Top 5 Dividend Stocks To Buy According To Hedge Funds

2. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 173

Visa Inc. (NYSE:V) is a global leader in financial services that specializes in electronic payments around the world. It is one of the best dividend stocks on our list as it returned $3.2 billion to shareholders in dividends and share repurchases during fiscal second quarter. In addition to this, the company has been growing its dividends consistently for the past 16 years. It pays a quarterly dividend of $0.45 per share, resulting in a dividend yield of 0.81%.

Following the company’s strong quarterly earnings, Barclays raised its price target on Visa Inc. (NYSE:V) to $272 and maintained an Overweight rating on the stock.

As of the close of Q1 2023, 173 hedge funds in Insider Monkey’s database own stakes in Visa Inc. (NYSE:V), worth collectively over $26 billion.

Polen Capital mentioned Visa Inc. (NYSE:V) in its Q1 2023 investor letter and made the following comment.

“We trimmed Mastercard and Visa Inc. (NYSE:V) to equal weights of the Portfolio. Mastercard and Visa operate as a duopoly in a large and growing market. Over the last 50 years, global personal consumer expenditures (PCE) has grown 7-9% annualized. We expect 4-5% long-term PCE growth going forward. Additionally, the shift from cash to credit continues unabated, with a total credit penetration of only approximately 50% globally.3 This shift provides Visa and Mastercard with another ~4-6% of growth. When combined with PCE, this gives both companies high-single-digit to low-double[1]digit revenue growth opportunities. This growth estimate is before accounting for growth amplifiers like the acceleration of e[1]commerce, the shift from offline to online, and additional services. Both companies enjoy extremely strong network effects that provide strong competitive advantages.

We have trimmed Visa and Mastercard because their combined weight grew to over 12% of the Global Growth Portfolio because of their recent performance and to fund our increase in Amazon’s position size. We added to both positions when their prices were depressed due to cross-border transactions deteriorating materially from the pandemic. Cross-border volumes came roaring back when travel corridors reopened, and although we are several quarters removed from the cross-border nadir, Visa still grew volumes >30% in 1Q23. Total cross-border volumes are now 132% of 2019 levels. At 4.5% each, both companies remain high conviction positions for Global Growth.”