In this article, we will consider the top 10 dividend stocks for 2021. You can skip our detailed discussion on the merits of investing in dividends and move on to the top 5 dividend stocks for 2021.
Dividend investment remains one of the best ways to make money from stock exchanges, especially in times of crisis. Dividends help create protection against portfolio losses when stock prices are falling. The data shows that dividend-paying companies produced stronger returns when compared to shares without dividends. According to a report by Raymond James, from the 1930s to 2010, compound dividends averaged about 50% of total stock returns. The report also looked at around 1000 stocks and found that high-yield dividend stocks delivered stronger returns with less risk compared to low-yield stocks.
Best dividend actions for 2021
The data also shows that dividends represent a decent share of Americans’ personal income. According to a report by S&P Global, in 2011, dividend revenue was 6.12% of personal income per capita, compared to 4.16% in the previous 10 years and 3.58% in the previous 20 years. The report also shows that from 1926 to December 2012, dividend revenue represented 34% of the total monthly returns on the S&P 500. The report cites a detailed study by Fuller and Goldstein that examined the returns on dividend payments and non-payment of dividends. shares during the period from 1970 to December 2007. The results showed that shares with dividend payment outperformed shares with no further dividends during turbulent times.
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Our readers know that when it comes to dividends, we prefer consistency over higher yields. A company that is consistent in its dividend payments and raises has an extremely low chance of initiating a dividend cut. On the other hand, companies with higher incomes generally do not invest in the growth of their products in the long term and tend to falter in times of crisis. Based on this criterion, we created our popular lists, such as 30 dividend champions from 2021 and the main dividend kings for 2021. However, in this article, our criterion is at an ideal point that selects high yields and strong growth prospects at long term. You will find several dividend stocks for 2021 on our list, which have a history of consecutive years of dividend increases. Stocks without consecutive highs on our list still offer promising growth opportunities for the future, along with high yields.
In addition, we only choose shares with dividends that have a yield greater than 3%.
Diversifying your portfolio and investing in strong dividend stocks is extremely important, especially during turbulent times like this, when even smart money is struggling. The hedge fund industry’s reputation has been tarnished in the past decade, during which its hedged returns failed to keep up with the hedged returns of market indices. On the other hand, Insider Monkey research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017. Between March 2017 and February 5, 2021, our stock choices returned 187.5%, against 75.8% for SPY. Our stock choices outperformed the market by more than 111 percentage points (see the details here) We were also able to identify in advance a select group of hedge fund holdings that underperformed the market significantly. We have followed and shared the list of these actions since February 2017 and they lost 13% by November 16. That is why we believe that hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can sign up for our free newsletter on our homepage to receive our stories in your inbox.
Let’s start our list of the top 10 dividend stocks for 2021.
10. Holly Energy Partners, LP (NYSE: HEP)
Dividend Yield: 7.22% Number of hedge fund holders: 3
Holly Energy ranks 10th on our list of the top 10 dividend stocks for 2021. It is a Texas-based company that offers products and services in the oil industry, including storage tanks, distribution terminals, rack facilities and processing refinery. In the fourth quarter, the company felt a negative impact from the coronavirus crisis, recording a negative EBITDA of $ 111.5 million in the period for its refining segment, compared to $ 171.6 million in the same period last year. In January 2021, the company declared a quarterly dividend of $ 0.35 per share, equal to the previous quarter.
At the end of the fourth quarter, 3 hedge funds in the Insider Monkey database of 887 funds held stakes in Holly Energy. Marshall Wace LLP is the company’s largest shareholder, with 33,654 shares, worth $ 478,000.
9. National Health Investors, Inc. (NYSE: NHI)
Dividend yield: 5.96% Number of hedge fund holders: 13
Self-managed REIT National Health Investors Inc offers services such as sale-leaseback, JVs, mortgages, mezzanine financing and real estate transactions. In the fourth quarter, the company increased AFFO per share by 3.7% and dividends by 5%. It ranks 9th on our list of the top 10 dividend stocks for 2021.
The company is also catching the eye of smart money, as 13 hedge funds monitored by Insider Monkey reported holding stakes in the company at the end of the fourth quarter, against 12 funds in the previous quarter.
8. Realty Income Corporation (NYSE: O)
Dividend yield: 4.55% Number of hedge fund holders: 24
Realty Income Corporation is one of the best dividend stocks for 2021. REIT buys and sells properties and offers services such as portfolio management, asset management, credit and real estate research. The company said in February that it expects a strong acquisition volume of more than $ 3.25 billion, or $ 3.44- $ 3.49 per share in terms of FFO, in 2021, above analysts’ average estimate of $ 3.43. The company recently purchased a portfolio of gas stations and convenience stores with 21 assets in Hawaii from Par Pacific Holdings for $ 109.4 million.
With a $ 61.4 million stake in Realty Income Corp., Two Sigma Advisors holds 987,364 shares in the company at the end of the fourth quarter of 2020. Our database shows that 24 hedge funds held stakes in Realty Income Corp. at the end of the fourth quarter.
7. Enbridge Inc. (NYSE: ENB)
Dividend Yield: 7.24% Number of hedge fund holders: 28
The energy transportation company is one of the best dividend stocks for 2021, with a dividend yield of more than 7% and more than 65 years of dividend payments. In December 2020, the company reaffirmed its perspective of 5% -7% average annual growth in long-term distributable cash flow per share.
At the end of the fourth quarter, there were 28 hedge funds in the Insider Monkey database with holdings in Enbridge, compared with 25 funds in the third quarter. Marshall Wace LLP, with 1.3 million shares, is the company’s largest shareholder.
6. LP corporate product partners (NYSE: EPD)
Dividend Yield: 7.73% Number of hedge fund holders: 30
With a dividend yield of 7% and more than 20 consecutive years of dividend increases, the oil and gas pipeline company Enterprise Products is one of the top 10 dividend stocks to buy for 2021. The company recently said during a meeting with investors that he is thinking of reusing several pipelines to deal with different commodities, while reducing new investments while awaiting the current market uncertainty.
Appaloosa Management LP is one of 30 hedge funds monitored by Insider Monkey with stakes in EPD at the end of the fourth quarter. The fund owns more than 3.45 million shares in the company.
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Disclosure: None. 10 best dividend stocks for 2021 is originally published in Insider Monkey.