5 Best Widow and Orphan Stocks To Buy

In this article, we discuss 5 best window and orphan stocks to buy. If you want to see more stocks in this selection, check out 10 Best Widow and Orphan Stocks To Buy. 

5. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 68

Dividend Yield as of December 21: 1.54%

Walmart Inc. (NYSE:WMT) is an American retailer that operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, discount stores, membership-only warehouse clubs, and ecommerce websites. Walmart Inc. (NYSE:WMT) is set to pay a $0.56 per share quarterly dividend on January 3, 2023 to shareholders of record on December 9. Walmart Inc. (NYSE:WMT) is on its way to becoming a dividend king, with 49 consecutive years of dividend increases under its belt. 

On December 19, Credit Suisse analyst Karen Short initiated coverage of Walmart Inc. (NYSE:WMT) with an Outperform rating and a price target of $170, up from $160. Walmart Inc. (NYSE:WMT) has been gaining “meaningful” market share since early 2021 and she views it as “a well-positioned defensive name in an uncertain macro backdrop.” 

According to Insider Monkey’s data, 68 hedge funds were long Walmart Inc. (NYSE:WMT) at the end of September 2022, compared to 67 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 8.12 million shares worth $1.05 billion. 

In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Walmart Inc. (NYSE:WMT) was one of them. Here is what the fund said:

“The pandemic has created challenges for businesses large and small; one major challenge for large essential retailers such as ClearBridge holdings Home Depot, Walmart Inc. (NYSE:WMT) and Costco have been ensuring adequate staffing to meet demand under trying conditions. All three instituted enhanced pay practices during the pandemic, with raises, unplanned bonuses and other benefits helping compensate employees for their efforts in a difficult environment. In September 2020 Walmart raised wages for 165,000 employees, including a number of entry positions to $15 an hour. It followed this in February with a raise for 425,000 workers that moved its average pay above $15 an hour.”

4. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 69

Dividend Yield as of December 21: 2.40%

The Procter & Gamble Company (NYSE:PG) is an American multinational company that provides branded consumer packaged goods worldwide. It operates through five segments – Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. The Procter & Gamble Company (NYSE:PG) is a reliable dividend king, as the company has raised its dividend payouts consistently for the last 66 years. The company’s latest quarterly dividend of $0.9133 per share was distributed on November 15. It is one of the premier widow and orphan stocks to invest in. 

On December 6, investment advisory Deutsche Bank raised the firm’s price target on The Procter & Gamble Company (NYSE:PG) to $162 from $156 and reiterated a Buy rating on the shares. Analyst Steve Powers issued the ratings update. 

According to Insider Monkey’s data, 69 hedge funds were bullish on The Procter & Gamble Company (NYSE:PG) at the end of September 2022, compared to 71 funds in the prior quarter. Ray Dalio’s Bridgewater Associates is the biggest position holder in the company, with 6.6 million shares worth $835.20 million. 

3. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 72

Dividend Yield as of December 21: 2.51%

PepsiCo, Inc. (NASDAQ:PEP) is one of the best widow and orphan stocks to monitor. PepsiCo, Inc. (NASDAQ:PEP) has paid consecutive quarterly cash dividends since 1965, and 2022 marks the company’s 50th consecutive annual dividend increase. On November 17, the company declared a $1.15 per share quarterly dividend, in line with previous. The dividend is payable on January 6, 2023 to shareholders of record on December 2. 

On December 7, Argus analyst John Staszak raised the price target on PepsiCo, Inc. (NASDAQ:PEP) to $206 from $195 and maintained a Buy rating on the shares. The company is well-managed, offers a valuable brand portfolio, and continues to offer strong growth amid soft demand for many consumer staples, the analyst told investors. The analyst added that he expects cost cutting to continue to benefit earnings and expects PepsiCo, Inc. (NASDAQ:PEP) to achieve its goal of $1 billion in annual cost savings.

According to Insider Monkey’s data, 72 hedge funds were bullish on PepsiCo, Inc. (NASDAQ:PEP) at the end of the third quarter of 2022, compared to 65 funds in the earlier quarter. Terry Smith’s Fundsmith LLP is the largest stakeholder of the company, with 7.14 million shares worth $1.16 billion. 

Here is what Lindsell Train has to say about PepsiCo, Inc. (NYSE:PEP) in its Q3 2022 investor letter:

“At this point, it may help to give a further example of these self-reinforcing moats to illustrate the idea, drawing from the consumer franchises side of our portfolio. In our view, strong consumer brands can similarly exhibit Lindy compatible anti-ageing properties. Consider that the longer a company invests in its brands through advertising and R&D, the stronger and more resonant they may get. When successful, a self-sustaining feedback loop is established, whereby it becomes ever harder to recreate a heritage-rich brand from scratch, raising barriers to entry, and proportionately increasing its likely lifespan. There are plenty of long-lived portfolio franchises I could reference here, but I’ve gone with PepsiCo (NYSE:PEP); partly because we have good time-series stats on it (beware data bias!) but also, as I hope will become evident, because Pepsi over its 129 years has succeeded in creating some wonderfully deep moats.

With Pepsi Cola you get the flagship soft drinks brand, which is both global and generational, but you also get the Frito-Lay salty snacks portfolio assembled alongside it, claiming nearly 40% of the global market. That’s ten-times greater than the nearest competitor and likely higher than the next 65 competitors combined. These are exceptionally strong global bands with market shares to match; the long-term empirical result being Pepsi’s dividend record which over the past 66 years (as far back as we’ve been able to go) has compounded at an annualized rate of 10%. Pepsi is no ‘in at the ground floor’ start-up today, but it wasn’t six decades ago either. Early growth investor Philip Fisher put it well when in 1958 (two years into Pepsi’s current winning streak) he wrote of “companies which in spite of outstanding prospects of major further growth are so financially strong, with roots going so deep into the economic soil, that they qualify under the general classification of ‘institutional stocks’”. PepsiCo fits this description well…” (Click here to see the full text)

2. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 75

Dividend Yield as of December 21: 3.35%

Exxon Mobil Corporation (NYSE:XOM) is an American energy giant that explores for and produces crude oil and natural gas in the United States and internationally. It operates through Upstream, Downstream, and Chemical segments. Exxon Mobil Corporation (NYSE:XOM)’s dividend payments to shareholders have grown at an average annual rate of 5.9% over the last 40 years. It is one of the premier widow and orphan stocks to invest in. 

On December 8, Exxon Mobil Corporation (NYSE:XOM) said it will expand its stock buyback plan to $50 billion through 2024, including $15 billion this year. The company said it expects to “double earnings and cash flow potential” by 2027 compared to 2019, while also remaining on track to deliver nearly $9 billion in structural cost savings by the end of 2023 as compared to 2019 levels. Exxon Mobil Corporation (NYSE:XOM) raised its quarterly dividend by 3.4% to $0.91 per share, which was paid to shareholders on December 9. 

Piper Sandler analyst Ryan Todd on December 19 maintained an Overweight rating on Exxon Mobil Corporation (NYSE:XOM) but lowered the price target on the shares to $127 from $131. “Even after two years of outperformance,” the analyst remains constructive on the energy complex into 2023. He sees refining “as likely to lead the charge” in 2023, with sustained tightness in product markets driving a similar margin environment to 2022.

According to Insider Monkey’s Q3 data, 75 hedge funds were long Exxon Mobil Corporation (NYSE:XOM), compared to 72 funds in the prior quarter. Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with 33.8 million shares worth approximately $3 billion. 

In its Q2 2022 investor letter, First Eagle Investments, an asset management firm, highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:

“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industry wide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

1. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 85

Dividend Yield as of December 21: 2.54%

Johnson & Johnson (NYSE:JNJ), an American multinational healthcare company, is one of the best widow and orphan stocks to consider for a safe portfolio. Johnson & Johnson (NYSE:JNJ) paid a $1.13 per share quarterly dividend to shareholders on December 6. 2022 marked the 60th consecutive year of dividend increases by the company. 

On December 12, Citi analyst Joanne Wuensch raised the price target on Johnson & Johnson (NYSE:JNJ) to $205 from $198 and maintained a Buy rating on the shares. The analyst is looking for stocks “that will swim past the pandemic.” She does not anticipate it will be an “easy year” to invest in medical technology, but says it “will be one of recovery driven by more level-set expectations and product cycles.”

According to Insider Monkey’s third quarter database, 85 hedge funds were bullish on Johnson & Johnson (NYSE:JNJ), compared to 83 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the biggest stakeholder of the company, with nearly 6 million shares worth $967.2 million.

In its Q2 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Johnson & Johnson (NYSE:JNJ) was one of them. Here is what the fund said:

“Johnson & Johnson (NYSE:JNJ) is currently our largest position and a long-standing holding. The majority of the group’s sales comes from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.

Here’s how JNJ makes and spends a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics (…read more)

You can also take a look at 12 Oil Stocks with Biggest Upside and 12 Penny Stocks with Biggest Upside.