In this article, we discuss 10 best May dividend stocks to buy. You can skip our detailed analysis of dividend stocks and their past performance, and go directly to read 5 Best May Dividend Stocks To Buy.
We are nearly halfway through 2024 and the market is showing stable performance. Though the S&P 500 fell by nearly 4% in April, the index surged by 8.12% this year so far and also recorded its biggest first-quarter gain since 2019. Analysts are also holding a positive stance about the market’s condition this year as they predict that earnings growth for the S&P 500 will pick up speed, reaching 9.7% in the second quarter, as reported by Forbes. They also expect that companies in the index will deliver an impressive 10.8% growth in earnings for the rest of 2024. In addition to this, dividend stocks are also showing a modest performance this year, with the S&P 500 Dividend Aristocrats Index gaining 2.07% year-to-date.
Regardless of market conditions, investors consistently favor dividend stocks as they are known for generating regular income for them. Dividend growth stocks are especially important in this strategy because of their compounding effect and share price appreciation. The S&P High Yield Dividend Aristocrat Index tracks the performance of companies that have raised their dividends consistently for at least 20 years. According to a report by S&P Dow Jones Indices, between December 31, 1999, and March 31, 2024, the index produced a total return of 915.47% and a price return of 344.83%. The difference of 570.64% between the total return and price return is attributed to the dividends received over the period. The report further mentioned that the dividend growth rate of companies in the S&P High Yield Dividend Aristocrat Index has also surpassed inflation over the long term. The index’s dollar dividends grew at a compound annual growth rate of 4.96% from 2000 to 2023, exceeding the performance of the Consumer Price Index (CPI) during the same period. Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) are some of the best dividend stocks that have grown their dividends for decades and have delivered solid returns over the years. You can also take a look at
Given investors’ inclination toward dividend stocks, companies around the world are increasingly adopting the strategy of growing their dividends steadily over time. Janus Henderson Investors reported that global dividends have grown from $1.24 trillion in 2017 to $1.66 trillion in 2023. The fund manager also expects global dividends to reach their all-time of $1.72 trillion in 2024, showing a nearly 4% growth on a headline basis. Analysts are also optimistic about dividend growth in the US. According to a report by S&P Global Market Intelligence, all 20 sectors within the US market are predicted to boost their regular dividend payouts this year, with an annual average rise of 6%. This growth is partially credited to companies that resumed dividend payments in 2023 following dividend cuts induced by the pandemic of 2020, and a few more are expected to follow suit in 2024.
While long-term investors like to hold onto dividend stocks for long-term gains, some aim for maximum returns in the short term through a strategy called dividend capture that involves purchasing a stock just before the dividend is distributed, holding it just long enough to receive the dividends, and then selling it. To learn more about this strategy, read our article Dividend Capture Strategy: 10 High Yield Stocks To Buy in November. In this article, we will take a look at some of the best dividend stocks that are trading ex-dividend in May.
For this list, we selected dividend stocks that will trade ex-dividend in May 2024. Ex-dividend date indicates the cutoff day to buy a stock to receive its upcoming dividend payment. We also measured hedge fund sentiment around each stock, according to Insider Monkey’s Q4 2023 data of 933 elite funds. The list is ranked in ascending order of their ex-dividend dates. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Janus Henderson Group plc (NYSE:JHG) is a UK-based asset management company that offers a wide range of financial products and services to advisors and investors globally. In the first quarter of 2024, the company returned $145 million to shareholders through dividends and share repurchases.
Janus Henderson Group plc (NYSE:JHG), one of the best dividend stocks on our list, started paying dividends in 2017 and has paid regular dividends to shareholders since then. It currently pays a quarterly dividend of $0.39 per share and has a dividend yield of 4.79%, as of May 5.
At the end of Q4 2023, 26 hedge funds tracked by Insider Monkey held stakes in Janus Henderson Group plc (NYSE:JHG), compared with 27 in the previous quarter. These stakes have a total value of more than $1.3 billion. With roughly 32 million shares, Trian Partners was the company's leading stakeholder in Q4.
An American multinational tech giant, Apple Inc. (NASDAQ:AAPL) is next on our list of the best dividend stock to buy in May. The company declared a 4.2% hike in its quarterly dividend on May 2 to $0.25 per share. This marked the company's 12th consecutive year of dividend growth. The stock has a dividend yield of 0.52%, as of May 5.
In the fiscal second quarter of 2024, Apple Inc. (NASDAQ:AAPL) reported revenue of $90.8 billion, which fell by over 4% from the same period last year, but beat analysts' estimates by $190 million. The company's cash position also remained strong during the quarter as it generated over $62.5 billion in operating cash flow.
As of the close of Q4 2023, 131 hedge funds held stakes in Apple Inc. (NASDAQ:AAPL), compared with 134 in the previous quarter, as per Insider Monkey's database. These stakes are worth over $205.8 billion in total. Warren Buffett's Berkshire Hathaway owned over $174.3 billion worth of stakes in the company, becoming its largest stakeholder in Q4.
Archer-Daniels-Midland Company (NYSE:ADM) is an Illinois-based food processing company that provides food ingredients and agricultural processors. On May 1, the company declared a quarterly dividend of $0.50 per share, which was in line with its previous dividend. Overall, it has raised its payouts for 51 years in a row, which makes ADM one of the best dividend stocks on our list. As of May 5, the stock has a dividend yield of 3.38%.
Archer-Daniels-Midland Company (NYSE:ADM) was a part of 34 hedge fund portfolios at the end of Q4 2023, down from 37 in the previous quarter, according to our database. The stakes held by these hedge funds have a collective value of roughly $820 million.
Pool Corporation (NASDAQ:POOL) is an American company that distributes swimming pool supplies and equipment. The company reported a strong cash generation in the first quarter of 2024 with an operating cash flow of $145.4 million, up 41% from the same period last year. During the quarter, the company returned $42.3 million through dividends, which makes POOL one of the best dividend stocks to buy in May.
On May 1, Pool Corporation (NASDAQ:POOL) declared a 9.1% hike in its quarterly dividend to $1.20 per share. Through this increase, the company stretched its dividend growth streak to 13 years. The stock has a dividend yield of 1.32%, as of May 5. The stock will be trading ex-dividend on May 15.
According to Insider Monkey's database of Q4 2023, 42 hedge funds in Insider Monkey's database owned stakes in Pool Corporation (NASDAQ:POOL), up from 41 in the previous quarter. These stakes are collectively valued at over $767 million. Among these hedge funds, Select Equity Group was the company's leading stakeholder in Q4.
Wedgewood Partners mentioned Pool Corporation (NASDAQ:POOL) in its Q1 2024 investor letter. Here is what the firm has to say:
“Pool Corporation (NASDAQ:POOL)’s stock was flat during the first quarter. The Company reported sales in their last quarter that declined -8% due to mild weather earlier in the year and after a few years of elevated sales driven by COVID-19 dynamics. We view these declines as transient and are not reflective of longer-term industry competitive dynamics. The Company continues to take market share in the North American pool care business and has maintained excellent profit and return metrics during this post-Covid digestion period. Pool Corp differentiates itself by carrying a large array of industry-specific products compared to mass-market retailers that carry more standardized products or smaller industry competitors that have less availability or narrower selections. This sweet spot positions Pool Corp well in the expanding pool care and development market and the Company should be able to drive double-digit earnings growth over the next several years.”
A Canada-based media company, Thomson Reuters Corporation (NYSE:TRI) ranks sixth on our list of the best dividend stocks. The company's current quarterly dividend comes in at $0.54 per share for a dividend yield of 1.31%, as of May 5. It holds a 31-year track record of consistent dividend growth.
In the first quarter of 2024, Thomson Reuters Corporation (NYSE:TRI) reported an operating cash flow of $432 million, up from $267 million during the same period last year. Its free cash flow also jumped to $271 million during the quarter, from $133 million in the prior-year period.
Insider Monkey's database of Q4 2023 indicated that 17 hedge funds held stakes in Thomson Reuters Corporation (NYSE:TRI), up from 16 in the previous quarter. The consolidated value of these stakes is nearly $171 million. Ken Griffin's Citadel Investment Group was the company's leading stakeholder in Q4.
