In this article, we discuss 26 best stocks for dividends. You can skip our detailed analysis of dividend stocks and their previous performance, and go directly to read 10 Best Stocks For Dividends.
As we near the close of 2023, investors are actively diversifying their portfolios by exploring various investment strategies. One noticeable trend this year has been the divergence in performance among different asset classes. While dividend stocks might not have kept pace with some of the more rapid-growth investments in recent months, their historical track record of stability and consistent returns remain a compelling factor for many investors. Over the years, dividends have played a big role in boosting overall investment gains, especially when people reinvest the money they receive from them. Since 1970, around 70% or more of the total profits from global stocks have come from compounded dividends.
Despite a lackluster performance in the current year, analysts hold an optimistic view regarding the prospects of dividend stocks. Ryan Lewenza, a senior vice president and portfolio manager at Turner Investments of Raymond James, discussed with BNN Bloomberg his preferred dividend sectors amidst the challenges posed by recent fluctuations in interest rates. He said that dividend stocks usually perform well during periods of low-interest rates. So, if those interest rates are to come down, then these beaten-up dividend stocks should start to rally. He further said that the telecom and the bank sectors currently have some of the best dividend stocks, offering juicy yields. In addition to this, dividend stocks are attractively valued in this environment. Here are some comments from the analyst:
“The Dow Jones Dividend Select Index has returned 8.8% annually in the last 20 odd years. That is 2% higher than TSX. So, you always need dividend stocks, especially in 2024.”
Mr. Lewenza's focus on long-term returns from dividend stocks aligns with findings from various reports reinforcing the value these stocks bring to investors over extended periods. A report from Middlefield examined the S&P 500's total return from December 31, 1992, to December 31, 2022, breaking it down into two key components. Of the impressive aggregate total return of +1,481%, 47% was attributed to dividends and their reinvestment. The remaining 53% was derived from price appreciation. This breakdown underscores the significant contribution dividends make to overall returns, comprising almost half of the total returns over this period.
Some of the best dividend stocks that are gaining traction among investors include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP). These companies not only offer consistent dividends but also demonstrate a commitment to long-term growth and financial stability. Their ability to generate steady cash flows, adapt to market changes, and maintain a solid dividend track record positions them favorably among investors seeking reliable income streams amidst market fluctuations. In this article, we will further discuss some of the best stocks for dividends.
To compile this list, we thoroughly reviewed reputable sources such as Forbes, Morningstar, Barron’s, and Business Insider. From their latest articles, we gathered the stocks they collectively favored. Additionally, we assessed the sentiment of hedge funds for each stock using Insider Monkey's Q3 2023 database. The stocks are arranged in ascending order based on the number of hedge funds that hold stakes in these companies. While our article focuses on the best stocks for dividends, Insider Monkey also monitors the movements of corporate insiders and hedge funds. Hedge funds' top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points since 2014 (see the details here). That's why we encourage our readers to delve into the specifics and nuances of our research.
Federal Realty Investment Trust (NYSE:FRT) is an American real estate investment trust company that specializes in the ownership, management, and development of high-quality retail and mixed-use properties. The company declared a quarterly dividend of $1.09 per share on November 2, which was in line with its previous dividend. It maintains an impressive 56-year streak of consistent dividend growth, which makes FRT one of the best stocks for dividends. The stock has a dividend yield of 4.22%, as of December 21.
At the end of the third quarter of 2023, 15 hedge funds owned stakes in Federal Realty Investment Trust (NYSE:FRT), as per Insider Monkey's database. The collective value of these stakes is over $171 million.
Stanley Black & Decker, Inc. (NYSE:SWK) is a diversified global provider of power tools, hand tools, and related accessories, as well as security solutions, industrial products, and engineered fastening systems. The company has raised its dividends for 56 years in a row and it has also been making regular dividend payments to shareholders for the past 146 years. The company offers a quarterly dividend of $0.81 per share and has a dividend yield of 3.37%, as of December 21.
The number of hedge funds tracked by Insider Monkey owning stakes in Stanley Black & Decker, Inc. (NYSE:SWK) stood at 19 in Q3 2023, having a total value of over $253.5 million.
24. Mid-America Apartment Communities, Inc. (NYSE:MAA)
Number of Hedge Fund Holders: 19
Mid-America Apartment Communities, Inc. (NYSE:MAA) is a Tennessee-based real estate investment trust company that focuses on the acquisition, development, redevelopment, and management of multifamily apartment communities across the country. On December 12, the company declared a 5% hike in its quarterly dividend to $1.47 per share. Through this increase, the company stretched its dividend growth streak to 13 years, which makes MAA one of the best stocks for dividends. As of December 21, the stock has a dividend yield of 4.45%.
At the end of Q3 2023, 19 hedge funds in Insider Monkey's database reported having stakes in Mid-America Apartment Communities, Inc. (NYSE:MAA), worth roughly $200 million. Among these hedge funds, Balyasny Asset Management was the company's leading stakeholder in Q3.
ALLETE, Inc. (NYSE:ALE) is an American electric services company that also provides natural gas services to its consumers. The company offers a quarterly dividend of $0.6775 per share and has a dividend yield of 4.47%, as of December 21. It is one of the best stocks for dividends as the company has been raising its dividends consistently for 13 years.
As of the close of Q3 2023, 20 hedge funds tracked by Insider Monkey owned stakes in ALLETE, Inc. (NYSE:ALE), down slightly from 21 in the preceding quarter. The overall value of these stakes is over $93.3 million.
Nordson Corporation (NYSE:NDSN) is a multinational corporation that specializes in the manufacturing of equipment and systems used for precision dispensing, fluid management, and adhesive application processes. The company offers a quarterly dividend of $0.68 per share, having raised it by 4.6% in August this year. This marked the company's 60th consecutive year of dividend growth. As of December 21, the stock has a dividend yield of 1.07%. NDSN is among the best stocks for dividends.
At the end of September 2023, 21 hedge funds in Insider Monkey's database owned stakes in Nordson Corporation (NYSE:NDSN), worth collectively over $97.2 million.
A diversified manufacturing company, Illinois Tool Works Inc. (NYSE:ITW) is next on our list of the best stocks for dividends. The company has been rewarding shareholders with growing dividends for the past 51 years and it pays a quarterly dividend of $1.40 per share. The stock comes with a dividend yield of 2.18%, as recorded on December 21.
According to Insider Monkey's database of Q3 2023, 34 hedge funds owned stakes in Illinois Tool Works Inc. (NYSE:ITW), which remained the same as in the previous quarter. These stakes are collectively valued at over $854.4 million.
A. O. Smith Corporation (NYSE:AOS) is a global leader in the manufacturing of water heating equipment, water treatment products, and air purification solutions. The company offers a quarterly dividend of $0.32 per share and has a dividend yield of 1.60%, as of December 21. This year marked the 30th consecutive year in which the company increased its dividend payout, which makes AOS one of the best stocks for dividends.
As of the end of Q3 2023, 37 hedge funds tracked by Insider Monkey owned stakes in A. O. Smith Corporation (NYSE:AOS), compared with 39 in the previous quarter. The consolidated value of these stakes is over $835.8 million. With over 4.1 million shares, Impax Asset Management was the company's leading stakeholder in Q3.
Altria Group, Inc. (NYSE:MO) is an American leading multinational corporation primarily operating in the tobacco and related products industry. On December 6, the company declared a quarterly dividend of $0.98 per share, which was in line with its previous dividend. Overall, the company has raised its dividends for 54 years straight. With a dividend yield of 9.73% as of December 21, MO is one of the best stocks for dividends.
Insider Monkey’s database of Q3 2023 showed that 40 hedge funds owned stakes in Altria Group, Inc. (NYSE:MO), compared with 43 in the preceding quarter. These stakes are collectively valued at over $565 million.
Roper Technologies, Inc. (NASDAQ:ROP) is a diversified technology company that operates across various industries, providing software and engineered products and solutions. The company announced a 9.9% hike in its quarterly dividend on November 9 at $0.75 per share. This marked the company's 32nd consecutive year of dividend growth. The stock offers a dividend yield of 0.56% as of December 21, coming through as one of the best stocks for dividends.
As of the end of Q3 2023, 42 hedge funds in Insider Monkey's database reported having stakes in Roper Technologies, Inc. (NASDAQ:ROP), up from 41 a quarter earlier. These stakes have a total value of over $2.45 billion.
Automatic Data Processing, Inc. (NASDAQ:ADP) is a global leader in providing human resources (HR) management software and services, as well as outsourcing solutions for businesses of all sizes. The company pays a quarterly dividend of $1.40 per share, growing it by 12% in November this year. This was the company's 49th consecutive year of dividend growth, which places ADP on our list of the best dividend stocks. As of December 21, the stock offers a dividend yield of 2.41%.
The number of hedge funds tracked by Insider Monkey owning stakes in Automatic Data Processing, Inc. (NASDAQ:ADP) stood at 50 in Q3 2023, which remained unchanged from the previous quarter. The consolidated value of stakes owned by these hedge funds is over $3.36 billion.
Texas Instruments Incorporated (NASDAQ:TXN) is a global semiconductor company that designs and manufactures analog and embedded processing chips for a wide range of electronics applications. Its quarterly dividend currently stands at $1.30 per share and the stock offers a dividend yield of 3.15%, as of December 21. TXN is one of the best stocks for dividends on our list as the company has been growing its dividends for the past 12 years.
At the end of Q3 2023, 53 hedge funds tracked by Insider Monkey owned stakes in Texas Instruments Incorporated (NASDAQ:TXN), compared with 56 in the preceding quarter. These stakes have a total value of over $2.06 billion.
15. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 53
International Business Machines Corporation (NYSE:IBM) is an American multinational tech and consulting company. The company has raised its dividends every year for the past 28 years and it currently offers a quarterly dividend of $1.66 per share. The stock has a dividend yield of 4.15%, as recorded on December 21.
Of the 910 hedge funds in Insider Monkey's database at the end of Q3 2023, 53 funds owned stakes in International Business Machines Corporation (NYSE:IBM), up from 51 in the previous quarter. The collective value of these stakes is more than $843 million. Among these hedge funds, Marshall Wace LLP was one of the company's leading stakeholders in Q3.
An American multinational beverage company, The Coca-Cola Company (NYSE:KO) offers a quarterly dividend of $0.46 per share and holds a 61-year track record of consistent dividend growth. As of December 21, the stock has a dividend yield of 3.19%. The company's solid dividend growth makes it one of the best stocks for dividends on our list.
With a collective stake value of over $25 billion, 57 hedge funds in Insider Monkey's database owned positions in The Coca-Cola Company (NYSE:KO) in the third quarter of 2023. Warren Buffett's Berkshire Hathaway was the company's leading stakeholder in Q3.
Target Corporation (NYSE:TGT) is a well-known retail company that operates a chain of general merchandise stores across the US. The company has been rewarding shareholders with growing dividends for the past 52 years and currently offers a quarterly dividend of $1.10 per share. The stock has a dividend yield of 3.21%, as of December 21.
The number of hedge funds tracked by Insider Monkey owning stakes in Target Corporation (NYSE:TGT) jumped to 58 in Q3 2023, from 45 in the previous quarter. These stakes are collectively valued at over $1.3 billion.
NextEra Energy, Inc. (NYSE:NEE) is an American leading energy company that is primarily involved in the generation, transmission, distribution, and sale of electricity. On October 13, the company announced a quarterly dividend of $0.4675 per share, which was in line with its previous dividend. The company's dividend growth streak stands at 27 years, which makes NEE one of the best stocks for dividends. As of December 21, the stock has a dividend yield of 3.13%.
As per Insider Monkey's database of Q3 2023, 58 hedge funds held stakes in NextEra Energy, Inc. (NYSE:NEE), compared with 59 a quarter earlier. The total value of these stakes is more than $1.4 billion.
An American real estate investment trust company, American Tower Corporation (NYSE:AMT) ranks eleventh on our list of the best stocks for dividends. The company announced a 4.9% increase in its quarterly dividend to $1.70 per share on December 14. This was the company's 13th consecutive year of dividend growth. As of December 21, the stock has a dividend yield of 3.22%.
At the end of the third quarter of 2023, 60 hedge funds tracked by Insider Monkey owned investments in American Tower Corporation (NYSE:AMT), the same as in the previous quarter. The total value of stakes owned by these hedge funds is more than $3 billion.
