5 Best Financial Dividend Stocks to Invest In

In this article, we discuss 5 best financial dividend stocks to invest in. If you want to read our detailed analysis of the finance sector and dividend stocks, go directly to read 12 Best Financial Dividend Stocks to Invest In. 

5. The Allstate Corporation (NYSE:ALL)

Dividend Yield as of November 4: 2.63%

The Allstate Corporation (NYSE:ALL) is an American insurance company that offers a wide range of coverage options for its consumers. The company reported strong cash position in its third-quarter earnings as it paid nearly $897 million to shareholders, $232 million of which represented dividend payments. Its revenue for the quarter came in at $13.2 billion, which showed a 5.8% growth from the same period last year.

The Allstate Corporation (NYSE:ALL) currently pays a quarterly dividend of $0.85 per share and has a dividend yield of 2.63%, as of November 4. The company is one of the best dividend stocks on our list as it has been raising its dividends consistently for the past 14 years.

In November, Citi raised its price target on The Allstate Corporation (NYSE:ALL) to $140 with a Buy rating on the shares after its Q3 earnings. The firm appreciated the company’s margin recovery and its valuation.

At the end of Q2 2022, 37 hedge funds tracked by Insider Monkey reported owning stakes in The Allstate Corporation (NYSE:ALL), compared with 44 in the previous quarter. These stakes hold a consolidated value of over $627.3 million.

4. The Goldman Sachs Group, Inc. (NYSE:GS)

Dividend Yield as of November 4: 2.79%

The Goldman Sachs Group, Inc. (NYSE:GS) is a New York-based investment banking company that also provides other financial services to its consumers. In October, BMO Capital maintained an Outperform rating on the stock with a $469 price target. The firm appreciated the company’s improvement in profitability and its Consumer and Banking businesses.

In the third quarter of 2022, The Goldman Sachs Group, Inc. (NYSE:GS) reported revenue of $11.98 billion, which beat estimates by $450 million. During the quarter, the firm returned over $1.89 billion to shareholders, including $893 million in dividends. It ended the quarter with $284 billion in cash and cash equivalents.

On October 18, The Goldman Sachs Group, Inc. (NYSE:GS) declared a quarterly dividend of $2.50 per share, in line with its previous dividend. The company maintains a 10-year streak of consistent dividend growth, coming through as one of the best dividend stocks to buy from the finance sector. As of November 4, the stock has a dividend yield of 2.79%.

At the end of Q2 2022, 69 hedge funds tracked by Insider Monkey owned stakes in The Goldman Sachs Group, Inc. (NYSE:GS), down from 71 in the previous quarter. These stakes have a collective value of over $4.6 billion. Eagle Capital Management was the company’s leading stakeholder in Q2.

GoodHaven Capital Management mentioned The Goldman Sachs Group, Inc. (NYSE:GS) in its Q2 2022 investor letter. Here is what the firm has to say:

“We also initiated a position in The Goldman Sachs Group, Inc. (NYSE:GS) at an inexpensive valuation and are attracted by the potential durability of the company’s ability to generate high returns on equity driven in part by the growth in their existing and new franchises.”

3. JPMorgan Chase & Co. (NYSE:JPM)

Dividend Yield as of November 4: 3.06%

JPMorgan Chase & Co. (NYSE:JPM) is another best dividend stock to buy from the finance sector. The investment banking company has been raising its payouts for the past seven years. Currently, it pays a quarterly dividend of $1.00 per share and has a dividend yield of 3.06%, as of November 4.

JPMorgan Chase & Co. (NYSE:JPM) generated strong cash flow during Q3 2022. The company returned $3 billion in dividends to shareholders during the quarter. Its cash and due from the banks came in at $24.6 billion and its assets under management amounted to over $2.6 trillion.

Citigroup appreciated the performance of JPMorgan Chase & Co. (NYSE:JPM) this year and called it one of the best names for long-term investors. The firm maintained a Buy rating on the stock in October while raising its price target to $135.

At the end of the June quarter, 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.

2. The Bank of New York Mellon Corporation (NYSE:BK)

Dividend Yield as of November 4: 3.48%

The Bank of New York Mellon Corporation (NYSE:BK) is an American corporate investment banking company. The company is added to our list of the best dividend stocks as it has paid regular dividends to shareholders for the past 21 years. It currently offers $0.37 per share in quarterly dividends for a dividend yield of 3.48%, as of November 4.

In Q3 2022, The Bank of New York Mellon Corporation (NYSE:BK) reported revenue of $4.28 billion, which showed a 6% growth from the same period last year. The bank’s assets under management for the quarter stood at $1.8 trillion. Moreover, it paid $303 million to shareholders in dividends, which shows that its cash flow is stable.

In October, Citigroup upgraded The Bank of New York Mellon Corporation (NYSE:BK) to Buy with a $46 price target, highlighting the company’s strong returns and capital return capacity. The firm also mentioned that the company has an upside to net interest income estimates.

As of the close of Q2 2022, 38 hedge funds in Insider Monkey’s database owned stakes in The Bank of New York Mellon Corporation (NYSE:BK), down from 54 in the previous quarter. These stakes are collectively valued at over $3.6 billion. First Eagle Investment Management was one of the company’s leading stakeholders in Q2.

Ariel Investments mentioned The Bank of New York Mellon Corporation (NYSE:BK) in its Q4 2021 investor letter. Here is what the firm has to say:

“Rising interest rates, after a surprisingly long period of low absolute rates and negative “real” rates, will create a headwind. While there has been much debate about the cause of these low rates, we believe the most important factor has been the $120 billion in monthly federal reserve open market bond purchases and the accumulation of an $8 trillion balance sheet. The former will end, and the latter will shrink. It is not just the Fed that has aggressively purchased bonds, bidding up prices and lowering yields. Bond traders and hedge fund managers have added to positions, confident that being on the same side as the Fed was the wise place to be. Now as the Fed is about to become a seller of bonds rather than a buyer, Wall Street’s “smart money” is likely to follow suit. Against this backdrop, fixed income securities and bond substitutes such as high dividend paying utilities and absolute return hedge funds are substantially overpriced and are not likely to produce attractive returns going forward.

This expectation of a reversion to the mean for interest rates helped 2021 performance, though not as much as we had hoped. The yield on the U.S. 10-year Treasury did indeed increase from +0.92% at the beginning of the year to +1.52% at year-end. An underreported story was the poor performance of bonds last year. The Barclays Aggregate Index declined -1.67% for the year ending December compared to a return of +28.71% for equities as measured by the S&P 500. Interest rates have continued to climb in 2022 with the 10-year Treasury at +1.79% as we go to print. This move higher in rates has contributed to our good, early start to 2022. Smaller positions in The Bank of New York Mellon Corporation (BK) also benefited from higher rates, principally with their ability to invest customer cash.”

1. U.S. Bancorp (NYSE:USB)

Dividend Yield as of November 4: 4.48%

U.S. Bancorp (NYSE:USB) is an American bank holding and financial services company. It reported strong results in its Q3 earnings. The company’s revenue saw a 7.5% year-over-year growth at $6.33 billion. As of September 30, it has over $601 billion in assets.

On September 13, U.S. Bancorp (NYSE:USB) declared a 4% hike in its quarterly dividend to $0.48 per share. Through this increase, the company extended its dividend growth streak to 12 years, which makes it one of the best dividend stocks on our list. As of November 4, the stock has a dividend yield of 4.48%.

In November, JPMorgan raised its price target on U.S. Bancorp (NYSE:USB) to $47 with an Overweight rating on the shares. The firm mentioned that large-cap banks are well-positioned to benefit in revenues from high-interest rates.

As of the close of Q2 2022, the number of hedge funds tracked by Insider Monkey owning stakes in U.S. Bancorp (NYSE:USB) stood at 43, growing from 40 in the previous quarter. The collective value of these stakes is over $6.5 billion. In addition to Warren Buffett, Ken Griffin, Jim Simons, and Donald Yacktman were some other prominent shareholders of the company in Q2.

ClearBridge Investments mentioned U.S. Bancorp (NYSE:USB) in its Q4 2021 investor letter. Here is what the firm has to say:

“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We have increased our exposure to interest-rate sensitive banks by adding to existing positions in U.S. Bancorp.”

You can also take a look at 12 Best Non-REIT Dividend Stocks To Buy and 10 Best Small-Cap Stocks To Buy Now.

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