Top 25 Dividend Stocks of 2023
In this article, we discuss top 25 dividend stocks of 2023. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read Top 10 Dividend Stocks of 2023.
The S&P 500 didn't perform well in September and ended the third quarter on a low note mainly because investors were worried about the U.S. economy and the possibility of a government shutdown. Even with some positive economic news, the S&P 500's value dropped by 4.5% last month. However, it's still up by 10.35% for the year so far, despite concerns about a possible U.S. recession. This is because inflation has eased, and rising interest rates didn't harm the economy as much as experts thought. Investors are hopeful that things will get better this month because historically, October has been a good month for the broader market. They are looking forward to a potential turnaround in the market during this time.
This year, investors are shifting their focus toward assets that generate income. While tech stocks performed strongly in the first half of the year, the NASDAQ, which is dominated by tech companies, experienced a significant drop of nearly 6% in September. This decline marked the worst month for the index in 2023. The previous performance of these stocks also shows that the tech sector has always remained sensitive to interest rates.
When comparing, dividend stocks have consistently stayed reliable over time, even when the economy goes through ups and downs. Not only this, but dividend growth has also outpaced inflation over the years. In one of our articles, we referred to BlackRock’s data which revealed that U.S. companies increased their dividends by 3.7% annually from 1971 to 2022, while inflation only grew by 2% each year. We also mentioned that S&P 500 dividends grew by 5.73% from 1957 to 2022, whereas inflation only rose by 3.68% during that time. This indicates that dividends have been beating inflation consistently.
Also Read: Dividend Aristocrats Ranked By Yield: Top 25
Investing in dividend stocks is important, but it's not as straightforward as it appears. Some companies pay dividends, but they haven't consistently kept up with them, and some have even reduced or stopped paying them altogether. For this reason, companies that consistently raise their dividends are favored by investors. The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some of the best dividend stocks that have raised their payouts for decades, becoming top choices for investors. In this article, we will discuss the top dividend stocks of 2023.
photo by scott graham on Unsplash
Our Methodology:
For this list, we scanned Insider Monkey's database of 910 hedge funds and identified companies that have raised their dividends for 5 consecutive years or more. From that list, we picked stocks that have generated positive returns in 2023, as of October 2. We ranked those companies in ascending order of the number of hedge funds having stakes in them as of the second quarter of 2023.
25. Enterprise Products Partners L.P. (NYSE:EPD)
Number of Hedge Fund Holders: 25
Year-to-Date Returns as of October 2: 12.03%
Enterprise Products Partners L.P. (NYSE:EPD) is a Texas-based energy company that operates as a master limited partnership (MLP). It is one of the largest midstream energy companies in the US. The company currently pays a quarterly dividend of $0.50 per share, having raised it by 2% in July this year. Through this increase, the company stretched its dividend growth streak to 24 years, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 7.35%, as of October 2.
At the end of Q2 2023, 25 hedge funds in Insider Monkey's database reported having stakes in Enterprise Products Partners L.P. (NYSE:EPD), compared with 26 in the previous quarter. The collective value of these stakes is over $272.7 million.
24. Illinois Tool Works Inc. (NYSE:ITW)
Number of Hedge Fund Holders: 34
Year-to-Date Returns as of October 2: 4.59%
Illinois Tool Works Inc. (NYSE:ITW) is an American diversified manufacturing company that operates in a wide range of industries and provides various products and solutions. On August 4, the company announced a 7% hike in its quarterly dividend to $1.40 per share. This marked the company's 51st consecutive year of dividend growth. As of October 2, the stock has a dividend yield of 2.43%. It is among the best dividend stocks on our list.
As of the close of Q2 2023, 34 hedge funds tracked by Insider Monkey owned stakes in Illinois Tool Works Inc. (NYSE:ITW), up from 32 in the previous quarter. The consolidated value of these stakes is over $278.3 million. Among these hedge funds, Markel Gayner Asset Management was the company's largest stakeholder in Q2.
23. Republic Services, Inc. (NYSE:RSG)
Number of Hedge Fund Holders: 37
Year-to-Date Returns as of October 2: 9.48%
Republic Services, Inc. (NYSE:RSG) is a leading waste management and environmental services company in the US. The company provides a range of services related to waste collection, disposal, recycling, and environmental sustainability.
Republic Services, Inc. (NYSE:RSG) has been raising its dividends consistently for the past 19 years, which makes it one of the best dividend stocks on our list. It currently pays a quarterly dividend of $0.535 per share and has a dividend yield of 1.52%, as of October 2.
At the end of June 2023, 37 hedge funds in Insider Monkey's database held investments in Republic Services, Inc. (NYSE:RSG), compared with 40 in the previous quarter. The total value of these stakes is over $1.8 billion.
The London Company mentioned Republic Services, Inc. (NYSE:RSG) in its Q2 2023 investor letter. Here is what the firm has to say:
“Initiated: Republic Services, Inc. (NYSE:RSG) – RSG is the 2nd largest waste management company in North America. It generates consistent, predictable cash flows with over 80% of its revenues being annuity-like. RSG holds almost 25% of the landfill capacity in the U.S. Industry consolidation and the limited availability of landfills, on top of high transportation costs, have created local duopolies for landfill owners in their respective markets and increased returns. We’re attracted to RSG’s leading position in a stable business with a high degree of recurring revenue, and we believe the company is at an inflection point with its pricing strategy and landfill asset utilization. RSG has a solid balance sheet along with an experienced and shareholder friendly management team.”
22. Nucor Corporation (NYSE:NUE)
Number of Hedge Fund Holders: 38
Year-to-Date Returns as of October 2: 18.3%
Nucor Corporation (NYSE:NUE) is one of the largest and most diversified steel producers in the US. On September 14, the company declared a quarterly dividend of $0.51 per share, which fell in line with its previous dividend. It holds a 50-year streak of consistent dividend growth, which makes it one of the best dividend stocks on our list. The stock's dividend yield on October 2 came in at 1.31%.
Nucor Corporation (NYSE:NUE) was a part of 38 hedge fund portfolios at the end of Q2 2023, as per Insider Monkey's database. The collective value of stakes owned by these hedge funds is over $563.5 million.
21. Stryker Corporation (NYSE:SYK)
Number of Hedge Fund Holders: 46
Year-to-Date Returns as of October 2: 8.64%
Stryker Corporation (NYSE:SYK) is an American medical technology and medical device company that specializes in the development, manufacturing, and marketing of a wide range of medical products and equipment. The company offers a quarterly dividend of $0.75 per share and has a dividend yield of 1.12%, as of October 2. It has raised its dividends for 29 consecutive years.
At the end of June 2023, 46 hedge funds in Insider Monkey's database owned investments in Stryker Corporation (NYSE:SYK), up from 42 in the previous quarter. The consolidated value of stakes owned by these hedge funds is over $2.42 billion.
20. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 51
Year-to-Date Returns as of October 2: 0.08%
An American tech company, International Business Machines Corporation (NYSE:IBM) is next on our list of the best dividend stocks of 2023. The company has raised its dividends for 28 years consistently and currently pays a quarterly dividend of $1.66 per share. The stock's dividend yield came in at 4.71% on October 2.
The number of hedge funds tracked by Insider Monkey owning stakes in International Business Machines Corporation (NYSE:IBM) grew to 51 in Q2 2023, from 49 in the previous quarter. The overall value of these stakes is roughly $814 million.
19. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 55
Year-to-Date Returns as of October 2: 11.48%
Cisco Systems, Inc. (NASDAQ:CSCO) is a California-based multinational tech company. It is a leading player in the information technology (IT) and networking industries, providing a wide range of products and services. The company pays a quarterly dividend of $0.39 per share for a dividend yield of 2.92%, as of October 2. It is one of the best dividend stocks on our list as the company has grown its dividends for 12 years straight.
With stakes worth over $1.4 billion, 55 hedge funds in Insider Monkey's database owned positions in Cisco Systems, Inc. (NASDAQ:CSCO) at the end of Q2 2023. With nearly 11 million shares, AQR Capital Management was the company's largest stakeholder in Q2.
18. Ecolab Inc. (NYSE:ECL)
Number of Hedge Fund Holders: 56
Year-to-Date Returns as of October 2: 12.74%
Ecolab Inc. (NYSE:ECL) is an American multinational corporation that specializes in providing water, hygiene, and energy technologies and services. On August 3, the company declared a quarterly dividend of $0.53 per share, which was consistent with its previous dividend. The company's dividend growth streak stands at 31 years, which places it as one of the best dividend stocks on our list. As of October 2, the stock has a dividend yield of 1.28%.
Of the 910 hedge funds in Insider Monkey's database at the end of Q2 2023, 56 funds owned investments in Ecolab Inc. (NYSE:ECL), up from 53 in the previous quarter. The collective value of these stakes is roughly $2.3 billion.
17. McKesson Corporation (NYSE:MCK)
Number of Hedge Fund Holders: 60
Year-to-Date Returns as of October 2: 17.01%
McKesson Corporation (NYSE:MCK) is one of the largest healthcare services and pharmaceutical distribution companies in the world. On July 24, the company announced a 15% hike in its quarterly dividend to $0.62 per share. This marked the company's seventh consecutive year of dividend growth, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 0.57%, as of October 2.
The number of hedge funds tracked by Insider Monkey owning stakes in McKesson Corporation (NYSE:MCK) stood at 60 in Q2 2023, which remained unchanged from the previous quarter. The consolidated value of these stakes is over $3.1 billion.
16. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 62
Year-to-Date Returns as of October 2: 2.76%
ConocoPhillips (NYSE:COP) is one of the world's largest independent exploration and production (E&P) companies in the energy sector. The company has raised its dividends every year since 2015, which makes it one of the best dividend stocks on our list. It offers a quarterly dividend of $0.51 per share and has a dividend yield of 3.91%, as of October 2.
As of the end of Q2 2023, 62 hedge funds in Insider Monkey's database reported having stakes in ConocoPhillips (NYSE:COP), worth collectively $2.6 billion. With nearly 15 million shares, Harris Associates was the company's leading stakeholder in Q2.
15. Lowe's Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 64
Year-to-Date Returns as of October 2: 0.13%
An American retail corporation, Lowe's Companies, Inc. (NYSE:LOW) has been growing its dividends consistently for the past 59 years. The company pays a quarterly dividend of $1.10 per share and has a dividend yield of 2.21%, as of October 2.
At the end of Q2 2023, 64 hedge funds tracked by Insider Monkey reported owning stakes in Lowe's Companies, Inc. (NYSE:LOW), compared with 67 in the previous quarter. The collective value of these stakes is over $3.7 billion. Among these hedge funds, Pershing Square was the company's leading stakeholder in Q2.
14. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 65
Year-to-Date Returns as of October 2: 6.73%
Analog Devices, Inc. (NASDAQ:ADI) is a leading global semiconductor company that specializes in designing, manufacturing, and marketing analog, mixed-signal, and digital signal processing (DSP) integrated circuits and solutions. The company offers a quarterly dividend of $0.86 per share and has a dividend yield of 1.98%. The company maintains a 20-year streak of consistent dividend growth.
At the end of the June quarter of 2023, 65 hedge funds owned stakes in Analog Devices, Inc. (NASDAQ:ADI), worth collectively over $5 billion.
Madison Investments mentioned Analog Devices, Inc. (NASDAQ:ADI) in its Q2 2023 investor letter. Here is what the firm has to say:
“The bottom five individual contributors for the quarter were U.S. Bancorp, Progressive, Analog Devices, Inc. (NASDAQ:ADI), Dollar Tree, and Danaher. Analog Devices and Danaher are both seeing end market demand moderate (in semiconductor and medical research, respectively) compared to the artificially high levels they experienced for two years due to the post-Covid chaos in supply chains. Despite these near-term dynamics, we think the longer-term outlooks remain excellent in both cases.”
13. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 66
Year-to-Date Returns as of October 2: 22.77%
Comcast Corporation (NASDAQ:CMCSA) is an American multinational telecommunications and media company that operates through several subsidiaries and divisions and offers a wide range of products and services. The company maintains a 15-year streak of consistent dividend growth and currently pays a quarterly dividend of $0.29 per share. As of October 2, the stock has a dividend yield of 2.66%.
As of the end of Q2 2023, 66 hedge funds tracked by Insider Monkey reported having stakes in Comcast Corporation (NASDAQ:CMCSA), compared with 68 in the previous quarter. The collective value of these stakes is over $3.14 billion.
12. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 67
Year-to-Date Returns as of October 2: 25.3%
Costco Wholesale Corporation (NASDAQ:COST) is a multinational retail corporation that operates a chain of membership-based warehouse club stores. The company offers a per-share dividend of $1.02 every quarter for a dividend yield of 0.72%, as of October 2. It has been rewarding shareholders with growing dividends for the past 19 years.
The number of hedge funds in Insider Monkey's database owning stakes in Costco Wholesale Corporation (NASDAQ:COST) grew to 67 in Q2 2023, from 63 in the previous quarter. The collective value of these stakes is over $2.24 billion.
RiverPark Advisors mentioned Costco Wholesale Corporation (NASDAQ:COST) in its Q2 2023 investor letter. Here is what the firm has to say:
“Costco Wholesale Corporation (NASDAQ:COST), founded in 1983, is the world’s third-largest retailer with 850 stores, $240 billion in revenue and 68 million members spread across North America, Europe, Asia, and the Southern Pacific Region. The company is known for its strong value proposition driven by high-quality low-cost offerings including a well-regarded private-label brand. Costco regularly ranks at the top of customer surveys related to brand trust, product price and quality, and all-around experience. Historically, 90% of the company’s shoppers renew their memberships, which generate more than 50% of operating income.
Through expanding market share, new store openings, increasing member productivity, and omnichannel expansion, we believe the company can grow revenues annually in the high single digit percentage range. This revenue growth should yield steadily growing margins and EPS growth in the low-to-mid-teens, which should drive shareholder returns in the same range.”
11. Linde plc (NYSE:LIN)
Number of Hedge Fund Holders: 70
Year-to-Date Returns as of October 2: 16.51%
Linde plc (NYSE:LIN) is a multinational industrial gases and engineering company that operates in various sectors, including industrial, healthcare, and specialty gases. The company's dividend growth streak currently stands at 28 years, which makes it one of the best dividend stocks on our list. It pays a quarterly dividend of $1.275 per share and has a dividend yield of 1.37%, as of October 2.
At the end of June 2023, 70 hedge funds tracked by Insider Monkey owned investments in Linde plc (NYSE:LIN), the same as in the previous quarter. The overall value of these stakes is more than $4.5 billion.
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Disclosure. None. Top 25 Dividend Stocks of 2023 is originally published on Insider Monkey.