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In this article, we’ll discuss the 13 best diversified dividend stocks to invest in. You can also skip the detailed analysis of dividend stocks and their performance over the years and read directly. 5 Best Diversified Dividend Stocks to Invest in.
Diversified stocks refer to companies with exposure to different sectors, industries, and geographic regions. These are usually conglomerates that operate many businesses and make profits (think Warren Buffett’s Berkshire Hathaway). The purpose of diversification is to reduce risk by spreading your investments across a variety of assets, minimizing the impact if a single stock or sector performs poorly. In 2023, global stock markets experienced significant growth, with Wall Street’s impressive performance drawing particular attention. The US stock market, the world’s largest, led the way with a particularly impressive rise. The S&P 500 index rose 24.2% in 2023, and the Nasdaq index recorded a significant increase of 43.4%, the highest annual percentage increase since 2020. Contrary to initial expectations, the economy was able to avoid recession, and the rise in the stock market exceeded many expectations. . However, analysts have different views on the future of the stock market in 2024, and the outlook for this year is mixed.
Based on the positive trends observed last year, analysts are optimistic about the outlook for the stock market this year, although some declines are expected along the way. JPMorgan’s report notes that lower U.S. inflation and the possibility of the Federal Reserve adopting more accommodative policy are increasing talk of a “soft landing” rather than a deep economic downturn or bear market. suggested. Leading indicators point to a slowdown in growth, but not a complete collapse. Stock markets generally tend to reach their lowest points well before economic conditions reach their worst, but there are exceptions like the dot-com cycle. Although there is still a risk of a recession next year, the key point is that even if a recession were to occur, it would likely be a moderate one, especially given the support the Fed is providing the banking system through increased liquidity. This means that there is a high possibility that it will become a thing. The report further stated that S&P 500 earnings will remain stagnant overall in 2023. However, while the rest of the S&P 500 fell by 5%, the seven largest companies saw a hefty 33% increase. Looking ahead to 2024, we expect a year marked by slower GDP growth, single-digit earnings growth, and single-digit returns for the typical S&P 500 stock.
Investors should consider a diversified portfolio of cash, long-term government bonds, high-quality corporate bonds and stocks, JPMorgan analysts said. They are also attracted to the industrial and energy sectors, particularly due to the influence of US industrial policy. Analysts have a positive attitude toward the energy sector, primarily because it continues to offer attractive opportunities for earnings, dividends, and share buybacks.
According to Bloomberg’s 2024 Outlook report, many analysts favor dividend stocks as investments this year. A Capital Group strategist said:
“As investors get caught up in the artificial intelligence frenzy, valuations for high-dividend stocks have quietly trended to multi-decade lows relative to the broader market. is expected to be more likely, dividends may play a more important role in enhancing investors’ total returns.”
As mentioned earlier, diversified companies play an important role in reducing risk. By investing in a diversified portfolio of dividend-paying companies across a variety of sectors, investors can spread risk and reduce exposure to the performance of a single company or industry. Additionally, companies that pay dividends tend to be more mature and financially sound because they prioritize returning profits to shareholders. General Electric Company (NYSE:GE), Danaher Corporation (NYSE:DHR), and Johnson & Johnson (NYSE:JNJ) are some of the best diversified dividend stocks discussed below.
Photo by Sharon McCutcheon on Unsplash
Our methodology:
For this list, we scanned the Insider Monkey database for Q4 2023 and selected conglomerate companies that specialize in several different businesses and pay regular dividends to their shareholders. This list is ranked by the number of hedge funds that own shares in the companies. The top 10 consensus stocks selected by hedge funds have outperformed the S&P 500 index by more than 140 percentage points over the past 10 years (Please see here for the detail).
13. Unilever PLC (NYSE:UL)
Number of hedge fund holders: 25 people
Unilever PLC (NYSE:UL) is a London-based multinational consumer goods company with operations in various sectors of the consumer goods industry, including food and beverages, cleaning products, and beauty and personal care products. On February 8, the company announced a quarterly dividend of $0.4582 per American Depositary Share (ADS). As of February 21st, the dividend yield of the stock was 3.63%. One of the best diversified dividend stocks on our list.
As of the end of Q4 2023, 25 hedge funds tracked by Insider Monkey reported owning shares of Unilever PLC (NYSE:UL), up from 21 in the previous quarter. The consolidated value of these shares is approximately $751 million. Fisher Asset Management, with approximately 11 million shares, became the company’s major shareholder in the fourth quarter.
12. Church & Dwight Co., Ltd. (NYSE:CHD)
Number of hedge fund holders: 30 people
Church & Dwight Co., Inc. (NYSE:CHD) is an American consumer packaged goods company principally engaged in the manufacturing, marketing and distribution of a wide range of household and personal care products. The company announced on February 2nd that it will increase its quarterly dividend by 4.1% to $0.2838 per share. This dividend increase gives the company its 28th consecutive annual dividend increase, making CHD one of the best dividend stocks on our list. As of February 21st, the dividend yield of the stock was 1.15%.
As of the end of the fourth quarter of 2023, 30 hedge funds in Insider Monkey’s database reported owning shares of Church & Dwight Co. (NYSE:CHD), up from 33 in the previous quarter. There was a slight decrease from the company. The total value of these shares is over $1.05 billion.
11. Carlyle Companies Incorporated (NYSE:CSL)
Number of hedge fund holders: 35 people
Carlyle Companies Incorporated (NYSE:CSL) is next on our list of best dividend stocks. This diversified industrial company operates through multiple segments and provides a wide range of products and solutions to various industries. On January 30, the company announced a quarterly dividend of $0.85 per share, the same level as its previous dividend. Overall, it has maintained an impressive 47 consecutive years of dividend growth. The dividend yield as of February 21st is 0.98%.
According to Insider Monkey’s database, 35 hedge funds held shares in Carlyle Companies, Inc. (NYSE:CSL) at the end of December 2023, compared to 37 in the previous quarter. The total value of these stakes is more than $765.4 million. Among these hedge funds, Generation Investment Management was the company’s major shareholder in the fourth quarter.
10. Corning Inc. (NYSE:GLW)
Number of hedge fund holders: 37 people
Corning Incorporated (NYSE:GLW) is a multi-segment American multinational technology company best known for its expertise in specialty glasses, ceramics, and related materials. Corning products and solutions are used in a variety of industries, including communications, display technology, environmental technology, life sciences, and automotive.
Corning Incorporated (NYSE:GLW) is one of the best dividend stocks on our list, currently offering a quarterly dividend of $0.28 per share. The company has raised its dividend for the past 13 consecutive years. As of February 21st, the stock’s dividend yield is 3.49%.
The number of hedge funds tracked by Insider Monkey that own Corning Incorporated (NYSE:GLW) stock jumped to 37 in the fourth quarter of 2023, up from 24 in the previous quarter. These stakes are worth a total of more than $234 million.
9. TE Connectivity Ltd. (NYSE:TEL)
Number of hedge fund holders: 42 people
TE Connectivity Ltd. (NYSE:TEL) is a global technology company that designs and manufactures a wide range of connectivity and sensor solutions. The company operates in several major segments and serves a variety of industries, including automotive, aerospace, defense, industrial, data communications, telecommunications, consumer electronics, energy, and healthcare.
On February 14, TE Connectivity Ltd. (NYSE:TEL) announced a quarterly dividend of $0.59 per share, in line with its previous dividend. Overall, the company has increased its dividend over the past nine years, making TEL one of the best diversified dividend stocks on our list. As of February 21st, the dividend yield of the stock was 1.69%.
According to Insider Monkey’s Q4 2023 database, 42 hedge funds hold shares in TE Connectivity Ltd. (NYSE:TEL), compared to 46 in the previous quarter. The consolidated value of these shares is more than $2.03 billion.
8. Emerson Electric Co. (NYSE:EMR)
Number of hedge fund holders: 50 people
Emerson Electric Co. (NYSE:EMR) is a Missouri-based technology and engineering company that provides solutions for industrial, commercial, and residential markets. The company has 67 years of solid dividend growth, making it one of the best dividend stocks on our list. It currently pays a quarterly dividend of $0.525 per share, giving it a dividend yield of 2.01% as of February 21st.
According to Insider Monkey’s Q4 2023 database, 50 hedge funds hold shares in Emerson Electric Co. (NYSE:EMR), down from 53 in the previous quarter. The total value of these shares is more than $1.44 billion. Adage Capital Management holds over 3.5 million shares of his stock and was the company’s major shareholder in the fourth quarter.
7. Colgate-Palmolive Company (NYSE:CL)
Number of hedge fund holders: 54 people
Colgate-Palmolive Company (NYSE:CL) is a multinational consumer products company specializing in the manufacturing, distribution, and marketing of oral care, personal care, home care, and pet nutrition products. The company pays a quarterly dividend of $0.48 per share as of February 21, giving it a dividend yield of 2.25%. The company has maintained consistent dividend growth for 61 consecutive years, making it one of the best dividend stocks on our list.
According to Insider Monkey’s Q4 2023 database, 54 hedge funds hold shares in Colgate-Palmolive Company (NYSE:CL), up from 52 in the previous quarter. The total value of these stakes is approximately $3 billion.
6. Honeywell International, Inc. (NYSE:HON)
Number of hedge fund holders: 55 people
Honeywell International Inc. (NYSE:HON) is a diversified technology and manufacturing company with operations in various sectors, providing products and services for a wide range of industries and applications. The company has increased its dividend 14 times in 13 consecutive years, making it one of the best dividend stocks on our list. The company currently has a quarterly dividend of $1.08 per share as of February 21st, giving it a dividend yield of 2.16%.
According to Insider Monkey’s database, Honeywell International (NYSE:HON) was in 55 hedge fund portfolios at the end of Q4 2023, compared to 60 in the previous quarter. The total amount of stock held by these hedge funds is $1.6 billion. Among these hedge funds, the company’s most significant shareholder in the 4th quarter was Adage Capital Management.
Click to keep reading to see the 5 best diversified dividend stocks to invest in.
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Disclosure. none. 13 The best diversified dividend stocks for investment Originally published on Insider Monkey.
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