In this article, we discuss the 5 best dividend stocks for steady growth. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Dividend Stocks For Steady Growth.
5. Black Hills Corporation (NYSE:BKH)
Number of Hedge Fund Holders: 14
Consecutive Years of Dividend Growth: 51
Forward Dividend Yield: 3.50%
Mizuho analyst Paul Fremont recently raised the price target on Black Hills Corporation (NYSE:BKH) stock to $67 from $60 and reiterated a Neutral rating, noting that “constructive outcomes” were expected from the general rates cases the firm was involved in. In late August, the company had priced a $600 million debt offering to repay outstanding loans and fund general corporate purposes.
Black Hills Corporation (NYSE:BKH) had earlier beat market expectations on earnings per share by $0.01 in the second quarter results, reporting $372 million in revenue over the period, up more than 14% year-on-year.
At the end of the second quarter of 2021, 14 hedge funds in the database of Insider Monkey held stakes worth $62 million in Black Hills Corporation (NYSE:BKH), down from 18 the preceding quarter worth $89 million.
4. Federal Realty Investment Trust (NYSE:FRT)
Number of Hedge Fund Holders: 16
Consecutive Years of Dividend Growth: 54
Forward Dividend Yield: 3.46%
Last month, Federal Realty Investment Trust (NYSE:FRT) purchased Fairfax, a shopping center in Virginia, for $34 million in cash. The firm said it expected to increase the value of the property over time by remerchandising and capital investments. The company pays a regular and healthy dividend. In early August, it declared a quarterly dividend of $1.07 per share, an increase of close to 1% from the previous dividend of $1.06 per share.
Deutsche Bank analyst Derek Johnston had raised the price target on Federal Realty Investment Trust (NYSE:FRT) stock to $140 from $129 earlier this month, reiterating a Buy rating on the shares.
Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm AEW Capital Management is a leading shareholder in Federal Realty Investment Trust (NYSE:FRT) with 374,347 shares worth more than $43 million.
3. Sysco Corporation (NYSE:SYY)
Number of Hedge Fund Holders: 40
Consecutive Years of Dividend Growth: 51
Forward Dividend Yield: 2.31%
Sysco Corporation (NYSE:SYY) is a food distributor with solid fundamentals. It beat market predictions on earnings per share and revenue in the fourth fiscal quarter results. The share price of the firm has soared since the results were announced since the company has positioned itself well for inflation fears, striking a positive tone on the subject that has buoyed investor interest in the stock.
On July 29, investment advisory UBS initiated coverage of Sysco Corporation (NYSE:SYY) stock with a Buy rating and a price target of $89. Analyst Mark Carden touted the balance sheet strength and the strategic initiatives of the firm as some of the reasons behind the bullish view.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Trian Partners is a leading shareholder in Sysco Corporation (NYSE:SYY) with 17.8 million shares worth more than $1.3 billion.
2. Stanley Black & Decker, Inc. (NYSE:SWK)
Number of Hedge Fund Holders: 44
Consecutive Years of Dividend Growth: 54
Forward Dividend Yield: 1.74%
Stanley Black & Decker, Inc. (NYSE:SWK) is one of the most popular industrial stocks in the United States and has fundamentals that match the name it has built for itself over the years. The company beat market expectations on earnings per share and revenue in the second quarter by $0.19 and $70 million respectively. It also declared a quarterly dividend of $0.79 per share in July, an increase of close to 13% from the previous dividend of $0.70 per share.
Wells Fargo analyst Joseph O’Dea initiated coverage of Stanley Black & Decker, Inc. (NYSE:SWK) stock with an Overweight rating and a price target of $227 earlier this month, noting the stock had “compelling value”.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Management is a leading shareholder in Stanley Black & Decker, Inc. (NYSE:SWK) with 1 million shares worth more than $211 million.
1. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 47
Consecutive Years of Dividend Growth: 51
Forward Dividend Yield: 7.48%
Jefferies analyst Owen Bennett kept a Buy rating on Altria Group, Inc. (NYSE:MO) stock on October 19 with a price target of $55 ahead of the expected third quarter earnings report of the firm. According to a forecast by Bank of America, the company will beat market expectations on earnings. In late August, the firm had declared a quarterly dividend of $0.90 per share, up 5% from the previous dividend of $0.86 per share.
Altria Group, Inc. (NYSE:MO) was founded in 1822 and markets tobacco products. It has over 7,000 employees and is headquartered in Virginia. The firm has a market cap of over $89 billion and posted more than $20 billion in revenue last year.
At the end of the second quarter of 2021, 47 hedge funds in the database of Insider Monkey held stakes worth $948 million in Altria Group, Inc. (NYSE:MO), up from 38 in the previous quarter worth $1.1 billion.
In its Q2 2021 investor letter, Broyhill Asset Management, an asset management firm, highlighted a few stocks and Altria Group, Inc. (NYSE:MO) was one of them. Here is what the fund said:
“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
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