In this article, we will be taking a look at 5 dividend growth stocks to buy. To read our detailed analysis of dividend investing, you can go directly to see 10 Dividend Growth Stocks to Buy.
5. Air Products and Chemicals, Inc. (NYSE: APD)
Number of Hedge Fund Holders: 40
Dividend Yield: 2.3%
Air Products and Chemicals, Inc. (NYSE: APD) operates in the industrial gases industry and provides atmospheric gases, process and speciality gases, equipment, and related services. The company functions globally to produce atmospheric gases among others and ranks 5th on our list of dividend growth stocks to buy.
Societe Generale this June raised its price target on shares of Air Products and Chemicals, Inc. (NYSE: APD) from $295 to $334. The firm also reiterated a Buy rating on the stock.
In the second quarter of 2021, Air Products and Chemicals, Inc. (NYSE: APD) had an EPS of $2.31, beating the previous quarter’s EPS of $2.08. The company’s revenue was $2.60 billion, up 26.12% year over year and also beating estimates by about $129.94 million.
By the end of the second quarter of 2021, 40 hedge funds out of the 873 tracked by Insider Monkey held stakes in Air Products and Chemicals, Inc. (NYSE: APD) worth roughly $456 million. This is compared to 32 hedge funds in the previous quarter with a total stake value of approximately $586 million.
4. Sysco Corporation (NYSE: SYY)
Number of Hedge Fund Holders: 40
Dividend Yield: 2.34%
Sysco Corporation (NYSE: SYY), a food distributor and consumer staples company, engages in the marketing and distribution of food and related products in the US, Canada, the UK, France, and across the globe. The company ranks 4th on our list of dividend growth stocks to buy and operates through its U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments.
This July, UBS analysts initiated coverage of Sysco Corporation (NYSE: SYY) shares with a Buy rating. The firm also holds an $89 price target on the stock.
In the second quarter of 2021, Sysco Corporation (NYSE: SYY) had an EPS of $0.71, beating estimates by $0.11. The company’s revenue was $16.14 billion, up 82% year over year and also beating estimates by about $1.49 billion. Sysco Corporation (NYSE: SYY) has gained 1.83% in the past 6 months and 11.30% year to date.
By the end of the second quarter of 2021, 40 hedge funds out of the 873 tracked by Insider Monkey held stakes in Sysco Corporation (NYSE: SYY) worth roughly $2.6 billion. This is compared to 42 hedge funds in the previous quarter with a total stake value of approximately $2.7 billion.
3. PepsiCo, Inc. (NASDAQ: PEP)
Number of Hedge Fund Holders: 66
Dividend Yield: 2.8%
PepsiCo, Inc. (NASDAQ: PEP), a global food and beverage company operating through a range of brands like Cheetos, Doritos, Lay’s, Aquafina, among others, is next on our list of dividend growth stocks to buy. The company ranks 3rd on our list.
Wells Fargo, as of this July, holds an Equal Weight rating on PepsiCo, Inc. (NASDAQ: PEP) shares. The firm has also raised its price target on the stock from $147 to $160.
In the second quarter of 2021, PepsiCo, Inc. (NASDAQ: PEP) had an EPS of $1.71, beating estimates by $0.17. The company’s revenue was $19.22 billion, up 20.52% year over year and also beating estimates by about $1.27 billion. PepsiCo, Inc. (NASDAQ: PEP) has gained 16.69% in the past 6 months and 7.76% year to date.
By the end of the second quarter of 2021, 66 hedge funds out of the 873 tracked by Insider Monkey held stakes in PepsiCo, Inc. (NASDAQ: PEP) worth roughly $5.2 billion. This is compared to 61 hedge funds in the previous quarter with a total stake value of approximately $4.9 billion.
2. The Clorox Company (NYSE: CLX)
Number of Hedge Fund Holders: 37
Dividend Yield: 2.8%
The Clorox Company (NYSE: CLX) is a consumer staples corporation manufacturing and marketing a range of products across the globe. The company operates through its Health and Wellness, Household, Lifestyle, and International segments, and ranks 2nd on our list of dividend growth stocks to buy.
As of this August, analysts at DA Davidson hold a Neutral rating and a $145 price target on shares of The Clorox Company (NYSE: CLX).
In the fiscal fourth quarter of 2021, The Clorox Company (NYSE: CLX) had an EPS of $0.95, missing estimates by $0.36. The company’s revenue was $1.80 billion, beating the previous quarter’s revenue of $1.78 billion.
By the end of the second quarter of 2021, 37 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Clorox Company (NYSE: CLX) worth roughly $980 million. This is compared to 38 hedge funds in the previous quarter with a total stake value of approximately $1.2 billion.
LRT Capital Management, an investment management firm, mentioned The Clorox Company (NYSE: CLX) in its first-quarter 2021 investor letter. Here’s what they said:
“For several months now, our largest position has been Clorox – the cleaning products company. Besides wipes, the company also manufactures bleach, charcoal, cat litter, plastic bags, and container products. Clorox benefited during the Covid-19 pandemic from an increased demand for cleaning products. Companies and consumers trust the Clorox brand – a source of the company’s huge competitive advantage.
United Airlines, for example, chose to partner with Clorox in its push to reassure consumers about the safety of air travel. The company is a typical “defensive” holding – subject to very small fluctuations in end market demand. Its branded consumer products remain in strong demand. Historically (pre-Covid), the company’s sales grew in line with GDP, while earnings-per-share grew slightly faster due to operational and financial leverage. We expect sales will decline slightly in the next few quarters as the Covid-19 pandemic comes to an end, but we believe this decline is more than accounted for by the company’s low valuation.
On February 4th, Clorox reported results for Q4 2020, with both earnings and sales beating estimates. Sales grew by +27% (vs. 20% estimate) from the prior year’s Q4, and EPS increased +39% ($2.03 vs. $1.75 expected). The company continues to see robust demand and raised its sales and EPS guidance for the rest of the year. Shares are down 4% year-to-date. We believe the shares are undervalued at 20x trailing and 24x forward earnings and currently represent an excellent opportunity.”
1. Vedanta Limited (NYSE: VEDL)
Number of Hedge Fund Holders: 10
Dividend Yield: 8.6%
Vedanta Limited (NYSE: VEDL) is a diversified natural resources company operating in India and exploring for, developing, extracting, producing, processing, and selling oil and gas, zinc, lead, silver, copper, and other metals. The company ranks 1st on our list of dividend growth stocks to buy.
By the end of the second quarter of 2021, 10 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vedanta Limited (NYSE: VEDL) worth roughly $64 million. This is compared to 10 hedge funds in the previous quarter with a total stake value of approximately $85 million.
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