Top 5 Dividend Stocks To Buy According To Hedge Funds

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 289

Microsoft Corporation (NASDAQ:MSFT) leads our list of the top dividend stocks according to hedge funds. The company saw a growth in the number of bullish hedge funds at the end of the first quarter as 289 funds tracked by Insider Monkey owned stakes in the company, up from 259 in the preceding quarter. These stakes have a collective value of roughly $58 billion.

In the third quarter of fiscal 2023, Microsoft Corporation (NASDAQ:MSFT) returned $9.7 billion to shareholders in dividends and share repurchases. The company pays a quarterly dividend of $0.68 per share and has raised its dividends for 16 years in a row. With a dividend yield of 0.87% Microsoft is one of the best dividend stocks according to hedge funds.

Fred Alger Management revealed why Microsoft Corporation (NASDAQ:MSFT) is investors’ favorite choice in its Q1 2023 investor letter. 

“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office. LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services. Azure, and Enterprise Services), and More Personal Computing (Windows Devices, Gaming, and Search). While the company reported decent fiscal second quarter results, their investment in OpenAl’s ChatGPT captured the attention of investors. contributing to positive performance. Throughout the quarter. Microsoft surprised investors with continual rollouts of new Al capabilities across the company’s portfolio (e.g., Bing, GitHub. Teams, Office 365). Furthermore, the company announced Microsoft 365 Copilot, which leverages GPT-4, a large language model, combined with the Microsoft Graph of data to provide Al virtual assistance. We believe Microsoft’s investment in OpenAl provides a first-mover advantage in the Al transformer model space. Despite challenges in the early days of Al-powered applications, the pace of Al innovation is faster than any other enterprise technology previously observed, in our view.”

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