CEO Raj Subramanian outlined the company’s multi-year financial plan targeting EPS growth of 14%-19% driven by revenue growth of 4%-6% and increased operating margins from technology investments and efficiency gains, as well as an increase in its dividend payout ratio to 25% from ~20%. With the company’s mixed record of achieving its targets, we believe there remains a fair amount of skepticism embedded in the current stock price as it sells at just 10X our estimated normalized earnings power.”
4. Amgen Inc. (NASDAQ:AMGN)
Dividend Yield as of October 4: 3.34%
5-Year Compound Average Dividend Growth Rate: 11.24%
Amgen Inc. (NASDAQ:AMGN) is a California-based biotech company that provides treatments to patients suffering from serious illnesses. In August, Piper Sandler raised its price target on the stock to $265 with an Overweight rating on the shares, appreciating the company’s another quarter of solid execution with strong performances in its overall franchises.
In Q2 2022, Amgen Inc. (NASDAQ:AMGN) reported an operating cash flow of $2 billion, in line with the previous quarter. The company’s free cash flow came in at $1.7 billion, which also remained consistent with its cash flow in the previous quarter. During the quarter, its cash and investments amounted to $7.2 billion.
Amgen Inc. (NASDAQ:AMGN) currently pays a quarterly dividend of $1.94 per share and has a dividend yield of 3.34%, as of October 4. The company has been raising its dividends consistently for the past 10 years and has raised its payouts at a CAGR of 11.24% in the past five years.
At the end of June 2022, 55 hedge funds in Insider Monkey’s database owned stakes in Amgen Inc. (NASDAQ:AMGN), compared with 56 in the previous quarter. The total value of these stakes is over $2.17 billion. Two Sigma Advisors was the company’s leading stakeholder in Q2.
3. Franklin Resources, Inc. (NYSE:BEN)
Dividend Yield as of October 4: 5.04%
5-Year Compound Average Dividend Growth Rate: 7.71%
Franklin Resources, Inc. (NYSE:BEN) is an American multinational holding company and is one of the world’s largest investment managers. In Q2 2022, the company’s operating cash flow grew to $820 million, from $506 million during the same period last year. Its free cash flow stood at $806.7 million, up from $461.7 million in the prior-year quarter. The company ended the quarter with $5.5 billion available in cash and cash equivalents.
On August 29, Franklin Resources, Inc. (NYSE:BEN) declared a quarterly dividend of $0.29 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past 42 years with a five-year dividend CAGR of 7.71%. The stock’s dividend yield came in at 5.04%, as of October 4.
At the end of Q2 2022, 24 hedge funds in Insider Monkey’s database owned investments in Franklin Resources, Inc. (NYSE:BEN), with a total value of over $217.2 million.
2. Best Buy Co., Inc. (NYSE:BBY)
Dividend Yield as of October 4: 5.23%
5-Year Compound Average Dividend Growth Rate: 20.77%
Best Buy Co., Inc. (NYSE:BBY) is a Minnesota-based consumer electronics company that also sells other related products to consumers.
According to Insider Monkey’s data, 26 hedge funds owned stakes in Best Buy Co., Inc. (NYSE:BBY) in Q2 2022, up from 25 in the previous quarter. The consolidated value of these stakes is over $406.8 million, compared with $251.4 million worth of stakes owned by hedge funds in the preceding quarter.
Best Buy Co., Inc. (NYSE:BBY) currently pays a quarterly dividend of $0.88 per share, with a dividend yield of 5.23%, as of October 4. The company has been raising its dividends consistently for the past nine years, coming through as one of the best dividend stocks for steady growth.
In August, Wedbush raised its price target on Best Buy Co., Inc. (NYSE:BBY) to $80 with a Neutral rating on the shares, highlighting the company’s Q2 results and its guidance for upcoming quarters.
1. Devon Energy Corporation (NYSE:DVN)
Dividend Yield as of October 4: 6.90%
5-Year Compound Average Dividend Growth Rate: 34.7%
Devon Energy Corporation (NYSE:DVN) is an American energy company that specializes in the exploration of hydrocarbons. The company has been making consistent dividend payments for the past 29 years and has raised its payouts every year since 2016. On August 1, it announced a 22% hike in its quarterly dividend to $1.55 per share. As of October 4, the stock has a dividend yield of 6.90%.
In August, Mizuho raised its price target on Devon Energy Corporation (NYSE:DVN) to $91 with a Buy rating on the shares, following the company’s quarterly earnings. The firm expects the company to generate higher cash returns in comparison with the broader market.
At the end of Q2 2022, 57 hedge funds tracked by Insider Monkey owned stakes in Devon Energy Corporation (NYSE:DVN), compared with 66 in the previous quarter. These stakes are collectively valued at $1.48 billion. With roughly 15 million DVN shares, GQG Partners was the company’s leading stakeholder in Q2.
GoodHaven Capital Management mentioned Devon Energy Corporation (NYSE:DVN) in its Q2 2022 investor letter. Here is what the firm has to say:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
You can also take a look at 11 Best Dividend Paying Stocks To Buy Now and 10 Very High Yield Dividend Stocks to Check Out
