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

In this article, we will discuss the 5 S&P 500 dividend aristocrats popular among hedge funds. If you want to read our detailed analysis of dividend stocks and their performance over the years, go directly to read S&P 500 Dividend Aristocrats List: Sorted By Hedge Fund Popularity. 

5. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 73

AbbVie Inc. (NYSE:ABBV) is an Illinois-based biotech company that specializes in drug and treatment discovery. The company has recently announced its collaboration with Capsida Biotherapeutics to develop genetic therapies for serious eye diseases. Abbvie will be responsible for the development and commercialization of this program.

AbbVie Inc. (NYSE:ABBV), one of the top dividend stocks among hedge funds, currently pays a quarterly dividend of $1.48 per share. The stock has a dividend yield of 3.92%, as of February 24. The company has been raising its dividends consistently for the past 50 years.

As of the close of Q4 2022, 73 hedge funds in Insider Monkey’s database reported owning stakes in AbbVie Inc. (NYSE:ABBV), compared with 80 in the previous quarter. The collective value of these stakes is over $1.5 billion.

Baron Funds mentioned AbbVie Inc. (NYSE:ABBV) in its Q3 2022 investor letter. Here is what the firm has to say:

“AbbVie Inc. (NYSE:ABBV) is a drug developer best known for Humira, an immunosuppressant that is the best selling drug of all time. Given outsized key product risk (patent cliff and generic launches beginning in 2023), AbbVie has broadened its pipeline, highlighted by its Allergan acquisition. Shares fell on results that missed consensus and indications that legacy franchises were outperforming newer product launches, calling into question AbbVie’s long-term strategy. With promising assets in the pipeline and its robust cash flow profile, we believe AbbVie will grow well into the future.”

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).”

3. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 79

An American energy company, Exxon Mobil Corporation (NYSE:XOM) is next on our list of top dividend stocks among hedge funds. Argus raised its price target on the stock to $133 with a Buy rating on the shares. The firm noted that the company’s strong earnings for Q4 reflected its increased production.

Exxon Mobil Corporation (NYSE:XOM) offers a quarterly dividend of $0.91 per share, having raised it by 3% in October 2022. The company’s current growth streak stands at 40 years. The stock’s dividend yield on February 24 came in at 3.31%.

The number of hedge funds tracked by Insider Monkey owning stakes in Exxon Mobil Corporation (NYSE:XOM) grew to 79 in Q4 2022, from 75 a quarter earlier. These stakes have a total value of over $7.1 billion. With roughly 33 million shares, GQG Partners was the company’s leading stakeholder in Q4.

2. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 84

Johnson & Johnson (NYSE:JNJ) is mainly known for developing pharmaceuticals, medical devices, and other consumer goods. In the fourth quarter of 2022, the company reported revenue of $23.7 billion, which fell by 4.4% from the same period last year. However, for FY22, its sales showed a 1.3% year-over-year growth to $94.9 billion. These sales were massively driven by strong commercial execution.

Johnson & Johnson (NYSE:JNJ) offers a quarterly dividend of $1.13 per share and has a dividend yield of 2.91%, as of February 24. The company holds one of the longest dividend growth streaks of 61 years in the US market.

Johnson & Johnson (NYSE:JNJ) was a part of 84 hedge fund portfolios in Q4 2022, as per Insider Monkey’s database. The stakes owned by these hedge funds have a total value of over $5.5 billion.

1. S&P Global Inc. (NYSE:SPGI)

Number of Hedge Fund Holders: 97

S&P Global Inc. (NYSE:SPGI) is a New York-based private banking company. Argus raised its price target on the stock to $400 in February with a Buy rating on the shares. The firm noted that SPGI has outperformed the market over the past quarter and it also sees the company’s double-digit earnings growth this year.

On January 25, S&P Global Inc. (NYSE:SPGI) declared a quarterly dividend of $0.90 per share, consistent with its previous dividend. 2022 marked the company’s 50th consecutive year of dividend growth, which makes it one of the top dividend stocks among hedge funds. Moreover, it returned nearly $1 billion to shareholders in dividends through FY22. The stock has a dividend yield of 1.05%, as of February 24.

As of the close of Q4 2022, 97 hedge funds in Insider Monkey’s database reported having stakes in S&P Global Inc. (NYSE:SPGI), up from 90 in the previous quarter. These stakes have a total value of over $7.8 billion. TCI Fund Management was the company’s leading stakeholder in Q4.

Andvari Associated mentioned S&P Global Inc. (NYSE:SPGI) in its Q4 2022 investor letter. Here is what the firm has to say:

“S&P Global Inc. (NYSE:SPGI) is another company we own that is part of a duopoly in the business of credit rating. S&P and Moody’s have roughly equal market shares and rate more than 90% of all bonds worldwide. The service provides high value for the cost. A company that chooses to issue debt without a rating will pay an interest rate that could be higher by half of a percent. The cost of a higher interest rate far exceeds any savings gained by not using the services of S&P.

We think of S&P as a toll road that earns fees from its customers in exchange for cost-effective access to capital. As such, the company has extraordinary margins and pricing power and requires little of its own capital to grow. Even after fully reinvesting in its business, S&P still has an excess of cash. In 2021, S&P produced $3.5 billion of free cash from $8.3 billion of revenues. The company returns the majority of its free cash to investors in the form of dividends and share repurchases.”

You can also take a look at 13 High Growth Pharma Stocks that are Profitable and 10 High Growth Micro-cap Stocks to Buy

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