S&P 500 Dividend Aristocrats: Top 5 Among Hedge Funds

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

Number of Hedge Fund Holders: 74

The Procter & Gamble Company (NYSE:PG) is an American multinational consumer goods company. It is one of the top dividend stocks among hedge funds as 74 elite funds tracked by Insider Monkey reported owning stakes in the company in Q4 2022, up from 69 in the previous quarter. These stakes are collectively valued at over $4.7 billion.

In February, Citigroup presented a positive stance on the consumer staples sector. Given this, the firm initiated its coverage on The Procter & Gamble Company (NYSE:PG) with a Buy rating and a $160 price target.

On January 10, The Procter & Gamble Company (NYSE:PG) declared a quarterly dividend of $0.9133 per share, which fell in line with its previous dividend. In 2022, the company stretched its dividend growth streak to 66 years. As of February 24, the stock has a dividend yield of 2.64%.

Rowan Street Capital mentioned The Procter & Gamble Company (NYSE:PG) in its Q4 2022 investor letter. Here is what the firm has to say:

“Let’s look at The Procter & Gamble Company (NYSE:PG). Dividend yield is 2.4%. Earnings are forecasted to grow at 5.9%, and its current earnings multiple is at 25x. Now, lets say over the next 3-5 years the market loses interest in the “safe”, mature companies that grow at anemic rates and gets an appetite for growth again. It’s very unlikely that Mr. Market will be paying 25x for 5.9% earnings growth. Lets assume that multiple declines to the market average of 18x — that would be ~6.9% drag per year on the total expected return over next 3-5 years. If we get 2.4% (dividend) + 5.9% (earnings growth) – 6.9% (decrease in earnings multiple) = 1.4% (annual return we can expect on average from this stock).”