In this article, we discuss top 25 dividend contenders according to yields. You can skip our detailed analysis of dividend stocks and their previous performance, and go directly to read Dividend Contenders List Ranked By Yield: Top 10.
Dividend contenders typically refer to companies that have consistently increased their dividends for at least 10 consecutive years but haven't yet reached the threshold of 25 years of consecutive dividend growth. These stocks are sought after for their track record of rewarding shareholders and are considered a cornerstone of a conservative and income-oriented investment strategy. Dividend growth stocks increasingly captivated market participants who are in pursuit of potential market outperformance and appealing yields. This trend gained momentum notably after the 2008 Global Financial Crisis when interest rates plummeted to historic lows. The subsequent environment of reduced rates prompted investors to seek alternative sources of income. This demand intensified even more after 2020, as the world grappled with the economic repercussions of the COVID-19 pandemic, resulting in an even lower-rate landscape.
Based on data from S&P Dow Jones Indices covering the time span between December 31, 1999, and March 31, 2022, it was found that during market downturns, the S&P High Yield Dividend Aristocrats showed stronger performance compared to both the S&P Composite 1500 and the S&P 500 High Dividend Index. Specifically, on average, the S&P High Yield Dividend Aristocrats outpaced the S&P Composite 1500 by 140 basis points (bps) per month and the S&P 500 High Dividend Index by 49 basis points per month during these periods of market decline.
The rationale behind these returns might seem straightforward. Dividend growers, by their very nature, showcase financial stability and confidence in their business. Their consistent increases in dividends send a positive signal to investors, reflecting strong financial health and a belief in future growth. Naturally, these stocks tend to attract investors seeking reliable returns over time. Conversely, companies that opt to cut their dividends typically do so as a measure to navigate financial challenges or uncertain times. According to a report by RMB Capital, dividend growers and initiators delivered a 9.62% return from 1972 to 2018, compared with a negative 0.79% return for dividend cutters and eliminators. The report also mentioned that companies that consistently increase their dividends have demonstrated a remarkable ability to not just maintain but actually boost their dividends, even in challenging market conditions. This resilience is particularly valuable when it comes to managing investment portfolios. Dividend growth portfolios offer a distinct advantage due to their potential for strong diversification.
Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV) are some of the best dividend stocks as these companies have established an impressive track record of consistently increasing their dividends for decades, making them a go-to choice for income-seeking investors. In this article, we will further discuss dividend growth stocks on our dividend contenders list.
For this list, we looked at a group of dividend contenders, recognized for consistently increasing dividends for 10 consecutive years, yet less than 25 years. From this list, we chose companies with the highest dividend yields as of December 23 and arranged them in order from lowest to highest yield.
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.
25. MidWestOne Financial Group, Inc. (NASDAQ:MOFG)
Dividend Yield as of December 23: 3.58%
MidWestOne Financial Group, Inc. (NASDAQ:MOFG) is an Iowa-baed commercial banking company that offers a range of financial services to individuals, businesses, and institutions. On October 26, the company declared a quarterly dividend of $0.2425 per share, which was in line with its previous dividend. The stock made it to our dividend contenders list as the company has been growing its dividends for the past 10 years. MOFG offers a dividend yield of 3.58%, as of December 23.
At the end of Q3 2023, 4 hedge funds in Insider Monkey's database reported having stakes in MidWestOne Financial Group, Inc. (NASDAQ:MOFG), which remained the same as in the previous quarter. The collective value of these stakes is over $2.5 million.
First Merchants Corporation (NASDAQ:FRME) is an American financial holding company that operates through its subsidiary, First Merchants Bank. The corporation primarily provides various financial services, including banking, retail, commercial lending, wealth management, and investment advisory services. The company has been growing its dividends for the past 12 years and its quarterly payout comes in at $0.34 per share. With a dividend yield of 3.65%, as of December 23, FRME is one of the best stocks on our dividend contenders list.
As of the close of Q3 2023, 13 hedge funds tracked by Insider Monkey owned stakes in First Merchants Corporation (NASDAQ:FRME), up from 11 in the preceding quarter. The overall value of these stakes is over $75.5 million. With roughly 1.6 million shares, Cardinal Capital was the company's leading stakeholder in Q3.
Cambridge Bancorp (NASDAQ:CATC) is next on our dividend contenders list. The bank holding company currently offers a quarterly dividend of $0.67 per share and has a dividend yield of 3.76%, as of December 23. Its dividend growth streak spans over 24 years.
The number of hedge funds tracked by Insider Monkey owning stakes in Cambridge Bancorp (NASDAQ:CATC) grew to 9 in Q3 2023, from 6 in the previous quarter. The consolidated value of these stakes is over $13 million.
Fidelity National Financial, Inc. (NYSE:FNF) is a leading provider of title insurance, settlement services, and other related services. On November 8, the company announced a 7% hike in its quarterly dividend to $0.48 per share. Through this increase, the company stretched its dividend growth streak to 12 years, which places FNF on our dividend contenders list. The stock's dividend yield on December 23 came in at 3.83%.
As of the end of Q3 2023, 26 hedge funds in Insider Monkey's database owned stakes in Fidelity National Financial, Inc. (NYSE:FNF), compared with 31 in the previous quarter. The overall value of these stakes is more than $1.2 billion.
21. The PNC Financial Services Group, Inc. (NYSE:PNC)
Dividend Yield as of December 23: 4.07%
An American diversified financial services company, The PNC Financial Services Group, Inc. (NYSE:PNC) has been rewarding shareholders with growing dividends for the past 13 years. The company pays a quarterly dividend of $1.55 per share and has a dividend yield of 4.07%, as recorded on December 23. It is among the best stocks on our dividend contenders list.
The PNC Financial Services Group, Inc. (NYSE:PNC) was a part of 45 hedge fund portfolios at the end of Q3 2023, as per Insider Monkey's database. The stakes owned by these hedge funds have a collective value of over $754.5 million.
Fulton Financial Corporation (NASDAQ:FULT) is a financial holding company that offers a wide range of related services to its consumers. The company announced a 6% increase in its quarterly dividend on December 19, which took its dividend growth streak to 13 years. It now offers a quarterly dividend of $0.17 per share and has a dividend yield of 4.08%, as of December 23.
Insider Monkey's database of Q3 2023 indicated that 14 hedge funds owned stakes in Fulton Financial Corporation (NASDAQ:FULT), up from 12 in the previous quarter. These stakes have a consolidated value of over $46.7 million.
Northrim BanCorp, Inc. (NYSE:NRIM) is an American bank holding company that offers various financial products and services including checking and savings accounts, loans, mortgages, credit cards, investment services, treasury management, and online banking facilities. On December 1, the company announced a quarterly dividend of $0.60 per share, which was in line with its previous dividend. Overall, it maintains a 13-year streak of consistent dividend growth, which makes NRIM one of the best stocks on our dividend contenders list. As of December 23, the stock has a dividend yield of 4.09%.
As of the end of September 2023, 7 hedge funds tracked by Insider Monkey owned stakes in Northrim BanCorp, Inc. (NYSE:NRIM), compared with 9 in the previous quarter. The collective value of these stakes is more than $6 million.
18. American Electric Power Company, Inc. (NASDAQ:AEP)
Dividend Yield as of December 23: 4.38%
American Electric Power Company, Inc. (NASDAQ:AEP) is a major electric utility company in the US, providing electricity generation, transmission, and distribution services. The company pays a quarterly dividend of $0.88 per share, having raised it by 6% in October this year. The company has been growing its dividends for the past 14 years and has been making regular dividend payments since 1910. With a dividend yield of 4.38%, AEP is a prominent stock on our dividend contenders list.
At the end of the third quarter of 2023, 39 hedge funds tracked by Insider Monkey owned stakes in American Electric Power Company, Inc. (NASDAQ:AEP), growing from 33 in the preceding quarter. These stakes are collectively valued at over $545.4 million.
ALLETE, Inc. (NYSE:ALE) is a Minnesota-based electric services company that is involved in the energy infrastructure sector, with interests in renewable energy projects like wind and solar power. The company offers a quarterly dividend of $0.6775 per share and has a dividend yield of 4.40%, as recorded on December 23. With a dividend growth streak of 13 years under its belt, ALE is one of the best stocks on our dividend contenders list.
According to Insider Monkey's database of Q3 2023, 20 hedge funds owned stakes in ALLETE, Inc. (NYSE:ALE), compared with 21 in the previous quarter. The collective value of these stakes is over $93.3 million. Among these hedge funds, AQR Capital Management was the company's leading stakeholder in Q3.
CubeSmart (NYSE:CUBE) is a self-storage real estate investment trust company that owns, operates, manages, acquires, and develops self-storage properties in the US. On December 7, it declared a 4.1% hike in its quarterly dividend to $0.51 per share. This was the company's 14th consecutive year of dividend growth, which makes CUBE one of the best stocks on our dividend contenders list. As of December 23, the stock offers a dividend yield of 4.43%.
With a collective stake value of over $173.8 million, 19 hedge funds in Insider Monkey's database owned positions in CubeSmart (NYSE:CUBE). In the previous quarter, the number of hedge funds owning positions in the company remained the same, with stakes valued at roughly $80 million.
U.S. Bancorp (NYSE:USB) is a diversified financial services company that provides a range of banking, investment, mortgage, trust, and payment services in the U.S. The company offers a quarterly dividend of $0.49 per share, having raised it by 2% in December this year. This marked the company's 13th consecutive year of dividend hikes. With a dividend yield of 4.50%, USB is one of the best stocks on our dividend contenders list.
At the end of September 2023, 29 hedge funds owned stakes in U.S. Bancorp (NYSE:USB), as per Insider Monkey's database. The overall worth of these stakes is nearly $413 million. With nearly 9 million shares, First Eagle Investment Management was the company's leading stakeholder in Q3.
A global biopharmaceutical company, Bristol-Myers Squibb Company (NYSE:BMY) has been growing its dividends for the past consecutive 18 years. The company recently announced a quarterly dividend of $0.60 per share for a dividend yield of 4.59%, as of December 23.
Of the 910 hedge funds tracked by Insider Monkey at the end of Q3 2023, 65 hedge funds owned stakes in Bristol-Myers Squibb Company (NYSE:BMY), compared with 66 in the preceding quarter. The stakes owned by these hedge funds have a collective value of more than $1.8 billion.
Brookfield Infrastructure Partners L.P. (NYSE:BIP) is a global infrastructure company that owns and operates a diverse portfolio of infrastructure assets across various sectors. On November 1, the company announced a quarterly dividend of $0.3825 per share, which was in line with its previous dividend. It is one of the best stocks on our dividend contenders list as the company has been growing its payouts for the past 15 years. The stock has a dividend yield of 4.83%, as of December 23.
The number of hedge funds in Insider Monkey's database owning stakes in Brookfield Infrastructure Partners L.P. (NYSE:BIP) jumped to 17 in Q3 2023, from 11 in the previous quarter. The consolidated value of these stakes is over $115.7 million. Among these hedge funds, Select Equity Group was the company's leading stakeholder in Q3.
Best Buy Co., Inc. (NYSE:BBY) is an American retailer that specializes in consumer electronics, technology products, and services. The company is one of the best dividend stocks on our list as it returned $603 million to shareholders through dividends in its most recent quarter. Moreover, it has raised its payouts for 10 consecutive years. The company pays a quarterly dividend of $0.92 per share and has a dividend yield of 4.83%, as of December 23.
As per Insider Monkey's database of Q3 2023, 28 hedge funds owned stakes in Best Buy Co., Inc. (NYSE:BBY), down slightly from 31 in the previous quarter. These stakes are worth over $311.8 million in total.
Up next on our dividend contenders list is Prudential Financial, Inc. (NYSE:PRU), which is a global financial services company that offers a wide range of related products and services. The company offers a per-share dividend of $1.25 every quarter and has a dividend yield of 4.84%, as of December 23. The company's dividend growth streak spans over 15 years.
At the end of September 2023, 28 hedge funds owned stakes in Prudential Financial, Inc. (NYSE:PRU), up from 24 in the previous quarter, as per Insider Monkey's database. The collective value of these stakes is more than $438.7 million.
