15 Best American Dividend Stocks To Buy Now
In this article, we discuss 15 best American dividend stocks to buy now. You can skip our detailed analysis of dividend stocks and their previous performance, and go directly to read 5 Best American Dividend Stocks To Buy Now.
In the third quarter of this year, the U.S. economy expanded at a rate of 4.9% per year, even though there were worries about inflation and high interest rates. This growth was a significant change from the slower growth the economy experienced in the first half of 2023. Rob Haworth, senior investment strategy director at U.S. Bank Wealth Management, recently presented his stance on the ongoing economic situation in the country. Here is what the analyst has to say:
“GDP growth keeps surprising us regardless of mixed signals from other economic measures. Most economists continue to extend out their expectations for a potential recession’s timing.”
He further said:
“The continued strength of the consumer is a primary driver of economic growth so far this year. The job market’s strength is helping consumers maintain their spending levels.”
During times of potential market instability, investors often aim to reduce risk in their portfolios, and one dependable strategy to achieve this is by investing in dividend stocks. According to a report by S&P Global, over the years, dividends have become a more significant source of personal income as their percentage in total income has consistently gone up. In 1981, dividend income was 2.85%, and by 2014, it had risen to 5.89%. In contrast, interest income has decreased from 13.5% in 1981 to 8.6% in 2014.
While dividend stocks may not be performing as well as the overall market this year, U.S. companies have continued to meet their commitment to shareholders by consistently paying dividends. A report from Janus Henderson indicated that in the third quarter of 2023, there were common dividend increases in the U.S. totaling $18.0 billion. This amount represented an 84.0% increase from the $9.8 billion observed in the second quarter of 2023. The report also mentioned that 448 U.S. companies raised their dividends during the quarter.
Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and Chevron Corporation (NYSE:CVX) are some of the best dividend stocks known for their consistent dividend growth that has persisted for several decades. In this article, we will have a look at some other American dividend stocks.
A close-up image of a stock market graph displaying the growth of the company's mutual funds.
Our Methodology:
We created this list by scanning Insider Monkey's Q2 2023 database for U.S. companies that have consistently increased their dividends for at least 15 years and are traded on American stock exchanges. Then, we chose stocks with dividend yields above 2% as of November 4. Finally, we selected the top 15 companies with the most hedge fund investors in Q2 2023 from the refined dataset.
15. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 51
International Business Machines Corporation (NYSE:IBM) is an American global tech company with a diverse range of businesses and operations. The company designs and manufactures computer hardware products, including servers, mainframes, storage devices, and other data center equipment.
On October 30, International Business Machines Corporation (NYSE:IBM) declared a quarterly dividend of $1.66 per share, which was in line with its previous dividend. The company has been growing its dividends consistently for the past 28 years, which makes it one of the best dividend stocks on our list. In the third quarter of 2023, it returned $1.5 billion to shareholders through dividends. The stock has a dividend yield of 4.49%, as of November 4.
At the end of Q2 2023, 51 hedge funds in Insider Monkey's database reported having stakes in International Business Machines Corporation (NYSE:IBM), up from 49 in the preceding quarter. The consolidated value of these stakes is roughly $814 million.
14. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 52
Lockheed Martin Corporation (NYSE:LMT) is a global aerospace, defense, arms, and security company that operates in several key areas within the aerospace and defense industry. On October 7, the company announced a 5% hike in its quarterly dividend to $3.15 per share. Through this increase, the company took its growth streak to 21 years. The stock's dividend yield on November 4 came in at 2.78%. In its most recent quarter, the company returned $2.5 billion to shareholders through dividends and share repurchases. It is among the best dividend stocks on our list.
As of the end of Q2 2023, 52 hedge funds tracked by Insider Monkey reported having stakes in Lockheed Martin Corporation (NYSE:LMT), down from 58 in the previous quarter. The collective value of these stakes is roughly $2 billion.
13. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 53
Verizon Communications Inc. (NYSE:VZ) is a large telecommunications company that provides a wide range of services in the telecommunications and information technology sectors. The company offers a quarterly dividend of $0.665 per share, having raised it by 1.9% in September this year. This was the company's 17th consecutive year of dividend growth, which makes it one of the best dividend stocks on our list. As of November 4, the stock has a dividend yield of 7.38%.
The number of hedge funds tracked by Insider Monkey owning stakes in Verizon Communications Inc. (NYSE:VZ) stood at 53 in the second quarter of 2023. The collective value of these stakes is nearly $829 million. With over 6.7 million shares, Diamond Hill Capital was the company's leading stakeholder in Q2.
12. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 56
Texas Instruments Incorporated (NASDAQ:TXN) is next on our list of the best dividend stocks to buy now. The company raised its quarterly dividend by 5% on October 19 to $1.30 per share. This marked the company's 12th consecutive year of dividend growth. The stock's dividend yield on November 4 came in at 3.46%.
Texas Instruments Incorporated (NASDAQ:TXN) is an American semiconductor company that designs and manufactures a wide range of integrated circuits and analog chips for a variety of industries and applications. In the third quarter of 2023, the company returned $1.12 billion in dividends to shareholders.
Texas Instruments Incorporated (NASDAQ:TXN) was a part of 56 hedge fund portfolios at the end of Q2 2023, growing from 52 in the previous quarter, as per Insider Monkey's database. These stakes have a total value of over $2.34 billion.
Ensemble Capital Management mentioned Texas Instruments Incorporated (NASDAQ:TXN) in its Q3 2023 investor letter. Here is what the firm has to say:
“Companies like ADI and Texas Instruments Incorporated (NASDAQ:TXN) (which the industry refers to as TI), two of the largest analog companies, have built broad portfolios of tens of thousands of products, each with over a hundred thousand customers who make millions of products that sell billions of units. The product needs and lifecycles across all industries can vary from a year to decades, which is why ADI derives half of its revenue from products that are over ten years old! Historically, the prices of these chips have ranged from less than a dollar to a few dollars while volumes in the billions of chips result in $10-20 billion dollars of revenue for each of these companies at operating profit margins of 30-50%. (Click here to read the full text)
11. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 58
Colgate-Palmolive Company (NYSE:CL) is a well-known global consumer goods company that specializes in the production and marketing of a wide range of personal care and household products. It is one of the best dividend stocks on our list as the company has been raising its dividends consistently for the past 61 years. It currently pays a quarterly dividend of $0.61 per share and has a dividend yield of 2.57%, as of November 4.
At the end of June 2023, 58 hedge funds in Insider Monkey's database reported having stakes in Colgate-Palmolive Company (NYSE:CL), up from 55 in the previous quarter. The consolidated value of these stakes is over $2.6 billion.
10. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 59
NextEra Energy, Inc. (NYSE:NEE) is a Florida-based electric utility holding company and one of the world's largest producers of renewable energy. On October 14, the company declared a quarterly dividend of $0.4675 per share, which was consistent with its previous dividend. It has raised its dividends for 27 consecutive years and has a dividend yield of 3.15%, as recorded on November 4.
Of the 910 hedge funds tracked by Insider Monkey at the end of Q2 2023, 59 hedge funds owned stakes in NextEra Energy, Inc. (NYSE:NEE), which was the same in the previous quarter. The stakes owned by these funds have a total value of more than $918.3 million.
9. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 61
The Coca-Cola Company (NYSE:KO) is an American multinational beverage company. In the first nine months of the year, the company generated $8.9 billion in operating cash flow and its free cash flow for the period came in at $7.9 billion. Its strong cash position has allowed the company to raise its dividends for 61 consecutive years. The company currently pays a quarterly dividend of $0.46 per share and has a dividend yield of 3.24%, as of November 4.
At the end of Q2 2023, 61 hedge funds in Insider Monkey's database reported having stakes in The Coca-Cola Company (NYSE:KO), which remained unchanged from the previous quarter. The total value of these stakes is over $27.2 billion.
8. Lowe's Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 64
Lowe's Companies, Inc. (NYSE:LOW) is a major American retail company that operates a chain of home improvement and appliance stores. The company's dividend growth streak currently stands at 59 years and it pays a quarterly dividend of $1.10 per share. The stock offers a dividend yield of 2.26%, as of November 4.
Insider Monkey's database of Q2 2023 indicated that 64 hedge funds owned stakes in Lowe's Companies, Inc. (NYSE:LOW), compared with 67 in the previous quarter. These stakes are collectively valued at over $3.7 billion. Among these hedge funds, Pershing Square was the company's leading stakeholder in Q2.
7. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 65
Analog Devices, Inc. (NASDAQ:ADI) is an American semiconductor company that specializes in the design and manufacturing of analog, mixed-signal, and digital signal-processing integrated circuits. The company pays a quarterly dividend of $0.86 per share and has been raising its dividends consistently for the past 20 years. As of November 4, the stock has a dividend yield of 2.05%.
As of the close of June 2023, 65 hedge funds tracked by Insider Monkey reported having investments in Analog Devices, Inc. (NASDAQ:ADI), down from 73 in the preceding quarter. The total value of stakes owned by these hedge funds is over $5.15 billion.
6. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 68
PepsiCo, Inc. (NASDAQ:PEP) is a New York-based multinational food and beverage company known for its extensive portfolio of popular and well-established brands. The company offers a quarterly dividend of $1.265 per share and has a dividend yield of 3.03%, as of November 4. It is one of the best dividend stocks on our list as the company has raised its dividends for 51 years in a row.
At the end of Q2 2023, 68 hedge funds in Insider Monkey's database owned stakes in PepsiCo, Inc. (NASDAQ:PEP), worth collectively over $3.5 billion.
Madison Investments mentioned PepsiCo, Inc. (NASDAQ:PEP) in its Q3 2023 investor letter. Here is what the firm has to say:
“PepsiCo, Inc. (NASDAQ:PEP) announced that it will eliminate plastic rings on beverage multi-packs across the U.S. and Canada. It will introduce recyclable paper-based designs in a phased regional approach starting later this year. This contributes toward the company’s goals to reduce virgin plastic across its portfolio by 50% by 2030. Pepsi also announced that its SodaStream subsidiary signed an agreement that will enable its production sites in Israel to run on renewable energy.”
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Disclosure. None. 15 Best American Dividend Stocks To Buy Now is originally published on Insider Monkey.