5 Best Dividend Stocks Paying Over 6%

In this article, we discuss 5 best dividend stocks paying over 6%. If you want to see more stocks in this selection, check out 11 Best Dividend Stocks Paying Over 6%. 

5. Energy Transfer LP (NYSE:ET)

Number of Hedge Fund Holders: 33

Dividend Yield as of December 27: 8.86%

Energy Transfer LP (NYSE:ET) is a Texas-based company that owns and operates natural gas transportation pipelines and natural gas storage facilities. On October 25,Energy Transfer LP (NYSE:ET) declared a $0.265 per share quarterly dividend, a 15.2% increase from its prior dividend of $0.230. The dividend was paid to shareholders on November 21. This distribution increase reflects another step in Energy Transfer LP (NYSE:ET)’s plan to return higher value to shareholders while maintaining its target leverage ratio of 4.0x-4.5x debt-to-EBITDA. 

On December 8, Citi analyst Spiro Dounis initiated coverage of Energy Transfer LP (NYSE:ET) with a Buy rating and a $16 price target. The sector offers a “compelling combination of growth and yield,” the analyst wrote in a research note.

According to the third quarter database of Insider Monkey, Energy Transfer LP (NYSE:ET) was part of 33 hedge fund portfolios, compared to 36 in the prior quarter. David Abrams’ Abrams Capital Management is the biggest stakeholder of the company, with 22 million shares worth $242.8 million. 

Miller Value Partners, an investment firm, talked about Energy Transfer L.P. (NYSE:ET) in its Q2 2021 investor letter. Here is what the fund said:

“Energy Transfer LP (ET) rose over the period along with the price of oil climbing 40.59% over the period. The company received positive news that the Dakota Access Pipeline project would not be shut down while the Environmental Impact Statement by the US Army Corps of Engineers is drawn up. Energy Transfer reported strong 1Q results with revenue of $17B surpassing expectations for $11.8B with adjusted earnings before income, taxes, depreciation and amortization (EBITDA) hitting $5.04B ahead of consensus of $2.77B. The company raised full year adjusted EBITDA guidance to $12.9-13.3B from $10.6-11.0B previously, with the increase largely related to the benefits realized from Winter Storm Uri. The company paid down $3.7B in debt during the quarter, using strong cash flow to reduce leverage. The company also announced the issuance of $900M in 6.5% Series H perpetual preferreds with the company using the proceeds to repay debt and for general purposes.”

4. Pioneer Natural Resources Company (NYSE:PXD)

Number of Hedge Fund Holders: 49

Dividend Yield as of December 27: 11.37%

Pioneer Natural Resources Company (NYSE:PXD) is a Texas-based independent oil and gas exploration and production company. The company explores for, develops, and produces oil, natural gas liquids, and gas. Pioneer Natural Resources Company (NYSE:PXD) paid a $5.71 per share quarterly dividend to unitholders on December 15. It is one of the best dividend stocks to consider. 

On October 28, Pioneer Natural Resources Company (NYSE:PXD) announced that it is looking to increase productivity levels in 2023 by reshuffling its drilling portfolio to target wells with possibly greater returns. 

Barclays analyst Jeanine Wai on December 7 maintained an Overweight rating on Pioneer Natural Resources Company (NYSE:PXD) but lowered the firm’s price target on the shares to $277 from $300 following the Q3 results.

According to Insider Monkey’s data, 49 hedge funds were bullish on Pioneer Natural Resources Company (NYSE:PXD) at the end of the third quarter of 2022, compared to 56 funds in the prior quarter. Donald Yacktman’s Yacktman Asset Management is a prominent stakeholder of the company, with 686,869 shares worth $148.7 million. 

Here is what Carillon Scout Mid Cap Fund has to say about Pioneer Natural Resources Company (NYSE:PXD) in its Q1 2022 investor letter:

“Pioneer Natural Resources (NYSE:PXD) performed well in a strong energy sector. Pioneer stood out recently with a pledge to return a large majority of free cash flow to shareowners through dividends and stock buybacks, and ended hedging to give shareowners more earnings and dividend potential should oil and gas prices continue to rise.”

3. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 61

Dividend Yield as of December 27: 6.06%

AT&T Inc. (NYSE:T) is an American multinational telecommunications company that provides satellite television, fixed-line telephones, mobile telephones, and internet services. On December 27, AT&T Inc. (NYSE:T) announced that it will create a joint venture with BlackRock Alternatives called Gigapower, which will reach an initial 1.5 million customer locations across the United States. The joint venture would be in addition to its present goal of achieving more than 30 million fiber locations by the end of 2025.  

On December 15, AT&T Inc. (NYSE:T) declared a $0.2775 per share quarterly dividend, in line with previous. The dividend is payable on February 1, 2023 to shareholders of record on January 10. The dividend yield on December 27 came in at 6.06%. AT&T Inc. (NYSE:T) is one of the best dividend stocks to invest in. 

Raymond James analyst Frank Louthan on December 27 maintained a Strong Buy rating on AT&T Inc. (NYSE:T) after the company announced a joint venture with BlackRock to develop fiber-to-the-home outside its 21-state footprint.

According to Insider Monkey’s data, 61 hedge funds were bullish on AT&T Inc. (NYSE:T) at the end of the third quarter of 2022, compared to 55 funds in the prior quarter. D E Shaw held the largest stake in the company, comprising nearly 14 million shares worth $214.3 million. 

In its Q2 2022 investor letter, Chartwell Investment Partners, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:

“In the Dividend Equity accounts, the three best performers in Q2 include AT&T (NYSE:T, 2.5%), up 17.1%. AT&T completed the spin off of the WarnerMedia business (HBO, CNN, etc.), and the market seemed to like the “back-to-basics” approach. Also, the telco business is expected to do relatively well in an inflationary environment.”

2. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 62

Dividend Yield as of December 27: 6.80%

Verizon Communications Inc. (NYSE:VZ) is a New York-based company that provides communications, technology, information, and entertainment products and services to consumers, businesses, and governments worldwide. On December 1, Verizon Communications Inc. (NYSE:VZ) declared a $0.6525 per share quarterly dividend, in line with previous. The dividend is distributable on February 1, 2023 to shareholders of record on January 10. Verizon Communications Inc. (NYSE:VZ) is one of the top dividend stocks to invest in. 

On December 16, Tigress Financial analyst Ivan Feinseth maintained a Buy rating on Verizon Communications Inc. (NYSE:VZ) but lowered the firm’s price target on the shares to $64 from $68. Verizon Communications Inc. (NYSE:VZ)’s investments in developing its 5G network will start to pay off moving forward, driving improved operational and financial performance, the analyst told investors in a research note. 

According to Insider Monkey’s data, 62 hedge funds were bullish on Verizon Communications Inc. (NYSE:VZ) at the end of Q3 2022, compared to 58 funds in the earlier quarter. Ken Griffin’s Citadel Investment Group is a significant position holder in the company, with 5.2 million shares worth $200.4 million. 

In its Q3 2022 investor letter, Mawer Investment Management, an asset management firm, highlighted a few stocks and Verizon Communications Inc. (NYSE:VZ) was one of them. Here is what the fund said:

“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged behind the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) have been impacted as the wireless operator is spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”

1. Chesapeake Energy Corporation (NASDAQ:CHK)

Number of Hedge Fund Holders: 70

Dividend Yield as of December 27: 10.30%

Chesapeake Energy Corporation (NASDAQ:CHK) is an independent exploration and production company, focused on the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids in the United States. On November 11, Chesapeake Energy Corporation (NASDAQ:CHK) declared a $3.16 per share quarterly dividend, a 36.2% increase from its prior dividend of $2.32. The dividend was distributed to unitholders on December 1. It is one of the best dividend stocks to monitor. 

On October 19, Jefferies analyst Lloyd Byrne initiated coverage of Chesapeake Energy Corporation (NASDAQ:CHK) with a Buy rating and a $150 price target. He believes the “Option Value” of energy is up again, supported by a tight capital cycle. 

According to Insider Monkey’s data, 70 hedge funds were long Chesapeake Energy Corporation (NASDAQ:CHK) at the end of Q3 2022, compared to 67 funds in the last quarter. Howard Marks’ Oaktree Capital Management is the largest stakeholder of the company, with 9.80 million shares worth $923.25 million. 

Miller Value Partners made the following comment about Chesapeake Energy Corporation (NASDAQ:CHK) in its Q3 2022 investor letter:

“Chesapeake Energy Corporation (NASDAQ:CHK) gained 19.1% in the period. The company reported 2Q22 Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, and Exploration Expense (EBITDAX) of $1,269MM, +195.8% Y/Y, ahead of consensus of $1,226MM, and Adjusted Earnings per Share (EPS) of $4.87, compared to 2Q21 EPS of $1.64, ahead of analyst expectations for EPS of $3.82. Chesapeake generated adjusted free cash flow (FCF) of $494MM, bringing TTM FCF to $1,663MM, or a FCF yield of 14.4%. Management also raised the company’s base dividend by 10% to $2.20/share, bringing the total quarterly dividend to $2.32/share, or an annualized yield of ~9.7%. Additionally, the company doubled its existing share repurchase authorization from $1B to $2B and has executed $670MM in repurchases so far through 7/31/22. Collectively, management is guiding for $1.2B in total FY22 dividends, at the midpoint, and $1B in share buybacks, implying total FY22 shareholder returns of $2.2B, or ~19.1% of the company’s market cap.”

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