13 Best Long-Term Dividend Stocks To Buy Now
In this article, we will take a detailed look at the 13 Best Long-Term Dividend Stocks To Buy Now. For a quick overview of such stocks, read our article 5 Best Long-Term Dividend Stocks To Buy Now.
Dividend-paying companies with strong fundamentals and dividend growth history are expected to keep gaining traction as investors come to terms with the reality of the financial markets where volatility and uncertainty is far from over. Earlier this month, Drew Matus, chief market strategist at MetLife Investment Management, said while talking to CNBC that when he looks at job numbers and other economic data he still expects a recession in 2024. Matus said unemployment is rising fast in several states of the US and if someone would "land on Planet Earth" and look at the US economy, they would expect the Federal Reserve to start raising interest rates instead of cutting them.
That's why in their 2024 outlook reports several investment firms highlighted the importance of dividend stocks that can weather recession and market turbulence. For example, according to Bloomberg, Franklin Templeton said in its 2024 outlook that dividend-paying companies with strong cash flows become attractive during market volatility but these companies are less prone to face weakness even during down cycles. Financial planning company Nuveen also said that amid valuation issues, it is not extremely positive on large-cap stocks but it is bullish on dividend growers.
Image by Steve Buissinne from Pixabay
Methodology
For this article we consulted several credible investing-related websites to see what are the best long-term dividend stocks to buy now according to mainstream financial media, analysts and experts. From our research we selected 13 dividend stocks which are the most popular in the financial media these days. These stocks have decades of consistent dividend growth and strong fundamentals to sustain these dividends. The list is ranked in ascending order of the number of hedge fund investors. Why? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
13. US Bancorp (NYSE:USB)
Number of Hedge Fund Investors: 29
With 14 years of consistent dividend growth, US Bancorp (NYSE:USB) is one of the top dividend growth stocks that are popular among analysts and investors.
US Bancorp (NYSE:USB) has a dividend yield of about 4.6%.
As of the end of the third quarter of 2023, 29 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in US Bancorp (NYSE:USB). The biggest stakeholder of US Bancorp (NYSE:USB) was Jean-Marie Eveillard's First Eagle Investment Management which owns a $295 million stake in US Bancorp (NYSE:USB).
Aristotle Value Equity Strategy stated the following regarding U.S. Bancorp (NYSE:USB) in its fourth quarter 2023 investor letter:
“Headquartered in Minneapolis, Minnesota, and with origins dating back to 1863, U.S. Bancorp (NYSE:USB) is a diversified regional bank that operates over 2,400 branches across 26 states, primarily in the Western and Midwestern U.S. As of September 30, 2023, the company had $668 billion in assets, over $518 billion in deposits and more than $375 billion in loans, making it the fifth-largest retail bank in the country.
The bank offers a variety of services, including retail as well as commercial banking, credit cards, investment management and trust services. At the end of 2022, USB acquired Union Bank from Mitsubishi UFJ Financial (also a Value Equity holding) for approximately $8 billion, adding $82 billion in assets to its balance sheet. This was the bank’s biggest acquisition since 2001 and provides the company with a larger presence on the West Coast, particularly in California…” (Click here to read the full text)
12. Coca-Cola Co (NYSE:KO)
Number of Hedge Fund Investors: 57
The Coca-Cola Company (NYSE:KO) is one of the most favorite stocks of billionaires (including Warren Buffett), money managers and analysts. The stock has 61 consecutive years of dividend growth.
Hayden Capital made the following comment about The Coca-Cola Company (NYSE:KO) in its third 2023 investor letter:
“It’s not just emerging markets either, where one could argue a “scarcity premium” given fewer quality public companies. Even in the US, The Coca-Cola Company (NYSE:KO) trades at ~30x P/E despite having the same earnings as 10 years ago.
Both of these companies actually have lower revenues than 10 – 15 years ago too, indicating that their profit growth is mostly from margin expansion. This can only last for so long before there’s no more excess expenses left to cut.
I find it ironic that all these companies trade as “bond-equivalents” in the minds of investors – even commanding lower yields than US treasuries, the safest security in the world. But it’s clear that their businesses are not nearly as safe. Coca-Cola is facing disruption risk from consumers shifting to new, heathier beverage brands.
But these companies are ~35% more expensive than US Treasuries, despite the heightened risk. On a risk-adjusted basis, one could argue the implied premium is even higher.”
Perhaps the explanation is simply the price volatility difference between these stocks and treasuries over the last two years. For example, 10-year Treasury bonds are down ~-20% since the beginning of 2022. By comparison, KO and PG are remarkably down only -4 – 6% over that time frame.”
11. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Investors: 65
Operating in the ever-green consumer defensive sector, Costco Wholesale Corporation (NASDAQ:COST) is one of the best long-term dividend stocks to buy now according to mainstream financial media and analysts.
Tsai Capital Corporation stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its fourth quarter 2023 investor letter:
“Costco Wholesale Corporation (NASDAQ:COST) ($660.08 – up 49.0% for the year. Recent high $681.91): Costco operates more than 860 warehouses worldwide and provides its members with a deep value proposition, promising not to charge more than a 15% markup on goods versus its own cost. This in turn has resulted in an extremely loyal membership base of more than 70 million, over $1,900 in net sales per square foot, and high-margin, recurring membership fees. Since 2012, W. Craig Jelinek has been at the helm of Costco and has perpetuated the values and culture of the company’s founder, Jim Sinegal. And while Mr. Jelinek recently stepped down as Chief Executive Officer, we see little change under his successor, Ron Vachris, who has worked at the firm for more than 40 years, having started out as a forklift driver. In many ways, Costco is a cult (I mean that in a positive way), and its allure is only just beginning to spread to international markets, including China. With a stellar management team, strong returns on capital and ample opportunities for growth, domestically and internationally, we believe Costco will continue to compound earnings at a low double-digit rate.”
10. McDonald's Corp (NYSE:MCD)
Number of Hedge Fund Investors: 70
McDonald’s Corporation (NYSE:MCD) dividend growth streak is about to reach five decades now. As of January 29 the stock had a dividend yield of about 2.29%
Carillon Eagle Mid Cap Growth Fund made the following comment about McDonald’s Corporation (NYSE:MCD) in its Q3 2023 investor letter:
“McDonald’s Corporation (NYSE:MCD) stock paused its upwards share price movement after its strong gain in the second quarter. The company’s same-store comparable sales performed better than expected in the second quarter, which relieved investors by suggesting that global consumer’s purchasing strength remains healthy.”
9. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Investors: 72
With 36 years of consistent dividend increases, oil giant Chevron Corporation (NYSE:CVX) ranks ninth in our list of the best long-term dividend stocks to buy now according to financial media.
A total of 72 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Chevron Corporation (NYSE:CVX). The biggest stakeholder of Chevron Corporation (NYSE:CVX) was Warren Buffett's Berkshire Hathaway which owns an $18 billion stake in Chevron Corporation (NYSE:CVX).
Earlier this month, Chevron Corporation (NYSE:CVX) stock was upgraded to Buy from Hold with a price target of $184.
Ariel Focus Fund made the following comment about Chevron Corporation (NYSE:CVX) in its third 2023 investor letter:
“Also in the quarter, we initiated a position in Chevron Corporation (NYSE:CVX), the second largest integrated energy company in the U.S., operating in exploration, production and refining on a global scale. We view the company as competitively advantaged with a strong balance sheet, sustainable growth pathway and an effective management team. Going forward CVX expects improved cost efficiencies and production growth via its differentiated position in the Permian Basin and recent acquisition of Noble Energy. Additionally, management believes a combination of its new higher-margin projects along with operational improvements will drive a double-digit return of capital employed by 2027. Although oil and gas prices, which lay outside of the company’s control, ultimately dictate Chevron’s earnings and cashflow profile, the organization is laser focused on capital discipline. It is this lack of predictability, and potential fear of a global recession which presented us with an opportunity to initiate a position in this high barrier to entry producer at reasonable prices.”
8. AbbVie Inc (NYSE:ABBV)
Number of Hedge Fund Investors: 73
With a 3.7% dividend increase and history of 25+ years of consistent dividend increases, AbbVie Inc (NYSE:ABBV) ranks eighth in our list of the best long-term dividend stocks to buy.
In December, Goldman Sachs upgraded the stock to Buy from Neutral with a $173 price target.
As of the end of the third quarter of 2023, 73 hedge funds tracked by Insider Monkey had stakes in AbbVie Inc (NYSE:ABBV).
Carillon Eagle Mid Cap Growth Fund made the following comment about AbbVie Inc. (NYSE:ABBV) in its Q3 2023 investor letter:
“AbbVie Inc. (NYSE:ABBV) reported strong, broad-based second-quarter performance that exceeded analysts’ expectations. The company’s raised guidance was a nice recovery after its mildly disappointing first-quarter report.”
7. Procter & Gamble Co (NYSE:PG)
Number of Hedge Fund Investors: 75
The Procter & Gamble Company (NYSE:PG) is one of the most popular long-term dividend stocks to buy now. The company has 67 consecutive years of dividend increases under its belt.
Hayden Capital made the following comment about The Procter & Gamble Company (NYSE:PG) in its third 2023 investor letter:
“It’s not just emerging markets either, where one could argue a “scarcity premium” given fewer quality public companies. Even in the US, Coca-Cola trades at ~30x P/E despite having the same earnings as 10 years ago. The Procter & Gamble Company (NYSE:PG) is likewise at ~27x P/E, with earnings only ~12% higher than a decade ago (or a ~1% annual growth rate). This equates to a mere 3.3% – 3.7% earnings yield.
Both of these companies actually have lower revenues than 10 – 15 years ago too, indicating that their profit growth is mostly from margin expansion. This can only last for so long before there’s no more excess expenses left to cut.
I find it ironic that all these companies trade as “bond-equivalents” in the minds of investors – even commanding lower yields than US treasuries, the safest security in the world. But it’s clear that their businesses are not nearly as safe. Proctor & Gamble is facing disruption from direct-to-consumer brands that offer their products for a fraction of the price.
But these companies are ~35% more expensive than US Treasuries, despite the heightened risk. On a risk-adjusted basis, one could argue the implied premium is even higher.
Perhaps the explanation is simply the price volatility difference between these stocks and treasuries over the last two years. For example, 10-year Treasury bonds are down ~-20% since the beginning of 2022. By comparison, KO and PG are remarkably down only -4 – 6% over that time frame.”
6. Exxon Mobil Corp (NYSE:XOM)
Number of Hedge Fund Investors: 79
With four decades of consistent dividend increases and a dominant position in the lucrative oil industry, Exxon Mobil Corp (NYSE:XOM) is one of the best dividend stocks to buy and hold for the long term.
Exxon Mobil Corp (NYSE:XOM) has a dividend yield of about 3.6% as of January 28. Recently, TD Cowen upgraded the stock to Outperform from Market Perform with a price target of $115.
TD Cowen said the stock has a “more compelling upside as the stock has declined with an unchanged valuation.”
“XOM has been investing in low-cost projects, improving downstream competitiveness, and taking cost out of its business, driving down the oil price needed to organically cover its dividend,” Cowen added.
As of the end of the third quarter of 2023, 79 hedge funds tracked by Insider Monkey had stakes in Exxon Mobil Corp (NYSE:XOM).
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Disclosure. None. 13 Best Long-Term Dividend Stocks To Buy Now was initially published on Insider Monkey.
