The Smart Money Loves These Dividend Aristocrats: Wal-Mart, Chevron, More

#3 Chevron Corporation (NYSE:CVX)

– Number of Hedge Fund Shareholders (as of June 30): 47
– Total Value of Hedge Funds’ Holdings (as of June 30): $1.96 billion
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 1.00%

Although Brent prices just recently peeked above the $50 per barrel mark, Chevron Corporation (NYSE:CVX) shares have nevertheless rallied by over 14% year-to-date. The number of smart money funds in our system with holdings in Chevron also inched up by one during the second quarter to 47 at the end of June. One big reason why Chevron has shown relative strength and the smart money loves the stock is that investors remain confident in the safety of the company’s annual dividend of $4.28 per year. That payout currently amounts to an annual yield of 4.16%, or more than double the 10-year yield. With Chevron’s production expected to grow over the next few years and OPEC having just announced that it will curtail production, many investors don’t think Chevron will have to cut its dividend any time soon.

#2 AT&T Inc. (NYSE:T)

– Number of Hedge Fund Shareholders (as of June 30): 55
– Total Value of Hedge Funds’ Holdings (as of June 30): $3.56 billion
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 1.30%

AT&T Inc. (NYSE:T) is the definition of a wide-moat stock. First, it has substantial economies of scale that afford it wide margins given its leading position in the telecommunications business. Second, the company has strong customer lock-in given its many contracts and brand loyalty. Third, AT&T has great financial resources that provide it flexibility when needed. Given those traits, it isn’t surprising that AT&T has raised its dividend for 31 years in a row, to the current annualized payout of $1.92 per share, which translates into a juicy 4.73% yield. It also isn’t surprising that 55 funds that we track had a long position in AT&T Inc. (NYSE:T) as of the most recent 13F reporting period, up by four funds over the second quarter.

#1 Wal-Mart Stores, Inc. (NYSE:WMT)

– Number of Hedge Fund Shareholders (as of June 30): 58
– Total Value of Hedge Funds’ Holdings (as of June 30): $6.87 billion
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 3.00%

Although the company has unquestionably been overshadowed by the continued growth of Amazon.com, Inc. (NASDAQ:AMZN) in recent years, the smart money still loves Wal-Mart Stores, Inc. (NYSE:WMT). According to our database, 58 funds were bullish on Wal-Mart Stores, Inc. (NYSE:WMT) at the end of June, up by four from the end of March. Given the company’s massive financial resources, wide economies of scale, and attractive margins, Wal-Mart remains as attractive a dividend play as ever. Shares currently sport an annual yield of 2.77%, thanks to an annualized payout of $2 per share. Wal-Mart’s dividend has grown for 41-straight years and will likely continue to grow in the future given that the company’s payout ratio is just 46.2%. Wal-Mart also isn’t standing still in its battle against Amazon. The company recently closed on the acquisition of Jet.com, which could help it gain more e-commerce market share in the future.

Disclosure: None