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10 Best Dividend Stocks on Robinhood

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·11 min read
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In this article, we will take a look at the 10 best dividend stocks on Robinhood. You can skip our comprehensive analysis of these stocks’ outlook in 2021 and go directly to the 5 Best Dividend Stocks on Robinhood.

The coronavirus outbreak led to unprecedented economic events that resulted in a spike in unemployment rates all over the world. Having a diversified investment portfolio comes in handy during these trying times. Dividend investors had a hard time in 2020 where many companies announced the suspension of dividend payments such as The Walt Disney Company (NYSE: DIS), AMC Entertainment Holdings, Inc. (NYSE: AMC), and Expedia Group, Inc. (NASDAQ: EXPE). On the other hand, some companies continued distributing dividend payments in a reduced amount such as oil and gas giants Royal Dutch Shell plc (NYSE: RDS-A), Occidental Petroleum Corporation (NYSE: OXY), and BP p.l.c. (NYSE: BP).

The Robinhood Stock Craze

Last year, the world saw in awe as hundreds of thousands of individual investors, fueled by online communities, initiated a short squeeze and waged a war against hedge funds. Stock trading app Robinhood was at the center of this drama. The California-based startup, which pioneered the zero-commission stock trading, became the focus of the controversy after it decided to freeze trades for GameStop Corp. (NYSE: GME) on Jan. 28, when GME traded at its all-time high at $483 a share. As of May 2020, Robinhood had approximately 13 million active users. Despite the controversies, individual investors using Robinhood, online communities and trading platforms worth a lot of attention. These investors often put a lot of effort researching stock ideas. That's why in this article we are doing to discuss some of the best dividend stocks on Robinhood. These stocks are not only popular on Robinhood, but also have strong fundamentals, dividend yields and decent dividend history.

According to Robinhood’s leaderboard, the most popular dividend stocks are from technology, cyclical products, healthcare, and cannabis industries. In general, Robinhood traders are into momentum stocks such as motion picture theater operator AMC Entertainment Holdings, Inc. (NYSE: AMC) and video game retailer GameStop Corp. (NYSE: GME), which have stopped paying dividends to investors in March 2020 and March 2019 respectively. But traders are Robinhood are also piling into famous dividend stocks that have years of steady dividend hikes and strong financials.

Robinhood Dividend Stocks

One interesting dividend-paying stock to look at is cigarette manufacturer Altria Group, Inc. (NYSE: MO). The current annualized dividend rate for the company is $3.44 per common share, with a high dividend yield of 6.97%. Altria Group, Inc. (NYSE: MO) is one of the most popular stocks in Robinhood due to its exposure to the cannabis industry. In 2018, the cigarette company purchased a 45% stake of Canadian cannabis manufacturer Cronos Group Inc. (NASDAQ: CRON) for $2.4 billion intending to benefit from Canada’s legalization of recreational use for marijuana. Altria Group, Inc. (NYSE: MO) jumped 38% over the past twelve months.

Another of the best dividend stocks to check out on Robinhood is petroleum company Exxon Mobil Corporation (NYSE: XOM). The company pays a dividend of $0.87 per share yielding at 5.74%. Exxon Mobil Corporation (NYSE: XOM) is seeking potential partners on its $100 billion carbon capture project in Houston, Texas, that could gain market value as much as $2 trillion by 2040 as forecasted. Shares of XOM increased 40% over the past twelve months.

Investors in Robinhood admire tech stocks that pay dividends, and Microsoft (NASDAQ: MSFT) is one of them. The Washington-based multinational tech company Microsoft Corporation (NASDAQ: MSFT) is one of the best dividend stocks on Robinhood. The company’s revenue in the first quarter came in at $37.2 billion, up 12% from the same period last year. Microsoft Corporation’s productivity software business grew to 47 million personal and family subscribers. The company’s cloud computing segment Microsoft Azure, gaming console Xbox, and operating system Windows also grew in the first quarter of the fiscal year 2021. Aside from the massive growth capacity of the company, Robinhood investors like Microsoft Corporation (NASDAQ: MSFT) as a dependable dividend stock. The tech behemoth announced a quarterly dividend of $0.56 per share in September 2020, up to five cents or 10% from the previous quarter's dividend. The stock has gained 35% in the last twelve months.

Finding valuable stocks is becoming difficult by the day amid financial volatility that isn’t sparing even the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th, 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

 Best Dividend Stocks on Robinhood
Best Dividend Stocks on Robinhood

Photo by MayoFi on Unsplash

With this context in mind, here is our list of the 10 best dividend stocks on Robinhood.

Best Dividend Stocks on Robinhood

10. Constellation Brands, Inc. (NYSE: STZ)

Number of Hedge Fund Holders: 58 Dividend Yield: 1.3%

International alcohol beverage manufacturer Constellation Brands, Inc. (NYSE: STZ) is one of the best dividend stocks on Robinhood. In April, the company increased its dividend quarterly payout to $0.76 per share from $0.75 per share in the previous quarter. Aside from the company’s booming beer and spirit business, Constellation Brands, Inc. owns about 39% of Canadian marijuana firm Canopy Growth Corporation (NASDAQ: CGC), which makes the company one of the fastest-growing cannabis stocks to invest in. Revenue increased by just over 3% to $8.6 billion for the year, while adjusted earnings-per-share increased from $9.12 to $9.97.

Constellation Brands, Inc. (NYSE: STZ) has a market cap of $45 billion. The company’s net income for the fiscal year 2021 came in at $4.5 billion, up from $4.15 billion in 2020. Shares of STZ jumped 46% over the past twelve months. At the end of the fourth quarter of 2020, 58 hedge funds in the database of Insider Monkey held stakes worth $1.76 billion in Constellation Brands, Inc. (NYSE: STZ) which is an increase from 53 hedge funds in the previous quarter holding stakes worth $2.19 billion.

9. AT&T Inc. (NYSE: T)

Number of Hedge Fund Holders: 58 Dividend Yield: 6.46%

American telecommunication giant AT&T Inc. (NYSE: T) ranks 9th in our list of 10 best dividend stocks on Robinhood. Due to its relative stability, brand recognition, and high yield, AT&T (NYSE: T) has been a common dividend stock for many years. The telecom company is a dividend aristocrat as it has raised its dividend annually for at least 25 consecutive years and currently yields at 6.46%. The company pays an annualized dividend of $2.08 per share. The Dallas-based company offers telecommunication, technology, and media services worldwide.

The company has a market cap of $230 billion. The company’s revenue in the first quarter came in at $43.9 billion. Both the communications and media segment contributed to an increase in revenue for the quarter as AT&T Inc. (NYSE: T) added 595,000 wireless phone subscribers and totaled nearly 64 million HBO Max subscribers globally. Shares of T climbed 12.7% over the past twelve months.

At the end of the fourth quarter of 2020, 58 hedge funds in the database of Insider Monkey held stakes worth $1.04 billion in AT&T Inc. (NYSE: T) which is an increase from 51 hedge funds in the previous quarter holding stakes worth $1.16 billion.

Nelson Capital Management, in its Q1 2021 investor letter, mentioned AT&T Inc. (NYSE: T). Here is what the fund said:

"Nelson Capital stayed busy i n t he first quarter, making several adjustments within our core portfolio. In the communication services sector, we sold AT&T (tkr: T). Over the years, AT&T has made several poor acquisitions, especially in the content realm, leaving the company saddled with debt and unable to change directions.”

8. The Coca-Cola Company (NYSE: KO)

Number of Hedge Fund Holders: 62 Dividend Yield: 3.09%

The Coca-Cola Company (NYSE: KO), which is also a part of our list of best dividend kings of 2021, ranks 8th in our list of 10 best dividend stocks on Robinhood. The Georgia-based beverage maker has increased its dividend for 59 consecutive years. The Coca-Cola Company (NYSE: KO) pays a quarterly dividend of $0.42 per share with a yield of 3.09%. The company has been producing soft drinks, enhanced water, juice, sports drink, and dairy for the last 135 years.

The Coca-Cola Company (NYSE: KO) has a market cap of $235 billion. The company’s revenue for the first quarter came in at $9 billion, up 5% from $8.6 billion in the year-ago quarter. On average, Wall Street analysts have rated The Coca-Cola Company (NYSE: KO) a “Moderate Buy” with a $60 price target. Shares of KO jumped 25% over the past twelve months.

At the end of the fourth quarter of 2020, 62 hedge funds in the database of Insider Monkey held stakes worth $24.7 billion in The Coca-Cola Company (NYSE: KO) which is an increase from 60 hedge funds in the previous quarter holding stakes worth $22 billion.

7. Pfizer Inc. (NYSE: PFE)

Number of Hedge Fund Holders: 63 Dividend Yield: 3.93%

New York-based pharmaceutical firm Pfizer Inc. (NYSE: PFE) is another best dividend stock on Robinhood. Pfizer Inc.’s dividend yield has comfortably surpassed 4% for the majority of the last 18 months. The company currently pays an annualized dividend of $1.56 per share with a yield of 3.90%. Shares of PFE jumped 15% over the past three months.

The company has a market cap of $224 billion. Pfizer Inc. (NYSE: PFE) disclosed in its first-quarter results that the company is expecting a full-year revenue for the COVID-19 vaccine of approximately $26 billion in 2021. In the first quarter, the company’s revenue was $14.6 billion, up 45% from $4.2 billion to the prior-year quarter. Pfizer Inc. (NYSE: PFE) will continue to supply COVID-19 vaccines to Canada and Israel in 2021. On May 10, Morgan Stanley raised its price target for Pfizer to $42 from $38 but kept its Equal-Weight rating.

There were 63 hedge funds that reported owning stakes in Pfizer Inc. (NYSE: PFE) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $1.85 billion.

6. Exxon Mobil Corporation (NYSE: XOM)

Number of Hedge Fund Holders: 63 Dividend Yield: 5.74%

Texas-based petroleum giant Exxon Mobil Corporation (NYSE: XOM) ranks 6th in our list of 10 best dividend stocks on Robinhood. Exxon Mobil Corporation offers a high-yielding dividend that pays dividend share annually for $3.48 per share. Exxon Mobil Corporation's downstream and chemical segments generate a significant portion of the company's earnings in addition to its upstream business.

The company has a market cap of $257 billion. Exxon reported first-quarter earnings per share of 65 cents on revenue of $59.15 billion, exceeding analyst expectations. Shares of XOM increased 45% over the past twelve months. On May 5, DZ Bank upgraded Exxon Mobil Corporation from a "Hold" rating to a "Buy" rating, with a $67 price target.

At the end of the fourth quarter of 2020, 63 hedge funds in the database of Insider Monkey held stakes worth $2.21 billion in Exxon Mobil Corporation (NYSE: XOM) which is an increase from 52 hedge funds in the previous quarter holding stakes worth $1.38 billion.

Like Altria Group, Inc. (NYSE: MO), XOM is one of the best dividend stocks to buy on Robinhood. Harding Loevner, in its Q1 2021 investor letter, mentioned Exxon Mobil Corporation (NYSE: XOM). Here is what Harding Loevner has to say in its letter:

"We felt that our remaining energy holding, ExxonMobil, with its stronger balance sheet, was in a better position to ride out the cyclical slump in oil demand and even perhaps take advantage of it by investing counter-cyclically. While ExxonMobil does plan to increase capital expenditure, we’ve been disappointed in its regrettable failure to address ongoing emission trends, which reflects poorly on management’s foresight. As a result, we sold our ExxonMobil holdings.”

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Disclosure: None. 10 Best Dividend Stocks on Robinhood is originally published on Insider Monkey.