In this article, we discuss 16 most promising dividend stocks according to analysts. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Most Promising Dividend Stocks According to Analysts.
This year brought a notable shift in the investment scene, where technology stocks surged ahead, overshadowing the performance of dividend-focused equities. Despite this change, experts advise that investors diversify their portfolios across various asset classes to navigate diverse market situations effectively. This strategy aims to ensure resilience against fluctuations and uncertainties in the market, emphasizing the importance of a well-rounded investment approach that goes beyond focusing solely on one sector or type of stock. Art Hogan, the chief market strategist at B. Riley Wealth, shared insights on investment strategies in an interview with Bloomberg. Here are some comments from the analyst:
“It’s clear that having a diversified portfolio is probably the best way to navigate the investment climate and the best way to do that is owning the S&P 500 — full stop. If you were to start this year by saying ‘everyone says there’s a recession coming so I’m going to invest defensively,’ you got punched in the nose.”
Dividend stocks faced challenges this year, yet these equities have retained their status as investor favorites over the years due to the exceptional returns they consistently generate. When investing in dividend stocks, investors pay special attention to companies that have raised their dividends for years. This long-standing history of raising dividends signifies stability, financial health, and a commitment to sharing profits with shareholders. The S&P 500 High Dividend Growth Index monitors companies that have consistently increased their dividends for at least 5 years and are expected to continue this trend in the upcoming year. This index has outperformed the S&P 500 since 2010, according to a report by S&P Dow Jones Indices. Despite the S&P 500 showing strong performance during this time, the High Dividend Growth Index has not only matched but exceeded it. Over the period from 2010, it has shown an average yearly return of 11.94%, while also offering a notably higher yield compared to the broader market. In addition to this, the S&P 500 High Dividend Growth Index increased its dividend annually by 13.8% between 2010 and 2022. This growth rate surpasses the long-term inflation rate in the US, even considering the recent rise in inflation observed over the last few years.
A growing flow of dividends brings unique advantages that might be rare in other investment plans. Firstly, robust dividend growth can boost returns and act as a defense against inflation, similar to an annual salary increase. Companies increasing dividends often see their stock prices rise too. This is because stocks typically follow a company's improving earnings and dividends. In addition to this, reinvesting these increasing dividends speeds up how quickly your investment grows over time through compounding. According to a report by T. Rowe Price, from the end of 1985 to the end of 2022, the stocks in the Russell 1000 Index that consistently increased their dividends showed better performance compared to the broader benchmark. Additionally, these dividend-growing stocks demonstrated lower fluctuations or volatility in their performance during this period.
Some of the best dividend growth stocks include Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV) as these companies boast a long-standing history of consistently increasing their dividends over many years, making them sought-after choices for those seeking reliable and growing income from their investments. In this article, we will further discuss some of the most promising stocks that pay dividends.
16 Most Promising Dividend Stocks According to Analysts
To compile this article, we first scanned a list of stocks known for their consistent dividend track records and sustained shareholder payouts over an extended period. This group reflects stability and long-term performance in dividend payouts. From this list, we further refined our selection criteria by identifying stocks with a projected upside potential of over 20% based on analyst price targets. The stocks are ranked according to their upside potential, as of December 20.
Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm. 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.
Albemarle Corporation (NYSE:ALB) is a global specialty chemicals company that focuses on developing, manufacturing, and marketing a wide range of chemical products. The company offers a quarterly dividend of $0.40 per share and has a dividend yield of 1.07%, as of December 24. It is one of the most promising stocks on our list as the company has been growing its dividends for the past 29 years.
At the end of Q3 2023, 37 hedge funds tracked by Insider Monkey reported having stakes in Albemarle Corporation (NYSE:ALB), compared with 41 in the preceding quarter. The overall value of these stakes is more than $274.3 million. Among these hedge funds, Coatue Management was the company's leading stakeholder in Q3.
Cheniere Energy, Inc. (NYSE:LNG) is a leading energy company primarily involved in liquefied natural gas infrastructure, production, and marketing. The company started paying dividends in 2021 and has raised its payouts two times since then. It currently pays a quarterly dividend of $0.435 per share and has a dividend yield of 1.01%, as of December 24.
As of the close of Q3 2023, 58 hedge funds in Insider Monkey's database reported having stakes in Cheniere Energy, Inc. (NYSE:LNG), compared with 60 a quarter earlier. These stakes are collectively valued at over $1.45 billion.
Brookfield Infrastructure Partners L.P. (NYSE:BIP) is a global infrastructure company that owns and operates various infrastructure assets across different sectors worldwide. It is one of the most promising stocks on our list as the company has been rewarding shareholders with growing dividends for the past 15 years. The company offers a quarterly dividend of $0.3825 per share and has a dividend yield of 4.83%, as recorded on December 24.
At the end of September 2023, 17 hedge funds in Insider Monkey's database owned stakes in Brookfield Infrastructure Partners L.P. (NYSE:BIP), growing from 11 in the previous quarter. These stakes have a total value of more than $115.7 million. Select Equity Group was the largest stakeholder of the company in Q3.
British American Tobacco p.l.c. (NYSE:BTI) is a London-based multinational tobacco company engaged in the manufacturing, distribution, and sale of tobacco and nicotine-related products. On December 20, the company declared a quarterly dividend of $0.7006 per share, which was in line with its previous dividend. The company has a 25-year run of paying uninterrupted dividend payments to shareholders, which makes BTI one of the most promising stocks on our list. As of December 24, the stock has a dividend yield of 9.86%.
According to Insider Monkey's database of Q3 2023, 17 hedge funds owned investments in British American Tobacco p.l.c. (NYSE:BTI), worth collectively nearly $330 million.
AstraZeneca PLC (NASDAQ:AZN) is a biopharmaceutical company primarily focused on the discovery, development, manufacturing, and marketing of prescription medicines. The company offers an interim dividend of $0.93 per share and has a dividend yield of 2.25%, as of December 24. In the most recent quarter, it returned $4.5 billion to shareholders through dividends, which makes AZN one of the most promising stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in AstraZeneca PLC (NASDAQ:AZN) jumped to 49 in Q3 2023, from 41 in the previous quarter. The overall value of these stakes is more than $2.64 billion. With over 14 million shares, GQG Partners was the company's leading stakeholder in Q3.
AT&T Inc. (NYSE:T) is a multinational telecommunications conglomerate with diversified operations in various segments of the communications and media industry. It is one of the most promising stocks on our list as the company has been making uninterrupted dividend payments to shareholders since 1995. On December 13, the company announced a quarterly dividend of $0.2775 per share, which was consistent with its previous dividend. The stock's dividend yield on December 24 came in at 6.71%.
As of the end of Q3 2023, 52 hedge funds in Insider Monkey's database reported having stakes in AT&T Inc. (NYSE:T), compared with 56 in the preceding quarter. The total value of these stakes is over $1.7 billion.
The Cigna Group (NYSE:CI) is an American health services organization that provides a wide range of healthcare, insurance, and wellness solutions. The company pays a quarterly dividend of $1.23 per share, having raised it by 10% in 2023. It has been growing its dividends for the past three years, which makes CI one of the most promising stocks on our list. The stock has a dividend yield of 1.65%, as of December 24.
Insider Monkey's database of Q3 2023 showed that 74 hedge funds owned stakes in The Cigna Group (NYSE:CI), which remained unchanged from the previous quarter. The consolidated value of these stakes is over $2.84 billion. With over 1.5 million shares, Glenview Capital was the company's leading stakeholder in Q3.
Devon Energy Corporation (NYSE:DVN) is an independent energy company engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids. The company’s current quarterly dividend comes in at $0.77 per share and has a dividend yield of 6.19%, as of December 24.
The number of hedge funds in Insider Monkey's database owning stakes in Devon Energy Corporation (NYSE:DVN) grew to 52 in Q3 2023, from 45 in the preceding quarter. The collective value of these stakes is more than $863.8 million.
FedEx Corporation (NYSE:FDX) is an American courier delivery services company that provides a broad range of transportation, e-commerce, and business services. It is one of the most promising stocks on our list as the company has been raising its dividends for the past three years. The company offers a quarterly dividend of $1.26 per share and has a dividend yield of 2.00%, as of December 24.
As of the end of the third quarter of 2023, 67 hedge funds tracked by Insider Monkey reported owning stakes in FedEx Corporation (NYSE:FDX), growing from 62 in the previous quarter. The consolidated value of these stakes is roughly $3 billion.
An American multinational energy company, Exxon Mobil Corporation (NYSE:XOM) is next on our list of the most promising stocks. The company's dividend growth streak spans over 41 years and it offers a quarterly dividend of $0.95 per share. As of December 24, the stock has a dividend yield of 3.70%.
At the end of September 2023, 79 hedge funds owned stakes in Exxon Mobil Corporation (NYSE:XOM), up from 71 in the previous quarter, according to Insider Monkey's database. These stakes are collectively valued at over $4.5 billion.
Nutrien Ltd. (NYSE:NTR) is a global agricultural company that primarily operates in the production and distribution of crop nutrients, agricultural supplies, and services. On November 1, the company declared a quarterly dividend of $0.53 per share, which was consistent with its previous dividend. The company maintains a four-year streak of consistent dividend growth, which makes NTR one of the most promising stocks on our list. The stock's dividend yield on December 24 came in at 3.88%.
According to Insider Monkey's database of Q3 2023, 33 hedge funds held investments in Nutrien Ltd. (NYSE:NTR), up from 31 in the preceding quarter. The collective value of stakes owned by these hedge funds is over $526.3 million. Among these hedge funds, First Eagle Investment Management was the company's leading stakeholder in Q3.
