In this article, we take 10 best dividend stocks for 2021. You can skip our detailed discussion on the benefits of dividend investing and move on to 5 best dividend stocks for 2021.
Dividend investing remains one of the best ways to make money from the stock markets, especially in difficult times. Dividends help create a buffer against portfolio losses when stock prices fall. Data show that dividend-paying companies delivered a stronger return compared to non-dividend stocks. According to a Raymond James report, compounded dividends averaged about 50% of total returns from the 1930s to 2010. The report also analyzed about 1,000 stocks and concluded that high-yield dividend stocks delivered stronger returns. has less risk compared to low-yield stocks.
Best Dividend Shares for 2021
Data also shows that dividends make up a decent portion of Americans’ personal income. According to a report by S&P Global, dividend income from 2011 was 6.12% of per capita personal income, compared to 4.16% in the previous ten years and 3.58% during the previous 20 years. The report also shows that dividend income from 1926 to December 2012 accounts for 34% of the monthly total returns of the S&P 500. The report cites a detailed study by Fuller and Goldstein that examined the returns on dividend-paying and non-dividend-paying shares during the period 1970 to December 2007. The results showed that dividend-paying stocks outperformed non-dividend stocks during turbulent times.
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Our readers know that it is consistent rather than higher returns when it comes to dividends. A company that is consistent in its dividend payments and increases has an extremely low chance of starting a dividend reduction. On the other hand, higher-yield companies usually do not invest in their long-term growth of products and often falter during times of crisis. Based on this criterion, we have created our popular lists like 30 Dividend Champions of 2021 and Top Dividend Kings for 2021. In this article, however, our criterion is on a sweet spot that opts for both high yields and strong long-term growth prospects. You will find several dividend shares for 2021 in our list with a record of consecutive years of dividend increases. The stocks without successive rises in our list continue to offer promising growth opportunities for the future, coupled with high returns.
In addition, we only selected the dividend stocks that have a return of more than 3%.
Diversifying your portfolio and investing in strong dividend stocks is extremely important, especially in turbulent times like these when even the smart money is struggling. The reputation of the hedge fund industry has been tarnished over the past decade, during which its hedged returns could not keep pace with the uncovered returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge funds that have outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017. Between March 2017 and February 5, 2021, we selected monthly newsletter shares. 187.5%, compared to 75.8% for the SPY. Our stock market outperforms the market by 111 percentage points (see the details here). We were also able to identify in advance a select group of hedge funds that outperformed the market significantly. We have been following the list of these stocks since February 2017 and share them by 13% until November 16th. Therefore, we believe that the hedge fund 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.
Let’s start with our list of 10 best dividend stocks for 2021.
10. Holly Energy Partners, LP (NYSE: HEP)
Dividend yield: 7.22% Number of hedge fund holders: 3
Holly Energy ranks tenth in our list of 10 best dividend stocks for 2021. It is a Texas-based company offering products and services in the petroleum industry, including storage tanks, distribution terminal, stretching facilities and refinery processing. In the fourth quarter, the company negatively impacted the coronavirus crisis and posted a negative EBITDA of $ 111.5 million in the period for its refinement segment, compared to $ 171.6 million in the previous year. In January 2021, the company declared a quarterly dividend of $ 0.35 per share, the same as the previous quarter.
At the end of the fourth quarter, three hedge funds in the 887 fund’s Insider Monkey database had an interest in Holly Energy. Marshall Wace LLP is the largest stakeholder in the company, with 33,654 shares, valued at $ 478,000.
9. National Health Investors, Inc. (NYSE: NGV)
Dividend yield: 5.96% Number of holders of hedge funds: 13
Self-managed REIT National Health Investors Inc offers services such as leaseback, mortgage repayment, mortgage lending, furniture financing and real estate transactions. In the fourth quarter, the company increased AFFO per share by 3.7% and its dividend by 5%. It ranks 9th in our list of 10 best dividend stocks for 2021.
The company is also attracting attention from the smart money, as 13 hedge funds tracked by Insider Monkey reported at the end of the fourth quarter that they owned in the company, compared to 12 funds a quarter earlier.
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 until 2021. The REIT buys and sells properties and offers services such as portfolio management, asset management, credit and real estate. 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 the average analysis estimate of $ 3. 43. The company recently purchased a 21-asset gas station and a portfolio of stores in Hawaii from Par Pacific Holdings for $ 109.4 million.
With a $ 61.4 million stake in Realty Income Corp, Two Sigma Advisors owned 987,364 shares of the company at the end of the fourth quarter of 2020. Our database shows that 24 hedge funds owned shares in Realty Income Corp at the end of the the fourth quarter.
7. Enbridge Inc. (NYSE: ENB)
Dividend yield: 7.24% Number of hedge fund holders: 28
Energy transport business 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 confirmed its outlook for 5% -7% average long-term annual distributable cash flow per share growth.
At the end of the fourth quarter, there were 28 hedge funds in Insider Monkey’s database that had an interest in Enbridge, compared to 25 funds in the third quarter. Marshall Wace LLP, with 1.3 million shares, is the largest stakeholder in the company.
6. Enterprise Products Partners LP (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 ten dividend stocks to buy for 2021. The company recently said in a meeting with investors that it consider redeploying multiple pipelines to handle different commodities while reducing new investments as it waits for the current uncertainty in the market.
Appaloosa Management MP is one of the 30 hedge funds that Insider Monkey owns in EPD at the end of the fourth quarter. The fund owns more than 3.45 million shares of the company.
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Disclosure: None. 10 best dividend shares for 2021 is originally published on Insider Monkey.