In this article, we discuss 12 best Dow Jones dividend stocks according to hedge funds. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read 5 Best Dow Jones Dividend Stocks According to Hedge Funds.
The Dow Jones Industrial Average, often simply referred to as the Dow, is one of the most well-known and widely followed stock market indices in the US and around the world. The index tracks the performance of 30 companies that are publicly traded on US stock exchanges. These 30 companies come from various industries, making the index a diverse reflection of the stock market. Since the start of 2023, the index has declined by 0.25%, underperforming the S&P 500, which has gained 9.55% this year so far.
The Dow's performance has been hurt mainly due to the ongoing Israel-Hamas conflict. In the US, the bond market was closed on the first trading day after the conflict began due to the observance of Indigenous Peoples' Day. However, when it reopened, investors turned to bonds as a safe-haven investment to shield their portfolios from geopolitical risks. Currently, the financial outlook is not optimistic. The S&P 500 is heading for its third straight month of losses, and the Dow has lost all its gains for the year. According to investors, those declines could continue if the war escalates or the economy begins to buckle under the pressure of rate hikes over the next few months.
That said, it's worth noting that the Dow hasn't always shown unstable performance. There have been times in the past when it outperformed the tech-heavy NASDAQ. This is particularly important to keep in mind because tech stocks have been the center of attention this year. In our article titled 12 Highest Yielding Dow Jones Dividend Stocks, we referred to data from Barron’s and highlighted that in 1978, 1980, and 1992, the Dow performed better than the Nasdaq by a margin of at least seven percentage points. The most notable period of Dow's outperformance happened during the bursting of the dot-com bubble, with a total of 12 instances between 1999 and 2002.
When looking at the long-term performance of the S&P 500 and the Dow, it is noticeable that they have generally shown similar performance trends. According to CNBC's calculations, over the last 15 years, the S&P and Dow have moved in the same direction 94% of the time. Due to its emphasis on stable, dividend-paying companies, often referred to as "blue chip" stocks, the Dow has historically shown greater resilience during market downturns compared to other stock market indexes. In 2022, for example, the Dow only experienced a 7% decrease, whereas the S&P 500 saw a nearly 19% decline, and the Nasdaq dropped by 32%. Additionally, the Dow's average dividend yield stands at 1.89%, surpassing the yields of the other two indexes.
Microsoft Corporation (NASDAQ:MSFT), Visa Inc. (NYSE:V), and Apple Inc. (NASDAQ:AAPL) are some of the best dividend stocks in the Dow. In this article, we will further discuss Dow Jones dividend stocks according to hedge funds.
12 Best Dow Jones Dividend Stocks According to Hedge Funds
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Our Methodology:
For this list, we started with the 30 stocks in the Dow Jones Industrial Average and selected dividend-paying stocks from that group. We then narrowed it down to 12 dividend stocks with the most hedge fund investors. The stocks are ranked in ascending order of the hedge funds having stakes in them, as per Insider Monkey's database of Q2 2023.
McDonald's Corporation (NYSE:MCD) is an American multinational fast-food chain. On October 5, the company announced a 5% growth in its quarterly dividend to $1.67 per share. This marked the company's 47th consecutive year of dividend growth, which makes MCD one of the best dividend stocks on our list. The stock has a dividend yield of 2.59%, as of October 25.
At the end of Q2 2023, 68 hedge funds in Insider Monkey's database reported having stakes in McDonald's Corporation (NYSE:MCD), growing from 64 in the previous quarter. The consolidated value of these stakes is over $4.2 billion.
NIKE, Inc. (NYSE:NKE) is a global sportswear and athletic footwear company known for its wide range of athletic and casual footwear, apparel, equipment, and accessories. In its fiscal Q1 2024, the company reported revenue of roughly $13 billion, which saw a 2% growth from the same period last year. During the quarter, the company returned $1.7 billion to shareholders, including $524 million in dividends.
NIKE, Inc. (NYSE:NKE), one of the best dividend stocks on our list, has been growing its dividends for 21 consecutive years. The company currently pays a quarterly dividend of $0.34 per share and has a dividend yield of 1.31%, as of October 25.
As of the end of Q2 2023, 70 hedge funds in Insider Monkey's database owned investments in NIKE, Inc. (NYSE:NKE). The collective value of stakes owned by these funds is over $2.4 billion. With over 6.7 million shares, Fundsmith LLP was the company's leading stakeholder in Q2.
Intel Corporation (NASDAQ:INTC) is a California-based technology company that primarily operates in the semiconductor industry. The company designs and produces microprocessors (CPUs), chipsets, and other integrated circuits for a wide range of computing and communication devices.
Intel Corporation (NASDAQ:INTC) pays a quarterly dividend of $0.125 per share and has a dividend yield of 1.52%, as of October 25. Though the company has recently slashed its dividend, it has been regularly paying dividends to shareholders since 1992.
The number of hedge funds tracked by Insider Monkey owning stakes in Intel Corporation (NASDAQ:INTC) grew to 71 in Q2 2023, from 68 a quarter earlier. The total worth of these stakes is over $2.5 billion.
American Express Company (NYSE:AXP) is next on our list of the best dividend stocks to buy. In the third quarter of 2023, the company reported revenue of $15.3 billion, up 13.4% from the same quarter last year. The company's network volumes rose to $420 billion during the quarter, showing a 6.5% growth from the prior-year period.
American Express Company (NYSE:AXP) is a global financial services company that provides a range of financial products and services to individuals, businesses, and institutions. The company has a 34-year run of paying regular dividends to shareholders, which makes it one of the best dividend stocks on our list. It currently pays a quarterly dividend of $0.60 per share and has a dividend yield of 1.67%, as of October 25.
At the end of the June quarter of 2023, 73 hedge funds tracked by Insider Monkey owned stakes in American Express Company (NYSE:AXP), down from 77 in the previous quarter. Their collective stake value is more than $28 billion. Warren Buffett's Berkshire Hathaway was the company's leading stakeholder in Q2.
The Procter & Gamble Company (NYSE:PG) is an American multinational consumer goods company. The company was included in 74 hedge fund portfolios at the end of Q2 2023, as per Insider Monkey's database. The total value of stakes owned by these hedge funds is over $5.3 billion. In comparison, 75 elite funds held stakes in the company in the previous quarter.
The Procter & Gamble Company (NYSE:PG) is one of the best dividend stocks on our list as the company holds a 67-year streak of consistent dividend growth. It currently pays a quarterly dividend of $0.9407 per share and has a dividend yield of 2.50%, as of October 25.
The Procter & Gamble Company (NYSE:PG) announced its fiscal Q1 2024 earnings on October 18 and showed strong results. The company's revenue for the quarter came in at $21.8 billion, which not only showed a 6% year-over-year growth but also beat analysts' consensus by $290 million. Its operating cash flow for the quarter jumped to $4.9 billion, from $4 billion in the prior-year period.
Merck & Co., Inc. (NYSE:MRK) is a global pharmaceutical company that specializes in the research, development, manufacturing, and marketing of a wide range of pharmaceutical products and vaccines. The company offers a quarterly dividend of $0.73 per share and has been growing its dividends for 11 consecutive years. With a dividend yield of 2.82%, as of October 25, MRK is one of the best dividend stocks on our list.
Of the 910 hedge funds in Insider Monkey's database at the end of Q2 2023, 78 hedge funds, up from 75 in the previous quarter, owned stakes in Merck & Co., Inc. (NYSE:MRK). These stakes are collectively worth over $2.65 billion. AQR Capital Management was the company's largest stakeholder in Q2.
Walmart Inc. (NYSE:WMT) ranks sixth on our list of the best dividend stocks. The American multinational retail company pays a quarterly dividend of $0.57 per share and has a dividend yield of 1.40%, as recorded on October 25. The company's dividend growth streak currently stands at 50 years.
According to our database of Q2 2023, 81 hedge funds owned stakes in Walmart Inc. (NYSE:WMT), with a total value of more than $5.4 billion. Among these hedge funds, D E Shaw was the company's leading shareholder in Q2.
