In this article, we discuss 10 reliable dividend stocks billionaires are loading up on. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read 5 Reliable Dividend Stocks Billionaires Are Loading Up On.
Dividends have been one of the potential income sources for wealthy investors. According to a report published by Tax Policy Center in 2015, dividends represented 15% to 20% of the income of American taxpayers making $10 million or more. This assessment is not confined to the US only, various studies have also been published that support the significance of dividend income in billionaires’ wealth. While 2020 was a difficult year for the average Australian citizen, at least 11 billionaires in the country received tens of millions of dollars in dividends from companies on JobKeeper, a wage subsidy available to help small businesses affected by the pandemic, as reported by The Guardian.
Quality dividend companies are popular among billionaire investors as they tend to be more established and know how to balance their dividend payouts with other priorities. Cash flow generation and growth prospects also drive investors to load up on dividend stocks. Dividend payouts have shown a consistent upward trend over the past years as companies worldwide demonstrated stability and confidence in their business operations. The trend is most likely to continue this year as well. Janus Henderson expects global dividends to reach $1.64 trillion in 2023, up 5% from the last year.
Along with dividend growth, analysts and investors also pay attention to dividend yields when investing in dividend stocks. Yields between 3% to 6% are generally considered healthy as stocks within this range can generate a meaningful income stream without relying solely on capital gains. To learn more about safe dividend stocks with high yields, readers can have a look at 15 Best High Yield Dividend Stocks to Buy.
Goldman Sachs Chief US Equity Strategist David Kostin highlighted the importance of strong dividend payers in his Business Insider interview. He said that big-dividend payers are great investment options in the current inflationary environment where overall dividend growth is better than buyback growth. Some of the most reliable dividend stocks that are grabbing the attention of billionaire investors include Walmart Inc. (NYSE:WMT), AbbVie Inc. (NYSE:ABBV), The Procter & Gamble Company (NYSE:PG), and others that are discussed below.
Reliable Dividend Stocks Billionaires Are Loading Up On
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Our Methodology:
For this article, we first scanned the database of billionaire-owned stocks maintained by Insider Monkey as of Q1 2023. From this database, we picked dividend stocks with at least 10 years of consecutive dividend growth, which shows that these stocks are the most reliable investment options for billionaire investors. We also measured hedge fund sentiment around each stock from our database of 943 hedge funds at the end of Q1. The stocks are ranked in ascending order of the number of billionaire investors having stakes in them.
The Sherwin-Williams Company (NYSE:SHW) is an American paint and coating manufacturing company, based in Ohio. In the first quarter of 2023, the company reported an operating cash flow of $88.2 million, mainly driven by higher profits. Due to its strong cash position, the company was able to return $458.2 million to shareholders through dividends and share repurchases. It is one of the most reliable dividend stocks on our list that attracted the attention of 17 billionaires in Q1, including Ken Fisher and D. E. Shaw.
The Sherwin-Williams Company (NYSE:SHW) currently pays a quarterly dividend of $0.605 per share. The company has been growing its dividends for 44 years. The stock's dividend yield on June 2 came in at 1.03%. Walmart Inc. (NYSE:WMT), AbbVie Inc. (NYSE:ABBV), and The Procter & Gamble Company (NYSE:PG) are other prominent dividend stocks among investors.
In May, Jefferies upgraded The Sherwin-Williams Company (NYSE:SHW) to Buy with a $275 price target, up from $240. The firm highlighted that the stock's risk/reward is improving, which is also benefitting the company's sales.
At the end of Q1 2023, 68 hedge funds tracked by Insider Monkey owned stakes in The Sherwin-Williams Company (NYSE:SHW), up from 64 in the previous quarter. These stakes have a collective value of nearly $2.8 billion.
ClearBridge Investments mentioned The Sherwin-Williams Company (NYSE:SHW) in its Q4 2022 investor letter. Here is what the firm has to say:
“A third approach to return generation is purchasing idiosyncratic businesses that largely control their own destiny. We saw mixed results from this group in the fourth quarter, with paint and coatings maker The Sherwin-Williams Company (NYSE:SHW) benefiting from significant pricing power that will allow it to grow earnings handsomely with only modest revenue increases.”
Johnson & Johnson (NYSE:JNJ) is next on our list of reliable dividend stocks billionaires are loading up on. The American pharmaceutical company has been raising its dividends consistently for the past 62 years. It currently pays a quarterly dividend of $1.19 per share and has a dividend yield of 3.09%, as of June 2.
In the first quarter of 2023, Johnson & Johnson (NYSE:JNJ) reported revenue of $24.7 billion, which showed a 5.6% growth from the same period last year. The company's revenue also beat analysts' estimates by $1.09 billion. Its MedTech sector also showed a 7.3% year-over-year growth with sales amounting to over $7.4 billion.
Citigroup resumed its coverage on Johnson & Johnson (NYSE:JNJ) in May with a Buy rating and a $185 price target. The firm noted that the company has world-leading medical technology and pharmaceutical franchises.
As of the close of Q1 2023, 86 hedge funds in Insider Monkey's database held stakes in Johnson & Johnson (NYSE:JNJ), compared with 84 in the previous quarter. These stakes have a consolidated value of over $4.5 billion. With over 4.8 million shares, billionaire Ken Griffin's Citadel Investment Group was the company's leading stakeholder in Q1.
Colgate-Palmolive Company (NYSE:CL) is an American diversified company that manufactures and distributes household and commercial products. Following the company's strong Q1 earnings, Deutsche Bank raised its price target on the stock to $88 and kept a Buy rating on the shares.
Colgate-Palmolive Company (NYSE:CL) generated revenue of $4.77 billion in Q1 2023, up 8.4% from the same period last year. Its operating cash flow came in at $735 million, growing from $386 million in the prior-year period. The company's free cash flow for the quarter stood at $572 million before dividend payments. Colgate-Palmolive Company (NYSE:CL) is one of the most reliable dividend stocks with 18 billionaire investors as of Q1.
Colgate-Palmolive Company (NYSE:CL) offers a quarterly dividend of $0.48 per share. The company holds a 61-year streak of dividend growth. The stock has a dividend yield of 2.55%, as of June 2.
The number of hedge funds tracked by Insider Monkey owning stakes in Colgate-Palmolive Company (NYSE:CL) stood at 55 in Q1 2023. The total value of these stakes is over $3.2 billion. Cliff Asness, Ray Dalio, and Steve Cohen were some of the most prominent billionaires having stakes in the company.
“Existing positions in LVMH, Disney and Microsoft gained while FIS, Bath & Body Works, and Colgate-Palmolive Company (NYSE:CL) posted losses after their management teams lowered 2023 guidance despite reporting solid quarterly results. FIS and Colgate have both since “beat and raised” this guidance, indicating that many management teams are adopting very conservative tones in this uncertain macro environment.”
The Coca-Cola Company (NYSE:KO) is a multinational beverage company that also manufactures non-alcoholic beverage concentrates and syrups. In April, Barclays raised its price target on the stock to $73 and maintained an Overweight rating on the shares. The firm highlighted that the company reported a strong start to 2023 with a 'Q1 profit beat'.
The Coca-Cola Company (NYSE:KO) reported an operating cash flow of $160 million and its free cash flow came in at $120 million in the first quarter of 2023. For FY23, the company expects to generate approximately $9.5 billion in free cash flow and $11.4 billion in operating cash flow.
On April 26, The Coca-Cola Company (NYSE:KO) declared a quarterly dividend of $0.46 per share, which was in line with its previous dividend. The stock's dividend yield on June 2 came in at 3.03%. It is one of the most reliable dividend stocks among billionaires with 61 years of consecutive dividend growth.
As per Insider Monkey's Q1 2023 database, 61 hedge funds owned stakes in The Coca-Cola Company (NYSE:KO), up from 58 in the preceding quarter. These stakes are collectively valued at over $27.5 billion. Billionaire Warren Buffett's Berkshire Hathaway owned the largest stake in the company, worth $24.8 billion.
Apple Inc. (NASDAQ:AAPL) is one of the world's leading tech companies that manufactures a wide range of accessories and other tech-related equipment. The company's cash position remained strong in the first quarter of 2023, as it generated over $28.6 billion in operating cash flow. It also distributed over $23 billion to shareholders in dividends and share repurchases during the quarter. AAPL is among the most reliable dividend stocks billionaires are loading up on as of Q1, such as Warren Buffett, D. E. Shaw, and Ken Griffin.
On May 4, Apple Inc. (NASDAQ:AAPL) declared a 4.3% hike in its quarterly dividend to $0.24 per share. This marked the company's 11th consecutive year of dividend growth. The stock has a dividend yield of 0.53%, as recorded on June 2. Though Apple Inc. (NASDAQ:AAPL) pays quarterly dividends to shareholders, many companies also offer monthly payments to investors. To know more about this, read 13 Best Monthly Dividend Stocks to Buy.
In addition to AAPL, Walmart Inc. (NYSE:WMT), AbbVie Inc. (NYSE:ABBV), and The Procter & Gamble Company (NYSE:PG) are other reliable dividend stocks popular among billionaire investors.
Canaccord noted that Apple Inc. (NASDAQ:AAPL)'s results in Q1 demonstrate its share gains in the higher-end markets. In view of this, the firm lifted its price target on the stock in May to $185 and kept a Buy rating on the shares.
At the end of Q1 2023, 131 hedge funds tracked by Insider Monkey held stakes in Apple Inc. (NASDAQ:AAPL), worth collectively over $165.2 billion. Warren Buffett and Ken Griffin were some of the company's leading stakeholders in Q1.
“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications, computing, and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives particularly tight engagement with consumers and enterprises, which is fostering the growing purchase of high margin services like music, apps, and Apple Pay. While iPhone sales were down year-over-year (YoY). services revenues grew 7% YoY which was slightly above analyst estimates. Company earnings were also better-than-anticipated due to lower input costs, such as memory chips and cost control initiatives. Aside from production disruptions, negative sentiment had also weighed on shares as investors questioned how an economic slowdown would affect consumer demand for Apple products in 2023. However, management projected an acceleration in earnings for the fiscal first quarter, where they noted that iPhone and services growth should remain strong, along with encouraging impacts around product mix, lower input costs, and continued cost controls.”
