In this article, we discuss 5 best long-term dividend stocks to buy now. If you want to read our detailed analysis of dividend investing in the current market environment, go directly to read 13 Best Long-Term Dividend Stocks to Buy Now.
5. McDonald’s Corporation (NYSE:MCD)
Dividend Yield as of October 19: 2.44%
McDonald’s Corporation (NYSE:MCD) is another best dividend stock for long-term investment. The multinational fast-food chain raised its quarterly dividend by 10% to $1.52 per share on October 14. This was the company’s 46th consecutive year of dividend growth. Moreover, the company has raised its payouts at a CAGR of 7.98% in the past five years. As of October 19, the stock’s dividend yield came in at 2.44%.
In September, Stephens initiated its coverage on the stock with an Overweight rating and a $280 price target. The firm appreciated the company’s attractive value offerings on its menu, which would enhance its same-store sales in the upcoming quarters.
At the end of Q2 2022, 50 hedge funds tracked by Insider Monkey owned stakes in McDonald’s Corporation (NYSE:MCD), compared with 58 in the previous quarter. The consolidated value of these stakes is over $2.3 billion. Bridgewater Associates owned the largest position in the company in Q2.
4. PepsiCo, Inc. (NASDAQ:PEP)
Dividend Yield as of October 19: 2.63%
PepsiCo, Inc. (NASDAQ:PEP) is a New York-based multinational food, snack, and beverage company. In October, Barclays lifted its price target on the stock to $185 with an Overweight rating on the shares. The firm appreciated the company’s flexibility in the current economic environment.
PepsiCo, Inc. (NASDAQ:PEP) reported strong earnings in its recently-published earnings report. In the first nine months of the year, the company posted an operating cash flow of $6.3 billion. The company had over $6.4 billion in cash and cash equivalents, compared with $5.6 billion nine months ago. Due to its strong cash flow, the company expects to return nearly $7.7 to shareholders, comprised of $6.2 billion in dividend payments.
On July 21, PepsiCo, Inc. (NASDAQ:PEP) declared a quarterly dividend of $1.15 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past 50 years, which makes it one of the best dividend stocks on our list. As of October 19, the stock has a dividend yield of 2.63%.
The number of hedge funds tracked by Insider Monkey owning stakes in PepsiCo, Inc. (NASDAQ:PEP) stood at 65 in Q2 2022, growing from 62 in the previous quarter. The collective value of these stakes is over $5.28 billion.
3. The Home Depot, Inc. (NYSE:HD)
Dividend Yield as of October 19: 2.67%
The Home Depot, Inc. (NYSE:HD) is an American home improvement company. Its strong cash position makes it one of the best dividend stocks for long-term investors. The company generated sufficient cash during the second quarter of 2022 to support its dividend payments worth $4 billion.
The Home Depot, Inc. (NYSE:HD) has been growing its dividends consistently for the past 12 years and has a five-year dividend CAGR of 16.4%. It currently offers $1.90 per share in quarterly dividends with a dividend yield of 2.67%, as of October 19.
In October, Jefferies lifted its price target on The Home Depot, Inc. (NYSE:HD) to $394 with a Buy rating on the shares. The firm highlighted the company’s outsized exposure to repair and replacement.
As per Insider Monkey’s database, 80 hedge funds tracked by Insider Monkey owned stakes in The Home Depot, Inc. (NYSE:HD), growing from 75 in the previous quarter. These stakes hold a collective value of over $5.3 billion, compared with $5.6 billion worth of stakes owned by hedge funds in the preceding quarter.
Diamond Hill Capital mentioned The Home Depot, Inc. (NYSE:HD) in its Q2 2022 investor letter. Here is what the firm had to say:
“The Home Depot, Inc. (NYSE:HD) is a high-quality operator in the home improvement industry. Macroeconomic concerns, particularly the rise in mortgage rates, caused the share price to pull back and trade at a greater discount to our estimate of intrinsic value. We believe Home Depot is well positioned to continue gaining share due to its premium real estate locations, strong operations and recent investments in its supply chain. We like Home Depot’s exposure to the professional customer and believe in its ability to take market share in this segment as we believe home improvement spending has the potential to remain resilient in upcoming years.”
2. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of October 19: 2.92%
Merck & Co., Inc. (NYSE:MRK) is an American multinational pharmaceutical company that specializes in innovative health solutions for its patients globally. Since the beginning of the year, the stock delivered a 21.3% return to shareholders while its 12-month return stood at 17.3%, as of October 18.
Merck & Co., Inc. (NYSE:MRK) qualifies as one of the best dividend stocks because it has been raising its dividends consistently for the past 11 years. It pays a quarterly dividend of $0.69 per share and has a dividend yield of 2.92%, as of October 19.
In October, Barclays raised its price target on Merck & Co., Inc. (NYSE:MRK) to $105 with an Overweight rating on the shares, expecting the company to generate positive results in Q3.
At the end of the June quarter, 79 hedge funds in Insider Monkey’s database owned stakes in Merck & Co., Inc. (NYSE:MRK), valued at over $6.1 billion. Fisher Asset Management was the company’s leading stakeholder in Q2.
Chartwell Investment Partners mentioned Merck & Co., Inc. (NYSE:MRK) in its Q2 2022 investor letter. Here is what the firm has to say:
“In the Dividend Equity accounts, the three best performers in Q2 includes Merck (NYSE:MRK, 3.6%), up 12.0%. Merck, like other pharma companies, is in a defensive business, but the stock also did well as peak-sales estimates for their flagship drug, Keytruda, have gone up (JPMorgan estimates $32 billion in sales by 2026).”
1. Devon Energy Corporation (NYSE:DVN)
Dividend Yield as of October 19: 6.68%
Devon Energy Corporation (NYSE:DVN) specializes in the exploration of hydrocarbons and is headquartered in Oklahoma. In October, Piper Sandler raised its price target on the stock to $96 with an Overweight rating on the shares. The firm mentioned that Exploration and Production stocks are back on solid footing heading into the third quarter of the year.
On August 1, Devon Energy Corporation (NYSE:DVN) declared a 22% hike in its quarterly dividend to $1.55 per share. This was the company’s sixth consecutive year of dividend growth. Moreover, it has paid dividends to shareholders for 29 years in a row. As of October 19, the stock has a dividend yield of 6.68%.
As of the close of Q2 2022, 57 hedge funds tracked by Insider Monkey owned stakes in Devon Energy Corporation (NYSE:DVN), compared with 66 in the previous quarter. These stakes are collectively valued at $1.48 billion. With roughly 15 million DVN shares, GQG Partners was the company’s leading stakeholder in Q2.
GoodHaven Capital Management mentioned Devon Energy Corporation (NYSE:DVN) in its Q2 2022 investor letter. Here is what the firm has to say:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
You can also take a look at 11 Best High-Dividend Stocks Under $100 and 11 Best Dividend Stocks to Buy According to Warren Buffett
