This article presents an overview of the 5 Best Long-Term Dividend Stocks To Buy Now. For a detailed overview of such stocks, read our article 13 Best Long-Term Dividend Stocks To Buy Now.
5. UnitedHealth Group Inc (NYSE:UNH)
Number of Hedge Fund Investors: 104
Healthcare insurance and services giant UnitedHealth Group Inc (NYSE:UNH) has a strong balance sheet and a diversified business along with 14 years of consistent dividend growth history. Over the past five years UnitedHealth Group Inc’s (NYSE:UNH) dividend growth rate came in at 16.14%.
As of the end of the third quarter of 2023, 104 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in UnitedHealth Group Inc (NYSE:UNH). The most significant stakeholder of UnitedHealth Group Inc (NYSE:UNH) was Rajiv Jain‘s GQG Partners which owns a $1.6 billion stake in UnitedHealth Group Inc (NYSE:UNH).
Wedgewood Partners stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its fourth quarter 2023 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) contributed less to portfolio performance than the majority of our holdings during the quarter. The Company reported double-digit revenue, operating earnings and earnings per share growth during their third quarter. The Company has been able to adjust pricing in its health care segment to keep up with medical cost inflation while working with its Optum units to deliver more value-based care that replaces the traditional fee for service health care model. Value-based care is a sensible, long-term growth opportunity for the Company to pursue and also differentiates it from the vast majority of healthcare providers, particularly as it relates to Medicare patients. For example, the Company’s value-based care programs provide more preventative care opportunities and home-based care visits for patients which helps save the U.S. healthcare system billions in unnecessary spending while also providing patients with better outcomes, as diseases and behaviors are caught or corrected at earlier stages. The Company has invested in several core assets over many years to execute this value-based strategy and it will become the standard of care as the proportion of people in the U.S. with healthcare insurance coverage continues to reach new highs.”
4. JPMorgan Chase & Co (NYSE:JPM)
Number of Hedge Fund Investors: 109
JPMorgan Chase & Co (NYSE:JPM) has been increasing its dividends since 2009. JPMorgan Chase & Co (NYSE:JPM) is one of the most popular dividend stocks among notable income investors, analysts and mainstream financial media, thanks to its size, fortress balance sheet and fundamental strengths.
In its fourth quarter 2023 investor letter, Vltava Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM):
“Last spring, the US went through a brief banking crisis that cost several smaller and medium-sized banks their lives. One of them, First Republic Bank, with assets of $230 billion, went into receivership and was bought out by the largest US bank, JPMorgan Chase & Co. (NYSE:JPM). The acquisition terms were very favourable for JPM and the facts that few, if any, other banks could have taken over the whole of First Republic Bank in its then-present state while guaranteeing more than $100 billion of its deposits played a role. JPM could do it. It is not only the largest, but also by its balance sheet the strongest US bank and, in our opinion, clearly the best managed. It has come out of this crisis even stronger. We have actively followed the banking sector for 20 years in many countries around the world. Our view is that a well-managed bank can be a very good long-term investment but that it is better to focus on the best and highest quality available. Banking is not a sector where it pays to trade quality for cheaper valuations. That is why we hold JPM.”
3. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 134
With about a decade of dividend increase and stock price growth potential, Apple Inc (NASDAQ:AAPL) remains one of the best long-term dividend stocks to buy and hold according to top investors including Warren Buffett, who owns a $158 billion stake in Apple Inc (NASDAQ:AAPL) as of the end of the third quarter of 2023.
In May last year, Apple Inc (NASDAQ:AAPL) increased its dividend by 4%.
Polen Focus Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2023 investor letter:
“Apple Inc. (NASDAQ:AAPL) and NVIDIA alone drove over 1,100 basis points of the Russell 1000 Growth Index’s 42% return, so not owning them was a meaningful headwind to our relative return in 2023. While on a total attribution basis, Apple was not a top three detractor to our full-year return, given its extremely large weighting in the Index, we feel it’s worth sharing our thoughts.
The company’s share price appreciated nearly 50% in a year when its revenue declined and earnings per share was relatively flat with the previous year.
For 2024, consensus expectations are for low-single-digit revenue growth and only slightly faster EPS growth. These pedestrian growth rates are not surprising for a company with nearly $400 billion in annual revenue. What is more surprising is that Apple shares trade at nearly 30x forward earnings, a large premium to the market and many faster-growing, competitively advantaged businesses.
While we continue to think Apple is a wonderful business, it is also a slow growing one with risks that we do not see as insignificant. Apple’s entire supply chain is based in China and much of its incremental revenue growth also comes from China, so if there is a U.S.-China issue that makes it more difficult for U.S.-based companies that have access to large amounts of local data to operate in China, Apple’s business would likely face more challenges than many others. In addition, much of Apple’s services growth and margin expansion has come from direct payments from Google to be the default search provider on iOS devices. This practice is currently the subject of a lawsuit between Google and the U.S. Justice Department. If this practice is deemed unlawful, it could take away a large and highly profitable revenue stream from Apple’s already slow growth engine. While we closely cover Apple, we continue to believe we have better investment opportunities. Apple’s current P/E is above our Portfolio’s weighted average, yet its long-term earnings growth rate is likely to be lower than even our slowest growing holding, according to our research.”
2. Visa Inc (NYSE:V)
Number of Hedge Fund Investors: 167
Strong dividend growth history and share price growth upside potential makes Visa Inc (NYSE:V) one of the best long-term dividend stocks to buy and hold.
Earlier this month, Visa Inc (NYSE:V) posted fiscal first quarter results, according to which its adjusted EPS came in at $2.41, beating estimates by $0.07. Revenue in the quarter jumped 8.9% year over year to $8.6 billion, surpassing estimates by $50 million.
Visa Inc (NYSE:V) in its latest earnings call talked about dividends, buybacks and future expectations:
“In Q1, we bought back approximately $3.4 billion in stock and distributed over $1 billion in dividends to our stockholders. At the end of December, we had $26.4 billion remaining in our buyback authorization. Now let’s move to what we’ve seen so far in January through to the 21st. U.S. payment volume was up 4% with debit up 3% and credit up 4% year-over-year, down from December, largely due to severe weather conditions in parts of the U.S. Process transactions grew 8% year-over-year. Constant dollar cross-border volume, excluding transactions within Europe, grew 16% year-over-year. Travel-related cross-border volume, excluding intra-Europe, grew 16% year-over-year or 146% indexed to 2019; and cross-border card-not-present ex travel grew 16%.
Now on to our expectations. Remember that adjusted basis is defined as non-GAAP results in constant dollar and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more detail. For the full year, we have no material changes to our prior outlook for drivers, adjusted net revenues or EPS growth. Remember that our drivers assume no recession or a further increase in Reg II impacts. Pismo is expected to have minimal benefit to full year net revenue growth and an approximately 0.5 point headwind to non-GAAP operating expense and EPS growth. FX is expected to have an approximately 0.5 point drag to net revenues growth and approximately 1 point benefit to non-GAAP operating expense growth and a minimal drag to non-GAAP EPS growth.
Non-GAAP non-operating income is expected to be between $350 million and $400 million, with nearly half in Q2 due to the resolution of some non-U.S. tax matters.”
Read the full earnings call transcript here.
In its October 2023 investor letter, Lakehouse Capital stated the following regarding Visa Inc. (NYSE:V):
“Visa Inc. (NYSE:V) reported a strong result with net revenue increasing 11% year-on-year to $8.6 billion and non-GAAP earnings per share increasing by 21% to $2.33. As has been the case for many years now, the scalable nature of the business allows for revenue growth to outpace its costs, which places the company in a good position to navigate through this inflationary period. The network continues to grow, with credentials and merchant locations up 7% and 17%, respectively. Cross-border travel-related spend also maintained its robust growth, increasing 26% year-on-year while Visa Direct reported 7.5 billion transactions, up 19% yearon-year, progressing on penetrating categories such as cross-border remittances. Altogether, we’re pleased with how the business is tracking and remain positive on Visa’s outlook.”
1. Microsoft Corp (NASDAQ:MSFT)
Number of Hedge Fund Investors: 306
Microsoft Corp (NASDAQ:MSFT) has a low dividend yield but years of dividend growth and a huge share price upside potential makes it a dividend stock to buy and hold forever, according to the analyst reports and mainstream financial websites we consulted.
Hedge funds agree. Microsoft Corp (NASDAQ:MSFT) was the most popular stock among the 910 hedge funds tracked by Insider Monkey as of the end of the third quarter of 2023.
Polen Focus Growth Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its fourth quarter 2023 investor letter:
“The largest relative detractors in the quarter were Illumina, Airbnb, and Microsoft Corporation (NASDAQ:MSFT). Microsoft’s business continues to grow well, albeit at slower rates than in the previous few years. That said, it was a relative detractor to the Portfolio because our 7% average weighting for both the quarter and the year were significantly lower than the 12% benchmark weighting in the Russell 1000 Growth. Microsoft shares appreciated a benchmark-beating 19% in 4Q and 58% in 2023.
In addition, we also expect generative AI to help not just Microsoft’s Azure cloud service business grow, but also to be an additional growth driver for the company’s Productivity Suite (Word, Excel, PowerPoint, etc.) and Power Platform, which helps build internal apps for businesses.
Microsoft has created generative AI co-pilots, which are bots that use large language models (LLMs) to make a customer’s Microsoft software even more functional. As an example, co-pilot offerings from Microsoft can take text and data from Word and Excel and automatically create a PowerPoint presentation from it. We expect to see generative AI demand from Azure customers becoming a larger contributor to growth of that segment while Microsoft Co-pilot becomes a premium feature of the high-end Microsoft commercial bundles, leading to better pricing. Given the strength of the company’s existing businesses and the expected strong product cycle driven by generative AI advancements, we chose to add to our Microsoft position. It is now our second largest position behind Amazon.”
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