In this article, we discuss 15 best dividend paying stocks to buy now. You can skip our detailed analysis of dividend stocks and their previous performance, and go directly to read 5 Best Dividend Paying Stocks To Buy Now.
Investors have shown a particular interest in dividend stocks over time, primarily because of their ability to generate income. Throughout history, it has been observed that companies characterized by stable and growing dividends tend to yield better returns with lower volatility compared to those that don't distribute dividends. Additionally, investors can enhance their income by reinvesting dividends. A study conducted by Hartford Funds revealed that dating back to 1960, 69% of the total return of the S&P 500 Index can be traced to the impact of reinvested dividends and the compounding effect.
Given the remarkable returns and increasing investor interest, U.S. companies are striving to sustain and expand their dividend payouts. As per the latest findings from S&P Dow Jones Indices, Q4 2023 witnessed 707 instances of dividend increases. The total value of these dividend hikes amounted to $17.5 billion for the quarter, reflecting a rise from the $16.3 billion reported in Q4 2022. The report also highlighted that within the S&P 500, 403 issues, or 80.1%, are currently distributing dividends. This represents an increase from the 401 issues in Q3 2023 and the 399 issues in Q4 2022. Furthermore, among the Dow Jones Industrial Average constituents, 28 out of the 30 companies pay dividends, with an average yield of 2.54% for all issues and 2.72% for those that do distribute dividends.
The positive performance has instilled confidence among analysts, leading them to anticipate a favorable outlook for dividends in 2024. Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, shared insights on the dividend outlook in the firm’s annual report. He said:
“For 2024, the dollar aggregate of dividends is expected to increase once again. Absent an economic or geopolitical event, S&P 500 large caps appear to be weathering volatility better, as the index is expected to post its 15th consecutive year of dividend increases. In addition, the index is also expected to log its 13th consecutive record year, with a 4.5% - 5% increase in payments for 2024, compared to its 5.1% increase in 2023 and its 10.8% increase in 2022. Overall, companies will likely remain cautious in 2024, as they consider both consumer and government spending and also any impact on the political environment."
Microsoft Corporation (NASDAQ:MSFT), Visa Inc. (NYSE:V), and Apple Inc. (NASDAQ:AAPL) are some of the best dividend-paying stocks that have consistently attracted investors' interest throughout the years. These companies, renowned for their strong financial performance and market presence, have become favorites among investors seeking reliable income streams. In this article, we will take a look at some other stocks that pay regular dividends to shareholders.
For this article, we scanned Insider Monkey’s database of 910 hedge funds and picked the top 15 dividend stocks, which means the stocks mentioned in this list are the most popular dividend-paying stocks among hedge funds as of the third quarter of 2023. The stocks mentioned below pay regular dividends to shareholders and have strong financials. The list is ranked in ascending order of the number of hedge funds having stakes in the companies. 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.
Citigroup Inc. (NYSE:C) is a global financial institution that provides a wide range of financial products and services to individuals, businesses, governments, and institutional clients. The company declared a quarterly dividend of $0.53 on January 12, which fell in line with its previous dividend. It is one of the best dividend paying stocks on our list as the company has a 34-year run of paying regular dividends to shareholders. As of January 30, the stock has a dividend yield of 3.92%.
At the end of Q3 2023, 79 hedge funds tracked by Insider Monkey reported having stakes in Citigroup Inc. (NYSE:C), up from 75 in the previous quarter. These stakes are collectively valued at nearly $7 billion. With over 55 million shares, Berkshire Hathaway was the company's leading stakeholder in Q3.
Walmart Inc. (NYSE:WMT) is a multinational retail corporation and one of the world's largest and most successful retailers. The company operates a diverse range of retail formats and provides a wide variety of products and services. It currently offers a quarterly dividend of $0.57 per share and has a dividend yield of 1.38%, as of January 30. The company maintains a 50-year streak of consistent dividend growth, which makes WMT one of the best dividend paying stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in Walmart Inc. (NYSE:WMT) stood at 80 in Q3 2023, down slightly from 81 in the previous quarter. The total value of these investments is nearly $6 billion.
Johnson & Johnson (NYSE:JNJ) is an American multinational healthcare company that is involved in the research, development, and marketing of pharmaceutical products. On January 2, the company announced a quarterly dividend of $1.19 per share, which was consistent with its previous dividend. In 2023, it stretched its dividend growth streak to 61 years, which makes JNJ one of the best dividend paying stocks on our list. The stock's dividend yield on January 30 came in at 2.99%.
Insider Monkey's database of the third quarter of 2023 indicated that 84 funds held stakes in Johnson & Johnson (NYSE:JNJ), compared with 88 in the previous quarter. Their collective stake value is over $4.1 billion. Among these hedge funds, Fisher Asset Management was the company's largest stakeholder in Q3.
Merck & Co., Inc. (NYSE:MRK) is next on our list of the best dividend paying stocks to buy now. The pharmaceutical company pays a quarterly dividend of $0.77 per share, having raised it by 5.5% in November 2023. This marked the company's 12th consecutive year of dividend growth. The stock's dividend yield on January 30 came in at 2.54%.
The number of hedge funds tracked by Insider Monkey owning stakes in Merck & Co., Inc. (NYSE:MRK) grew to 85 in Q3 2023, from 78 in the preceding quarter. The collective value of these stakes is more than $5.06 billion. With over 13.3 million shares, Fisher Asset Management was the company's leading stakeholder in Q3.
Broadcom Inc. (NASDAQ:AVGO) is a global technology company that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. The company serves a diverse set of industries, including networking, storage, broadband, wireless, and industrial. It has been raising its dividends for the past 13 years and currently offers a quarterly dividend of $5.25 per share. With a dividend yield of 1.72%, AVGO is one of the best dividend paying stocks on our list.
Of the 910 hedge funds in Insider Monkey's database, 87 funds held stakes in Broadcom Inc. (NASDAQ:AVGO) in Q3 2023, growing from 78 in the preceding quarter. The stakes owned by these hedge funds have a collective value of nearly $6.2 billion.
Oracle Corporation (NYSE:ORCL) is a global technology company that specializes in providing database management systems, cloud solutions, and enterprise software. The company offers a quarterly dividend of $0.40 per share and has a dividend yield of 1.41%, as of January 30. It is one of the best dividend paying stocks on our list as the company has been growing its dividends for the past eight years.
Insider Monkey's database of Q3 2023 showed that 88 hedge funds owned stakes in Oracle Corporation (NYSE:ORCL), growing from 84 in the previous quarter. The consolidated value of these stakes is more than $4.7 billion.
Oakmark Funds mentioned Oracle Corporation (NYSE:ORCL) in its Q4 2023 investor letter. Here is what the firm has to say:
“We sold the remainder of our long-time holding in Oracle Corporation (NYSE:ORCL) (U.S.) during the quarter. The Fund first purchased shares in the company in 2006, back when it had ambitious plans to integrate all of its enterprise software applications into a simple solution named Fusion. Now Fusion is the perennial market leader, and management’s stewardship has greatly benefitted shareholders. More recently, the company enjoyed successes through its merger with Cerner and the acceleration of its cloud infrastructure business. We exited our position as it approached our estimate of intrinsic value.”
Bank of America Corporation (NYSE:BAC) is one of the largest and most prominent financial institutions in the US, providing a comprehensive range of banking and financial services to individuals, businesses, and institutional clients. It has been paying regular dividends to shareholders for the past 24 years and currently pays a quarterly dividend of $0.24 per share. The stock has a dividend yield of 2.86%, as of January 30.
At the end of September 2023, 88 hedge funds in Insider Monkey’s database owned stakes in Bank of America Corporation (NYSE:BAC), compared with 90 in the previous quarter. These stakes have a total value of more than $31.3 billion.
Union Pacific Corporation (NYSE:UNP) is one of the largest and oldest Class I railroad companies in the US. The company operates an extensive network of railroads that play a crucial role in transporting freight across North America. The company currently pays a quarterly dividend of $1.30 per share and has a dividend yield of 2.12%, as of January 30. With a dividend growth streak of 16 consecutive years, UNP is one of the best dividend paying stocks on our list.
The number of hedge funds having stakes in Union Pacific Corporation (NYSE:UNP) grew to 90 in Q3 2023, from 87 in the previous quarter. The consolidated value of these stakes is over $5.4 billion.
An American global pharmaceutical company, Eli Lilly and Company (NYSE:LLY) is next on our list of the best dividend paying stocks. In December 2023, the company achieved its 10th consecutive annual dividend increase. The company currently pays a quarterly dividend of $1.30 per share and has a dividend yield of 0.81%, as of January 30.
At the end of Q3 2023, 102 hedge funds tracked by Insider Monkey reported having stakes in Eli Lilly and Company (NYSE:LLY), growing from 87 in the preceding quarter. The collective value of these stakes is over $9 billion.
UnitedHealth Group Incorporated (NYSE:UNH) ranks sixth on our list of the best dividend paying stocks to buy now. The diversified healthcare company raised its dividends for the past 13 consecutive years and it offers a quarterly dividend of $1.88 per share. As of January 30, the stock has a dividend yield of 1.49%.
UnitedHealth Group Incorporated (NYSE:UNH) was included in 104 hedge fund portfolios at the end of Q3 2023, according to Insider Monkey’s database. The stakes owned by these funds have a total value of roughly $11 billion.
