In this article, we discuss 11 best dividend stocks on Robinhood. You can skip our detailed analysis of retail investing and the past performance of dividend stocks, and go directly to read5 Best Dividend Stocks on Robinhood.
Robinhood Markets, a commission-free investment platform, gained prominence through a combination of innovative features and a user-friendly interface that appealed to a younger, tech-savvy demographic. These new investors use non-traditional approaches, searching for advice on social media, talking about their stock choices on forums like Reddit's WallStreetBets, and are willing to accept the possibility of significant losses if it helps them acquire valuable skills. However, institutional investors are also not ignoring this online trading frenzy. A study by Brunswick Group revealed that the connection between institutional and retail investors goes beyond Reddit. In fact, Robinhood Snacks was identified as the most subscribed-to newsletter among the institutional investors they surveyed earlier in January 2023, indicating that traditional financial players are closely monitoring these developments.
In recent years, we've witnessed a significant surge in retail investing, particularly accelerated by the COVID-19 pandemic. The rise of retail investing represents a shift towards financial independence and a desire to take control of one's financial future, particularly among younger generations who are tech-savvy and have embraced these new opportunities. According to the quarterly Modern Investor Pulse by Finimize Business, American retail investors are displaying a strong bullish sentiment. A substantial 84% of the respondents expressed their intention to invest the same amount or even more compared to the previous quarter, and two-thirds believed that equities would experience an upswing in the coming year. This poll, which involved 1,453 U.S.-based participants out of 4,088 retail investors surveyed globally, was conducted between September 13 and September 15. The survey also highlighted that nearly three out of four American retail investors are considering taking equal or greater risks with their investments in the upcoming three months. Of these, 60% plan to invest in individual stocks, while 40% are looking to allocate their funds to exchange-traded funds (ETFs).
While retail investors continue to show a strong inclination for risks, they are increasingly drawn to income-generating stocks that offer safety and stability. Dividend-paying stocks have emerged as a dependable option for generating consistent income during periods of financial uncertainty. This income can supplement an investor's cash flow, making it easier to cover expenses or reinvest in the market. This is evident when examining historical data, where dividends have been a crucial factor in investors' returns over the last half-century. Looking at the period since 1960, a remarkable 69% of the S&P 500 Index's total returns can be attributed to the reinvestment of dividends and the remarkable effect of compounding.
The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some of the best dividend stocks to buy as these companies hold decades-long track records of dividend growth. In this article, we will further the best dividend stocks on Robinhood.
11 Best Dividend Stocks on Robinhood
Photo by nick chong on Unsplash
Our Methodology:
For this article, we performed an extensive analysis of leading financial websites to identify 11 dividend stocks available on Robinhood. Our selection process was based on a consensus approach, where we considered only those stocks that consistently appeared across multiple sources during our research. The stocks are ranked in ascending order of the number of hedge funds having stakes in them, according to Insider Monkey's database of Q2 2023.
Realty Income Corporation (NYSE:O) is an American real estate investment trust that primarily focuses on owning and managing retail and commercial properties. In its recently announced third-quarter earnings, the company posted revenue of $1.04 billion, which showed a 24.2% growth from the same period last year. The company ended the quarter with over $344 million available in cash and cash equivalents.
Realty Income Corporation (NYSE:O) holds a strong dividend-paying record. The company has paid regular dividends to shareholders for 640 consecutive months and also maintains a 29-year streak of raising its dividends. The company offers a monthly dividend of $0.256 per share and has a dividend yield of 6.06%, as of November 7.
At the end of Q2 2023, 24 hedge funds in Insider Monkey's database reported having stakes in Realty Income Corporation (NYSE:O), up from 22 in the preceding quarter. The consolidated value of these stakes is more than $243.6 million.
Nucor Corporation (NYSE:NUE) is among the best dividend stocks popular on Robinhood. The leading American steel and steel products manufacturer is involved in various aspects of the industry, including the production of raw steel, steel products, and steel recycling.
Nucor Corporation (NYSE:NUE) is a Dividend King, having raised its dividends for 50 consecutive years. The company pays a quarterly dividend of $0.51 per share and has a dividend yield of 1.35%, as recorded on November 7.
As of the close of Q2 2023, 38 hedge funds, compared with 39 in the previous quarter, owned investments in Nucor Corporation (NYSE:NUE), according to Insider Monkey's database. The collective value of these stakes is over $563.5 million. With over 1.5 million shares, Citadel Investment Group was the company's leading stakeholder in Q2.
Ford Motor Company (NYSE:F) is a Michigan-based automotive manufacturer. The company is primarily engaged in the design, manufacturing, and marketing of automobiles and commercial vehicles. Though the company's revenue of $41.18 billion in the third quarter missed analysts' consensus by $1.33 billion, it still saw a 10.7% growth from the same period last year. In the first nine months of the year, the company's operating cash flow also jumped to $12.4 billion, from $5.6 billion in the prior-year period.
Ford Motor Company (NYSE:F) has been making regular dividend payments to shareholders since 2012. It currently pays a quarterly dividend of $0.15 per share and has a dividend yield of 5.90%, as of November 7.
The number of hedge funds in Insider Monkey's database owning stakes in Ford Motor Company (NYSE:F) grew to 40 in Q2 2023, from 38 in the previous quarter. The collective value of these stakes is over $895.5 million.
Altria Group, Inc. (NYSE:MO) is a major American corporation that operates primarily in the tobacco and related industries. The company also manufactures and markets a variety of smokeless tobacco products, which are consumed without being burned.
Altria Group, Inc. (NYSE:MO) offers a quarterly dividend of $0.98 per share, after raising it by 4.3% in August this year. Through this hike, the company took its dividend growth streak to 54 years, which makes MO one of the best dividend stocks on our list. As of November 7, the stock has a dividend yield of 9.68%.
Altria Group, Inc. (NYSE:MO) was a part of 43 hedge fund portfolios at the end of Q2 2023, compared with 49 in the preceding quarter, as per Insider Monkey's data. The stakes owned by these hedge funds have a total value of more than $446.2 million. Among these hedge funds, Harris Associates was the company's leading stakeholder in Q2.
International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 51
International Business Machines Corporation (NYSE:IBM) is a multinational technology and consulting company with a diverse range of business activities. Its operations encompass various sectors, and the company has a long history of innovation and technological contributions.
On October 30, International Business Machines Corporation (NYSE:IBM) declared a quarterly dividend of $1.66 per share, which fell in line with its previous dividend. Overall, the company holds a 28-year streak of consistent dividend growth, which makes IBM one of the best dividend stocks on Robinhood. The stock's dividend yield on November 7 came in at 4.46%.
As of the end of the second quarter of 2023, 51 hedge funds tracked by Insider Monkey owned stakes in International Business Machines Corporation (NYSE:IBM), growing from 49 in the previous quarter. These stakes are collectively valued at roughly $814 million.
Verizon Communications Inc. (NYSE:VZ) ranks sixth on our list of the best dividend stocks on Robinhood. The company was included in 53 hedge fund portfolios at the end of Q2 2023, down from 59 in the preceding quarter, according to Insider Monkey's database. The stakes owned by these hedge funds are collectively worth nearly $829 million.
Verizon Communications Inc. (NYSE:VZ) is one of the largest telecommunications companies in the US, offering a wide range of services in the telecommunications and technology sectors. The company has been raising its dividends for 17 years running and currently pays a quarterly dividend of $0.665 per share. The stock has a dividend yield of 7.40%, as of November 7.
Ariel Investments mentioned Verizon Communications Inc. (NYSE:VZ) in its Q3 2023 investor letter. Here is what the firm has to say:
“Global communications and technology leader, Verizon Communications Inc. (NYSE:VZ), also weighed on performance in the period on mixed earnings results. Consolidated revenues came in slightly below expectations, EBITDA was in-line and management reiterated full year 2023 guidance. Although share price action has been weak, we find the company valuation to be compelling and the approximately 7% dividend yield to be both stable and secure. We view Verizon as one of the best positioned telecoms in the world. Looking forward, we expect the free cash flow to grow significantly in the years ahead as Verizon moves past the secular peak in 5G capital spending.”
