In this article, we discuss top 5 high dividend stocks to buy according to hedge funds. If you want to read our detailed analysis of dividend stocks, go directly to read Top 13 High Dividend Stocks to Buy According to Hedge Funds.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 71
Dividend Yield as of October 6: 3.93%
AbbVie Inc. (NYSE:ABBV) is an American biotech company that specializes in pharmaceuticals and other treatments for patients with serious illnesses. The company reported strong results in Q2 2022, posting revenue of $14.5 billion, which showed a 4.4% growth from the same period last year. Its operating cash flow for the quarter came in at over $5 billion, up from $4.9 billion in the previous quarter. The free cash flow of $4.8 billion was enough to support its dividends during the quarter.
AbbVie Inc. (NYSE:ABBV) has been raising its dividends consistently since its spin-off in 2013. Since then, the company has raised its dividend by 250%, which makes it one of the best dividend stocks on our list. It currently pays a quarterly dividend of $1.41 per share, with a dividend yield of 3.93%, as of October 6.
In September, JPMorgan raised its price target on AbbVie Inc. (NYSE:ABBV) to $180 with an Overweight rating on the shares, as the firm sees a strong case for multiple expansions. The firm also called ABBV one of its favorite large-cap ideas.
At the end of Q2 2022, 71 hedge funds in Insider Monkey’s database owned stakes in AbbVie Inc. (NYSE:ABBV), compared with 76 in the previous quarter. The collective value of these stakes is over $2.8 billion. With over 4.2 million shares, Arrowstreet Capital was the company’s leading stakeholder in Q2.
ClearBridge Investments mentioned AbbVie Inc. (NYSE:ABBV) in its Q2 2022 investor letter. Here is what the firm has to say:
“We added to our health care exposure in the quarter with the purchases of Straumann Holding (OTCPK:SAUHF), a Swiss manufacturer of medical instruments, implants and related supplies for dental procedures, in the secular bucket and U.S. pharmaceutical maker AbbVie Inc. (NYSE:ABBV) in the structural bucket. Straumann is the global market leader in dental implants with 29% overall share, a meaningful position within premium implants and smaller share in value implants. The company is also involved in clear aligners through a series of acquisitions as well as peripheral capital equipment around those businesses.
Growth will come from increasing share in both value implants and clear aligners through expansion in emerging markets on top of market growth in its premium implant business. AbbVie is undergoing a transition in anticipation of loss of exclusivity for its blockbuster Humira in the next several years with several commercial therapeutics, led by Skyrizi for psoriasis and Rinvoq for rheumatoid arthritis.”
4. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 75
Dividend Yield as of October 6: 3.51%
An American telecommunications company, Comcast Corporation (NASDAQ:CMCSA) recently succeeded in its tech test for 10G network and modem technologies, including a complete network-to-home 10G loop. The company is also planning to launch a nationwide rollout of multi-gigabit speeds for its internet service.
Comcast Corporation (NASDAQ:CMCSA) has been raising its dividends consistently for the past 14 years. It currently pays a quarterly dividend of $0.27 per share and has a dividend yield of 3.51%, as of October 6. The company generated $3.2 billion in free cash flow during Q2 2022 and paid $1.2 billion in dividends. This indicates that the company’s dividends are secure within its FCF.
In September, Benchmark maintained its Buy rating on Comcast Corporation (NASDAQ:CMCSA) with a $46 price target. The firm highlighted the significant growth in the company’s wireless broadband business.
As of the close of June 2022, 75 hedge funds tracked by Insider Monkey owned stakes in Comcast Corporation (NASDAQ:CMCSA), down from 78 in the previous quarter. The collective value of these stakes is nearly $5.4 billion.
3. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 79
Dividend Yield as of October 6: 3.12%
Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based multinational pharmaceutical company that provides innovative health solutions to its patients. Recently, the company announced the expansion of its footprint in Singapore, as it opened a new packaging facility to support the production of vaccines and biologics in the country. The company started its operations in Singapore in 1997.
In Q2 2022, Merck & Co., Inc. (NYSE:MRK) reported an operating cash flow of $4.3 billion, compared with $4.7 billion in the previous quarter. Its free cash flow for the quarter came in at $3.1 billion and has a healthy dividend payout ratio of 41.3%. The company has been raising its dividends consistently for the past 11 years, coming through as one of the best dividend stocks. Merck & Co., Inc. (NYSE:MRK) currently pays a quarterly dividend of $0.69 per share, with a dividend yield of 3.12%, as of October 6.
In September, Berenbergy upgraded Merck & Co., Inc. (NYSE:MRK) to Buy and also lifted its price target on the stock to $100. The firm appreciated the company’s medium-term growth which is above the sector average.
At the end of Q2 2022, 79 hedge funds in Insider Monkey’s database owned stakes in Merck & Co., Inc. (NYSE:MRK), valued at over $6.1 billion. Fisher Asset Management was the company’s leading stakeholder in Q2.
Chartwell Investment Partners mentioned Merck & Co., Inc. (NYSE:MRK) in its Q2 2022 investor letter. Here is what the firm has to say:
“In the Dividend Equity accounts, the three best performers in Q2 includes Merck (NYSE:MRK, 3.6%), up 12.0%. Merck, like other pharma companies, is in a defensive business, but the stock also did well as peak-sales estimates for their flagship drug, Keytruda, have gone up (JPMorgan estimates $32 billion in sales by 2026).”
2. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 82
Dividend Yield as of October 6: 4.65%
Citigroup Inc. (NYSE:C) is an American multinational investment banking company that also provides financial and other banking services to its consumers. The company is one of the major banks to reserve a spot in the global investment banking table. The bank generated over $2.3 billion in revenue as of September 2022, accounting for 4.2% of the global investment banking revenue.
Citigroup Inc. (NYSE:C) generated over $9 billion in free cash flow in the second quarter of 2022, which smoothly covered its dividend payments worth over $1 billion. The company has a safe payout ratio of 29%, which further indicated dividend growth. Though Citigroup Inc. (NYSE:C) does not have a dividend growth track record, it has raised its payouts at a CAGR of 20.59% in the last five years. It currently pays a quarterly dividend of $0.51 per share for a yield of 4.65%, as of October 6.
In July, Oppenheimer raised its price target on Citigroup Inc. (NYSE:C) to $86 with an Outperform rating on the shares, highlighting the company’s clean balance sheet with minimal loans.
As of the close of Q2 2022, 82 hedge funds in Insider Monkey’s database reported owning stakes in Citigroup Inc. (NYSE:C), compared with 88 in the previous quarter. These stakes have a total value of over $7.4 billion.
Diamond Hill Capital mentioned Citigroup Inc. (NYSE:C) in its Q1 2022 investor letter. Here is what the firm has to say:
“Shares of Citigroup declined in the quarter as investors became increasingly negative on capital markets activity. The company is also continuing to divest certain consumer banking geographies which may be dilutive to earnings in the near term.”
1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 104
Dividend Yield as of October 6: 3.62%
JPMorgan Chase & Co. (NYSE:JPM) is a New York-based investment banking company that also operates as a financial holding company. In September, Deutsche Bank maintained its Buy rating on the stock with a $155 price target, mentioning that banking stocks could deliver a long-term performance in the current environment.
On September 20, JPMorgan Chase & Co. (NYSE:JPM) declared a quarterly dividend of $1.00 per share, consistent with its previous dividend. The company maintains a seven-year streak of consistent dividend growth. As of October 6, the stock’s dividend yield came in at 3.62%.
As of the close of Q2 2022, 104 hedge funds tracked by Insider Monkey owned stakes in JPMorgan Chase & Co. (NYSE:JPM), falling from 110 in the previous quarter. These stakes hold a combined value of over $5.8 billion, compared with $5 billion worth of stakes owned by hedge funds in the previous quarter.
You can also take a look at 10 Dividend Stocks to Buy According to Billionaire Carl Icahn’s Icahn Capital LP and 10 Dividend Stocks to Buy According to Billionaire Cliff Asness
