In this article, we discuss 5 best Dow Jones dividend stocks that hedge funds love. If you want to read our detailed discussion on the Dow and dividend stocks, go directly to read 10 Best Dow Jones Dividend Stocks that Hedge Funds Love.
5. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 91
UnitedHealth Group Incorporated (NYSE:UNH) is an American multinational healthcare and insurance company that offers related products and services to its consumers. The company reported strong results in Q3 2022. It posted an operating cash flow of $18.5 billion and its adjusted cash flow from operations came in at $8.8 billion. Year-to-date, it returned over $10.5 billion to shareholders through dividends and share repurchases.
UnitedHealth Group Incorporated (NYSE:UNH) has a long history of paying dividends. The company started paying annual dividends to shareholders in 1990 and has paid uninterrupted quarterly dividends since 2010. On September 20, it announced a one-time special dividend of $2.00 per share. The company’s quarterly dividend currently stands at $1.65 per share, with a dividend yield of 1.22%, as of October 26. Its special dividends and consistent shareholder return make it one of the best dividend stocks to buy.
In October, Deutsche Bank raised its price target on UnitedHealth Group Incorporated (NYSE:UNH) to $615 with a Buy rating on the shares, after the company posted solid Q3 results. The firm highlighted the company’s membership growth and value-based arrangements.
At the end of Q2 2022, 91 hedge funds in Insider Monkey’s database owned stakes in UnitedHealth Group Incorporated (NYSE:UNH) in Q2, with a total value of roughly $11 billion. GQG Partners owned $1.6 billion worth of stakes in the company, becoming its leading stakeholder in Q2 2022.
Carillon Tower Advisers mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2022 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated (NYSE:UNH) reported solid quarterly results and raised 2022 guidance modestly. Additionally, managed care is another industry that is viewed as defensive in the current environment, which helped support UnitedHealth and its peer group.”
4. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. (NYSE:JPM) is a multinational investment banking company that offers financial services to its consumers. Citigroup mentioned the stock in its October investors’ note and said that JPM offers an ‘excellent entry point’ for long-term investors. The firm raised its price target on the stock to $135 with a Buy rating on the shares.
In its recently-announced Q3 earnings, JPMorgan Chase & Co. (NYSE:JPM) posted revenue of $32.7 billion, which showed a 10.4% growth from the same period last year. The company also reported a 9% growth in its average deposits. During the quarter, it returned $3 billion to shareholders through dividends, which shows that the company’s free cash flow is stable.
JPMorgan Chase & Co. (NYSE:JPM) is one of the best dividend stocks on our list as it maintains a seven-year streak of dividend growth. The company pays a quarterly dividend of $1.00 per share for a dividend yield of 3.26%, as of October 26.
At the end of Q2 2022, 104 hedge funds tracked by Insider Monkey owned stakes in JPMorgan Chase & Co. (NYSE:JPM), falling from 110 in the previous quarter. These stakes hold a combined value of over $5.8 billion, compared with $5 billion worth of stakes owned by hedge funds in the previous quarter.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL), one of the largest tech companies in the world, reported a strong financial position in Q3 2022. The company’s operating cash flow came in at $23 billion while it generated $20.7 billion in free cash flow. It returned nearly $20 billion to shareholders in dividends, which shows the company’s sufficient FCF.
Recently, Apple Inc. (NASDAQ:AAPL) announced a collaboration with Microsoft, through which some of the company’s major services will be available for Windows. These services include Apple Music, Apple TV, and iCloud photos.
Apple Inc. (NASDAQ:AAPL) has been raising its dividends consistently for the past nine years. The company pays a quarterly dividend of $0.23 per share and as of October 26, has a dividend yield of 0.60%.
Evercore ISI estimated that Apple Inc. (NASDAQ:AAPL) could generate nearly $2 billion in services revenue due to the growth in its subscribers worldwide. In view of this, the firm raised its price target on the stock to $190 in October with an Outperform rating on the shares.
Of the 895 elite funds tracked by Insider Monkey in Q2 2022, Apple Inc. (NASDAQ:AAPL) was a part of 128 hedge fund portfolios, compared with 131 in the previous quarter. The stakes owned by these hedge funds have a total value of over $143 billion. Berkshire Hathaway was the largest stakeholder of Apple Inc. (NASDAQ:AAPL) in Q2 2022.
Wedgewood Partners mentioned Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter. Here is what the firm has to say:
“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”
2. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 166
Visa Inc. (NYSE:V) is a California-based financial services company that facilitates electronic funds transfers throughout the world. On October 25, the company announced a 20% hike in its quarterly dividend to $0.45 per share. This was the company’s 14th consecutive year of dividend growth. As of October 26, the stock has a dividend yield of 0.77%.
In October, Jefferies maintained a Buy rating on Visa Inc. (NYSE:V) with a $220 price target, appreciating the company’s solid consumer payment volumes both in the US and across the globe.
Visa Inc. (NYSE:V) was a popular stock among elite funds in Q2 2022, as 166 hedge funds in Insider Monkey’s database owned stakes in the company, up from 159 in the previous quarter. These stakes hold a collective value of over $24 billion.
Wedgewood Partners mentioned Visa Inc. (NYSE:V) in its Q3 2022 investor letter. Here is what the firm has to say:
“Visa Inc. (NYSE:V) continues to report strong double-digit growth in payment volumes throughout the first two months of the calendar third quarter. The stock suffered after concerns about potential adverse legislation related to its credit card routing practices began to surface. Similar legislation related to the Company’s debit routing practices was passed into law back in 2010. Not unlike the previous legislation, the Company’s value proposition to merchants, consumers and bank-issuing customers and acquirers is robust enough to help blunt the potential effects the legislation might have in the near term. Over a multiyear time horizon, it would be quite difficult for any currently non-existent or even sub-scale credit routing network to add the value that Visa (or MasterCard) can already add today.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) recently reported its fiscal Q1 2023 earnings. The company’s operating cash flow came in at over $23 billion, compared with $24.5 billion during the same period last year. Its shareholder return remained strong as it distributed $9.7 billion to shareholders in dividends and share repurchases.
On September 20, Microsoft Corporation (NASDAQ:MSFT) raised its quarterly dividend by 10% to $0.68 per share. This was the company’s 16th straight year of dividend growth. As of October 26, the stock has a dividend yield of 1.06%.
At the end of Q2 2022, Microsoft Corporation (NASDAQ:MSFT) was the most popular stock among hedge funds, with 258 funds taking up investments in the company, according to Insider Monkey’s data. The stakes owned by these hedge funds hold a collective value of over $56 billion.
Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q2 2022 investor letter. Here is what the firm has to say:
“Shares of Microsoft Corporation, a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues.
As discussed above, we continue to believe Microsoft remains a durable and growing business as companies across all industries look to digitally transform, taking advantage of the continuously expanding solution set Microsoft has to offer.”
You can also take a look at 10 Best Undervalued Dividend Stocks to Buy Now and 10 Best European Dividend Stocks to Buy Now
