In this article, we discuss 15 best S&P 500 dividend stocks to buy now. You can skip our detailed analysis of dividend stocks in the S&P 500 and their past performance, and go directly to read 5 Best S&P 500 Dividend Stocks To Buy Now.
It’s been a dynamic first quarter for the stock market. The S&P 500, one of the leading stock indexes in the world, gained 10.2% in the first three months of 2024, achieving its best first-quarter performance in five years. The impressive performance sparked greater interest among investors in the stock market. In March, investors poured roughly $50 billion into funds focused on purchasing stocks in the US, as reported by EPFR Global Data. That said, it is important to bear in mind that it is the bigger companies that are driving the market upward, especially those that are attentive to the ongoing artificial intelligence wave. The ‘Magnificent Seven’ accounted for 40% of the market’s overall gains in the first three months, according to data by S&P Dow Jones Indices. Meta’s remarkable returns of over 40% during the period were massively driven by the company’s announcement of its first-ever dividend earlier this year.
Dividends play an important role in the investment landscape, with approximately 80% of the companies in the S&P 500 paying dividends to shareholders. However, consistently increasing payouts is a challenging feat. In fact, just 13% of the companies in the index are included in the S&P 500 Dividend Aristocrats Index, an elite group that tracks the performance of companies growing their dividends for at least 25 consecutive years. Investors also favor dividend growth stocks due to their strong performance over the years, particularly during periods of high interest rates. In our article titled 25 Things Every Dividend Investor Should Know, we cited Abrdn’s data and reported that from December 2002 to December 2022, dividend growers and initiators delivered a compounded return of 10.68%, compared with a 2.70% return of dividend cutters and eliminators. We also mentioned that non-dividend payers also underperformed dividend growers during this period, returning 9.25%. The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and Colgate-Palmolive Company (NYSE:CL) are some of the best dividend stocks that have consistently raised their dividends over the years.
The combination of dividend growth and high yields presents investors with strong investment opportunities. S&P 500 High Dividend Growth Index, which tracks the performance of companies that have raised their dividends for five consecutive years with an average dividend yield of 3%, has delivered an annualized return of 11.94% from 2010 to 2022, according to a report by S&P Dow Jones Indices. The report also mentioned that during this period, the index grew its dividend at an annual average rate of 13.8%, exceeding the US long-term inflation rate.
In this, we will discuss some of the best dividend stocks in the S&P 500.
For this list, we scanned the list of the S&P 500 companies and picked dividend stocks with dividend yields above 2%, as of May 7. From that list, we picked 15 dividend stocks with the highest number of hedge fund investors, according to Insider Monkey’s database of 933 hedge funds, as of Q4 2023. The stocks are ranked in ascending order of the number of hedge funds having stakes in them. 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).
In addition to covering topics like the best S&P 500 dividend stocks to buy, at Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, artificial intelligence technology is on the cusp of earth-shattering breakthroughs, so we identified the cheapest AI stock that is trading at less than 5 times its market value excluding cash and investments with the potential to deliver 100x returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now, let's take a look at the 15 best S&P 500 dividend stocks to buy according to analysts.
The Goldman Sachs Group, Inc. (NYSE:GS) is an American investment banking company that provides related services to individuals, businesses, and financial institutions. The company remained committed to its shareholder obligation in the first quarter of 2024 as it returned approximately $929 million to investors through dividends. The company pays a quarterly dividend of $2.75 per share and has a dividend yield of 2.48%, as recorded on May 7. It is among the best dividend stocks in the S&P 500.
At the end of Q4 2023, 69 hedge funds tracked by Insider Monkey held stakes in The Goldman Sachs Group, Inc. (NYSE:GS), up from 68 in the previous quarter. These stakes have a total value of over $6.33 billion. Among these hedge funds, Fisher Asset Management was the company's leading stakeholder in Q4.
Amgen Inc. (NASDAQ:AMGN) is a multinational biotech company that specializes in the manufacturing of innovative therapies. On March 6, the company declared a quarterly dividend of $2.25 per share, which was in line with its previous dividend. Overall, it has been growing its dividends for the past 11 consecutive years, which makes AMGN one of the best dividend stocks on our list. The stock has a dividend yield of 3.01%, as of May 7.
The number of hedge funds tracked by Insider Monkey owning stakes in Amgen Inc. (NASDAQ:AMGN) grew to 69 in Q4 2023, from 60 in the previous quarter. The consolidated value of these stakes is nearly $1.8 billion.
The Home Depot, Inc. (NYSE:HD) is a Georgia-based home improvement company that sells related tools and products to its consumers. The company's cash position remained strong in FY23 as it generated over $21 billion in operating cash flow. It also returned $8.3 billion to shareholders through dividends during this period.
The Home Depot, Inc. (NYSE:HD), one of the best dividend stocks, has been raising its dividends consistently for the past 14 years. Moreover, it has never missed a dividend in 148 quarters. Currently, it pays a quarterly dividend of $2.25 per share for a dividend yield of 2.63%, as of May 7.
As of the close of Q4 2023, 70 hedge funds in Insider Monkey's database held stakes in The Home Depot, Inc. (NYSE:HD), down from 76 in the previous quarter. These stakes have a total value of roughly $6 billion. With over 8.7 million shares, Fisher Asset Management was the company's leading stakeholder in Q4.
An American multinational consumer goods manufacturing company, The Procter & Gamble Company (NYSE:PG) is next on our list of the best dividend stocks in the S&P 500. The company has been growing its dividends for the past 68 years and offers a quarterly dividend of $1.0065 per share. As of May 7, the stock has a dividend yield of 2.45%.
In the first quarter of 2024, The Procter & Gamble Company (NYSE:PG) reported an operating cash flow of $4.1 billion and its adjusted free cash flow productivity was 87%. During the quarter, the company returned approximately $3.3 billion to shareholders, including $2.3 billion in dividends.
The Procter & Gamble Company (NYSE:PG) was a part of 71 hedge fund portfolios, compared with 75 in the previous quarter, as per Insider Monkey's database. The stakes held by these hedge funds have a consolidated value of nearly $6 billion.
Chevron Corporation (NYSE:CVX) is a California-based petroleum refinery company. At the end of Q4 2023, Warren Buffett's Berkshire Hathaway was the largest stakeholder in the company, owning over 126 million shares. Overall, 71 hedge funds in Insider Monkey's database held stakes in the company in Q4, with a collective value of more than $21.6 billion.
In the first quarter of 2024, Chevron Corporation (NYSE:CVX) paid nearly $3 billion in dividends to shareholders, which makes CVX one of the best dividend stocks in the S&P 500. Moreover, the company maintains a 37-year streak of consistent dividend growth. It offers a quarterly dividend of $1.63 per share and has a dividend yield of 4.02%, as of May 7.
Wells Fargo & Company (NYSE:WFC) is an American multinational financial services company that offers a wide range of services in banking, mortgages, loans, and credit cards. It is one of the best dividend stocks on our list as the company has been paying regular dividends to shareholders since 1988. Its current quarterly dividend comes in at $0.35 per share for a dividend yield of 2.33%, as of May 7.
Insider Monkey's database of Q4 2023 indicated that 72 hedge funds held stakes in Wells Fargo & Company (NYSE:WFC), down from 77 in the previous quarter. These stakes are worth over $5.5 billion in total. With more than 23 million shares, Harris Associates was the company's leading stakeholder in Q4.
AbbVie Inc. (NYSE:ABBV) is an Illinois-based pharmaceutical company that specializes in drug and treatment discovery. The company offers a quarterly dividend of $1.55 per share and has a dividend yield of 3.81%, as of May 7. With a dividend growth streak of 51 years, ABBV is one of the best dividend stocks on our list.
According to Insider Monkey's database of Q4 2023, 76 hedge funds held stakes in AbbVie Inc. (NYSE:ABBV), up from 73 in the previous quarter. These stakes are valued at over $3.5 billion in total.
A global pharmaceutical company, Pfizer Inc. (NYSE:PFE) is engaged in the development and research of medicines and consumer health products. On April 24, the company declared a quarterly dividend of $0.42 per share, which fell in line with its previous dividend. Its dividend growth streak currently spans over 14 years, which makes PFE one of the best dividend stocks in the S&P 500. The stock's dividend yield on May 7 came in at 5.97%.
Pfizer Inc. (NYSE:PFE) was a popular stock among hedge funds at the end of Q4 2023, with hedge fund positions jumping to 79, from 73 in the preceding quarter, as per Insider Monkey's database. These stakes have a total value of more than $2.2 billion.
Johnson & Johnson (NYSE:JNJ) is an American consumer health company that specializes in related products and different pharmaceuticals. The company declared a 4% hike in its quarterly dividend to $1.24 per share on April 16. This marked the company's 62nd consecutive annual dividend hike, which places JNJ on our list of the best dividend stocks in the S&P 500. As of May 7, the stock has a dividend yield of 3.34%.
At the end of December 2023, 81 hedge funds in Insider Monkey's database owned stakes in Johnson & Johnson (NYSE:JNJ), down from 84 in the previous quarter. These stakes are worth nearly $4 billion. Ken Fisher's Fisher Asset Management was the company's leading stakeholder in Q4.
An American natural gas and energy company, Exxon Mobil Corporation (NYSE:XOM) ranks sixth on our list of the best dividend stocks in the S&P 500. The company declared a quarterly dividend of $0.95 per share on April 25, which was consistent with its previous dividend. It has never missed a dividend payment since 1882 and has raised its payouts consistently for the past 41 years. The stock has a dividend yield of 3.25%, as of May 7.
At the end of the fourth quarter of 2024, 85 hedge funds held stakes in Exxon Mobil Corporation (NYSE:XOM), growing from 79 in the previous quarter, as per Insider Monkey's database. These stakes are collectively valued at over $4.47 billion.
