5 Best Dividend Stocks of 2023

In this article, we discuss 5 best dividend stocks of 2023. If you want to read our detailed analysis of dividend stocks and their performance over the years, go directly to read  15 Best Dividend Stocks of 2023.

5. Microsoft Corporation (NASDAQ:MSFT)

Year-to-date Returns as of April 28: 27.5%

Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech company. RBC Capital raised its price target on the stock in April to $350 and maintained an Outperform rating on the shares, appreciating the company’s recent earnings beat. The firm also highlighted the company’s AI segment.

Microsoft Corporation (NASDAQ:MSFT) is one of the best dividend stocks on our list as it maintains a 16-year streak of consistent dividend growth. The company currently pays a quarterly dividend of $0.68 per share and has a dividend yield of 0.89%, as of April 28. The stock is up 27.5% year-to-date.

Microsoft Corporation (NASDAQ:MSFT) was the most popular company among elite funds in Q4 2022, according to Insider Monkey’s database. 259 hedge funds owned stakes in the company, with a total value of over $58.6 billion.

Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q4 2022 investor letter. Here is what the firm has to say:

“Shares of mega-cap software company Microsoft Corporation (NASDAQ:MSFT) outperformed despite a mixed fiscal first quarter due to macro challenges that negatively impacted results and guidance, including foreign exchange headwinds, weakening PC demand, and a cyclical slowdown in advertising spending. Total revenue beat Street expectations at 16% constant-currency growth (vs. estimates of 14%), but its Azure cloud computing business missed analyst projections by 1% for the second straight quarter, though it still grew a robust 42% year-over-year, as Microsoft helped its customers optimize existing workloads due to the macro backdrop. While the optimization of workloads is a short-term headwind, we believe it is the right thing to do and should help drive more consumption with customers over time. Our research continues to indicate that the longer-term secular trend of cloud computing remains healthy and intact. For example, in its fourth quarter CIO survey report, Morgan Stanley showed, among other things, that cloud computing was the second highest CIO spending priority (behind only security software), that cloud application workloads were expected to increase from 27% of total workloads today to 46% by the end of 2025, and that Azure was listed as the preferred cloud vendor and likely to take share over the short and long term.9 Additionally, Microsoft is positioned to be a prime beneficiary of ChatGPT. Microsoft invested $1 billion in OpenAI in 2020 and is rumored to be considering investing an additional $10 billion for a 49% stake in the company. Moreover, ChatGPT runs on Microsoft’s Azure platform, and Microsoft recently announced the general availability of its Azure OpenAI Service enabling Azure customers to access advanced AI models, including ChatGPT itself soon. We remain bullish on Microsoft’s long-term opportunity in the cloud, and believe AI has the potential to be additive to growth for years to come.”

4. Pentair plc (NYSE:PNR)

Year-to-date Returns as of April 28: 27.6%

A Minnesota-based water treatment company, Pentair plc (NYSE:PNR) has been raising its dividends consistently for the past 47 years. The company currently pays a quarterly dividend of $0.22 per share and has a dividend yield of 1.53%, as of April 28.

Pentair plc (NYSE:PNR)’s recent quarterly earnings were lauded by Street analysts. In April, both Stifel and Oppenheimer raised their price targets on the stock to $71 and $72, respectively.

As of the close of Q4 2022, 29 hedge funds tracked by Insider Monkey reported having stakes in Pentair plc (NYSE:PNR), the same as in the previous quarter. The collective value of these stakes is over $1.15 billion. Among these hedge funds, Impax Asset Management was the company’s leading stakeholder in Q4.

3. FedEx Corporation (NYSE:FDX)

Year-to-date Returns as of April 28: 28.2%

 BMO Capital appreciated FedEx Corporation (NYSE:FDX)’s performance and its management in the current inflationary environment. The firm raised its price target on the stock in April to $260 and maintained a Market Perform rating on the shares.

On April 5, FedEx Corporation (NYSE:FDX) declared a 10% hike in its quarterly dividend to $1.26 per share. This marked the company’s third consecutive year of dividend growth, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 2.22%, as of April 28.

At the end of Q4 2022, 48 hedge funds in Insider Monkey’s database reported having stakes in FedEx Corporation (NYSE:FDX), with a total value of over $1.48 billion.

Longleaf Partners mentioned FedEx Corporation (NYSE:FDX) in its Q1 2023 investor letter. Here is what the firm has to say:

“FedEx Corporation (NYSE:FDX) – Global logistics company FedEx was a top contributor in the quarter. FedEx was another 2022 top detractor after a widely publicized earnings shortfall on the back of a disappointing economic report in the second half. In 1Q 2023, the stock rebounded after revenues were weak as forecasted, but FedEx was able to maintain strong pricing power in the face of rising inflation to improve earnings vs. expectations. FedEx’s important Ground business also beat guidance by a large margin due to effective cost control. Even with weak overall revenues, margins increased by 200 basis points. FedEx aggressively bought back discounted shares, indicating management’s confidence. We believe the company’s earnings power is well over $20 longer term vs. current estimates of $15-16 per share, with additional potential upside. After quarter end, FedEx hosted an investor meeting on its DRIVE program which will improve operations and enable the company to achieve double-digit operating income margins in the near future. FedEx will consolidate Express, Ground and Services into one unified operating company.”

2. Apple Inc. (NASDAQ:AAPL)

Year-to-date Returns as of April 28: 34.5%

Apple Inc. (NASDAQ:AAPL) currently pays a quarterly dividend of $0.23 per share and has a dividend yield of 0.55%, as of April 28. It has been raising its dividends consistently for the past nine years.

Apple Inc. (NASDAQ:AAPL) was a part of 135 hedge funds in Q4 2022, as per Insider Monkey’s database. The stakes owned by these funds have a total value of over $136 billion.

Distillate Capital mentioned Apple Inc. (NASDAQ:AAPL) in its Q4 2022 investor letter. Here is what the firm has to say:

“The largest new purchase was Apple Inc. (NASDAQ:AAPL), which after underperforming saw its valuation improve significantly. Over the course of the last year, Apple’s consensus estimated forward free cash flows rose modestly, while its enterprise value fell by around 30%. Apple ranks below the 25th most attractive name in the portfolio and so its weight is capped at 4% vs. 6% for names in the top quartile.”

1. West Pharmaceutical Services, Inc. (NYSE:WST)

Year-to-date Returns as of April 28: 55.2%

West Pharmaceutical Services, Inc. (NYSE:WST) is an American company that deals in the packaging and distribution of pharmaceuticals. The company currently offers a quarterly dividend of $0.19 per share and has a dividend yield of 0.21%, as of April 28. It is one of the best dividend stocks on our list as it has raised its payouts for 30 years straight.

As of the close of Q4 2022, 41 hedge funds tracked by Insider Monkey owned stakes in West Pharmaceutical Services, Inc. (NYSE:WST), up from 39 in the previous quarter. These stakes have a collective value of over $757.8 million.

Conestoga Capital Advisors mentioned West Pharmaceutical Services, Inc. (NYSE:WST) in its Q3 2022 investor letter. Here is what the firm has to say:

“West Pharmaceutical Services, Inc. (NYSE:WST): Similar to its industry peers, WST saw its share price decline despite solid overall results. WST reported 23% organic growth (ex-COVID) in the second quarter as the biologics market continues to perform well. WST did reduce full-year guidance by $100 million to account for greater foreign currency headwinds ($75mm impact) and slowing COVID demand ($85mm impact). This implies a guidance raise of $60 million on the base business, which we view as important to driving long term appreciation. WST also set expectations for COVID revenue to decline by 30-50% in 2023 after declining 20% to $375 million in 2022.”

You can also take a look at 10 Best Dividend ETFs in 2023 and 10 Best Mobile Gaming Stocks to Buy Now

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