15 Dividend Knights that Beat the Market Last 5 Years

In this article, we discuss 15 dividend stocks that beat the market last five years. You can skip our detailed analysis of dividend investments and their performance over the years, and go directly to read 5 Dividend Knights that Beat The Market Last 5 Years

With the S&P 500 gaining 8.89% this year so far, the US stock market is showing signs of recovery. According to a recent report by Morgan Stanley, stocks could have a strong first half of the year despite lingering recession fears. However, the report also mentions that earnings may fall throughout the year. In these fluctuating conditions, investors rely on dividend-focused stocks to ensure regular means of income.

During the previous inflationary periods, dividend stocks held up well in comparison with other asset classes. Dividends represented 40% of the market since the 1940s and the ratio increased during decades when inflation was higher, as reported by Hartford Funds. The report also revealed the performance of dividend stocks in the 1970s, when they represented 73% of the S&P 500 returns. Various other reports show that dividends usually grow faster than inflation. One such research was carried out by Fidelity International which revealed that since 1900, the 10-year annual average growth in dividends across the S&p 500 outpaced CPI growth nearly 73% of the time.

Companies with strong dividend growth tracks and solid returns become investors’ choices as they prepare them for challenging periods. In addition to this, investors also pay attention to the company’s cash flow generation and sound balance sheet, which warrant future dividend payouts. McDonald's Corporation (NYSE:MCD), Roper Technologies, Inc. (NYSE:ROP), and Aflac Incorporated (NYSE:AFL) are some major companies that managed to raise their dividends for decades and also outperformed the broader market over the years. In this article, we will further discuss dividend knights that beat the market last five years.

15 Dividend Knights that Beat The Market Last 5 Years
15 Dividend Knights that Beat The Market Last 5 Years

Photo by Nick Chong on Unsplash

Our Methodology:

For this list, we selected dividend companies that have outperformed the S&P 500 in the past five years. These companies also have strong dividend growth track records under their belt. We also considered hedge fund sentiment around each stock using Insider Monkey's data for Q3 2022. The stocks are ranked in ascending order of their five-year returns.

15. Abbott Laboratories (NYSE:ABT)

5-Year Share Price Gains as of February 8: 95.8%

Abbott Laboratories (NYSE:ABT) is an American multinational medical device company that also specializes in other healthcare services. On December 9, the company declared an 8.5% hike in its quarterly dividend to $0.51 per share. Through this increase, the company's dividend growth streak reaches 51 years, which makes it one of the best dividend stocks on our list. The stock's dividend yield on February 8 came in at 1.82%.

In Q4 2022, Abbott Laboratories (NYSE:ABT) reported revenue of $10.1 billion, which fell by 12.2% from the same period last year. However, the company's sales for FY22 grew by 1.3% year-over-year. The stock gained 95.8% in the last five years, as of February 8. It outperformed the broader market during this period like other dividend stocks such as McDonald's Corporation (NYSE:MCD), Roper Technologies, Inc. (NYSE:ROP), and Aflac Incorporated (NYSE:AFL).

In January, Barclays lifted its price target on Abbott Laboratories (NYSE:ABT) to $125 with an Overweight rating on the shares, highlighting the company's improvement in medical device growth.

At the end of September, 62 hedge funds tracked by Insider Monkey reported having stakes in Abbott Laboratories (NYSE:ABT), up from 61 in the previous quarter. The collective value of these stakes is over $3 billion. Fisher Asset Management was the company’s leading stakeholder in Q3.

Distillate Capital mentioned Abbott Laboratories (NYSE:ABT) in its Q4 2022 investor letter. Here is what the firm has to say:

“The largest sector change in the rebalance was a six-percentage point increase in technology. The biggest component of this increase was the introduction of a 4% weight in Apple, which is discussed further below. Offsetting this increased tech weight was a 3-percentage point decrease in industrials and a two-percentage point decline in health care. The other two largest purchases includes Visa Inc. and Abbott Laboratories (NYSE:ABT) which likewise saw their valuations improve as their estimated free cash flows held up or improved while their enterprise values declined.”

14. Dover Corporation (NYSE:DOV)

5-Year Share Price Gains as of February 8: 99.1%

Dover Corporation (NYSE:DOV) is an Illinois-based company that specializes in the manufacturing of industrial products. In Q4 2022, the company posted revenue of $2.14 billion, which showed a 7.5% growth from the same period last year. At the end of December 2022, it had over $380.8 million available in cash and cash equivalents, and its total assets amounted to over $10.8 billion.

Dover Corporation (NYSE:DOV) currently offers a quarterly dividend of $0.505 per share and has a dividend yield of 1.29%, as of February 8. The company maintains one of the longest dividend growth streaks of 67 years. In the past five years, the stock outperformed the broader market, returning 99.1% to shareholders, as recorded on February 8.

Following the company's recent quarterly earnings and its solid performance during the quarter, Mizuho raised its price target on Dover Corporation (NYSE:DOV) to $165 with a Buy rating on the shares.

At the end of Q3 2022, 26 hedge funds tracked by Insider Monkey owned stakes in Dover Corporation (NYSE:DOV), compared with 30 in the previous quarter. These stakes have a consolidated value of $555.3 million.

13. Archer-Daniels-Midland Company (NYSE:ADM)

5-Year Share Price Gains as of February 8: 99.2%

Archer-Daniels-Midland Company (NYSE:ADM) is an American multinational food processing company that is headquartered in Ohio. Stifel raised its price target on the stock to $116 with a Buy rating on the shares. The firm presented a positive stance on the company's different segments.

Archer-Daniels-Midland Company's (NYSE:ADM) cash position remained strong during FY22. The company generated $5.3 billion in operating cash flow before working capital. During the year, it returned $2.3 billion to shareholders in dividends and share repurchases, which makes it one of the best dividend stocks on our list. The stock delivered a 99.2% return to shareholders in the last five years, versus a 58.9% return of the S&P 500, as of February 8.

Archer-Daniels-Midland Company (NYSE:ADM) currently offers a quarterly dividend of $0.45 per share, raising it by 12.5% on January 26. The company is a dividend king with 50 consecutive years of dividend growth. As of February 8, the stock has a dividend yield of 2.18%.

As of the close of Q3 2022, 37 hedge funds tracked by Insider Monkey reported owning stakes in Archer-Daniels-Midland Company (NYSE:ADM), compared with 42 in the previous quarter. These stakes are valued collectively at nearly $600 million.

Diamond Hill Capital mentioned Archer-Daniels-Midland Company (NYSE:ADM) in its Q1 2022 investor letter. Here is what the firm has to say:

ADM is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.”

12. Automatic Data Processing, Inc. (NASDAQ:ADP)

5-Year Share Price Gains as of February 8: 103.5%

Automatic Data Processing, Inc. (NASDAQ:ADP) is an American provider of cloud-based HR management solutions. In January, Barclays maintained an Overweight rating on the stock with a $278 price target. The firm updated the company's model following its recent quarterly results.

On January 11, Automatic Data Processing, Inc. (NASDAQ:ADP) declared a quarterly dividend of $1.25 per share, which fell in line with its previous dividend. The company has been raising its dividends consistently for the past 48 years. The stock's dividend yield on February 8 came in at 2.20%.

In the past five years, Automatic Data Processing, Inc. (NASDAQ:ADP) returned 103.5% to shareholders, as of February 8.

At the end of Q3 2022, 48 hedge funds tracked by Insider Monkey owned stakes in Automatic Data Processing, Inc. (NASDAQ:ADP), up from 39 in the previous quarter. These stakes are valued at over $3.7 billion collectively.

Carillon Tower Advisers mentioned Automatic Data Processing, Inc. (NASDAQ:ADP) in its Q3 2022 investor letter. Here is what the firm has to say:

“Despite a difficult macroeconomic environment, hiring trends have remained robust and Automatic Data Processing, Inc. (NASDAQ:ADP) shares reacted positively to strong quarterly earnings and guidance that was well above consensus expectations.”

11. NextEra Energy, Inc. (NYSE:NEE)

5-Year Share Price Gains as of February 8: 105.4%

Another one of the best dividend stocks on our list is NextEra Energy, Inc. (NYSE:NEE). The energy company remained popular among elite funds in Q3 2022, as 73 funds in Insider Monkey's database owned stakes in the company, up from 59 in the previous quarter. The collective value of these stakes is over $2.1 billion.

NextEra Energy, Inc. (NYSE:NEE) offers a per-share dividend of $0.425 every quarter for a dividend yield of 2.23%, as of February 8. The company has been raising its dividends consistently for the past 26 years.

NextEra Energy, Inc. (NYSE:NEE) delivered a 105.4 return to shareholders in the past five years, versus a 58.9% return of the wider market, as of February 8.

In January, Guggenheim maintained a Buy rating on NextEra Energy, Inc. (NYSE:NEE) with a $96 price target, appreciating the company's utility performance in the recent quarter.

ClearBridge Investments mentioned NextEra Energy, Inc. (NYSE:NEE) in its Q3 2022 investor letter. Here is what the firm has to say:

“NextEra Energy, Inc. (NYSE:NEE) is an integrated utility business with a regulated utility operating in Florida and the largest wind business in the U.S. NextEra’s regulated business includes Florida Power & Light, which serves nine million people in Florida. NextEra’s share price rose along with the passage of the U.S. Inflation Reduction Act, which considerably expands support for renewable energy.”

10. S&P Global Inc. (NYSE:SPGI)

5-Year Share Price Gains as of February 8: 109.08%

S&P Global Inc. (NYSE:SPGI) is a New York-based private banking company that specializes in financial information and analytics. Argus raised its price target on the stock to $380 in January with a Buy rating on the shares. The firm highlighted the company's focus on its growing financial businesses.

On January 25, S&P Global Inc. (NYSE:SPGI) announced a 5.9% increase in its quarterly dividend to $0.90 per share. This marked the company's 50th consecutive year of dividend growth. As of February 8, the stock has a dividend yield of 0.97%.

S&P Global Inc. (NYSE:SPGI), one of the best dividend stocks on our list, returned 109.08% in the past five years, as recorded on February 8.

As of the close of Q3 2022, 90 hedge funds tracked by Insider Monkey owned stakes in S&P Global Inc. (NYSE:SPGI), compared with 84 in the previous quarter. These stakes have a collective value of $6.2 billion. TCI Fund Management was the company’s largest stakeholder in Q3.

Andvari Associated mentioned S&P Global Inc. (NYSE:SPGI) in its Q4 2022 investor letter. Here is what the firm has to say:

S&P Global Inc. (NYSE:SPGI) is another company we own that is part of a duopoly in the business of credit rating. S&P and Moody’s have roughly equal market shares and rate more than 90% of all bonds worldwide. The service provides high value for the cost. A company that chooses to issue debt without a rating will pay an interest rate that could be higher by half of a percent. The cost of a higher interest rate far exceeds any savings gained by not using the services of S&P.

We think of S&P as a toll road that earns fees from its customers in exchange for cost-effective access to capital. As such, the company has extraordinary margins and pricing power and requires little of its own capital to grow. Even after fully reinvesting in its business, S&P still has an excess of cash. In 2021, S&P produced $3.5 billion of free cash from $8.3 billion of revenues. The company returns the majority of its free cash to investors in the form of dividends and share repurchases.”

9. Lowe's Companies, Inc. (NYSE:LOW)

5-Year Share Price Gains as of February 8: 120.9%

Lowe's Companies, Inc. (NYSE:LOW) is an American retail company that specializes in home improvement products and services. In the past five years, the stock delivered a 120.9% return to shareholders, outperforming the market by a wider margin, as of February 8.

In February, Barclays initiated its coverage of Lowe's Companies, Inc. (NYSE:LOW) with an Equal Weight rating and a $215 price target, presenting a positive stance on the sector's outlook for 2023.

Lowe's Companies, Inc. (NYSE:LOW) maintains a 59-year streak of consistent dividend growth, which makes it one of the best dividend stocks on our list. The company pays a quarterly dividend of $1.05 per share and has a dividend yield of 1.96%, as of February 8.

The number of hedge funds tracked by Insider Monkey owning stakes in Lowe’s Companies, Inc. (NYSE:LOW) grew to 61 in Q3 2022, from 53 in the previous quarter. These stakes are valued at over $5.3 billion collectively.

Pershing Square Holdings mentioned Lowe’s Companies, Inc. (NYSE:LOW) in its Q2 2022 investor letter. Here is what the firm has to say:

Lowe’s Companies, Inc. (NYSE:LOW)’s is a high-quality business with significant long-term earnings growth potential underpinned by a superb management team that is successfully executing a multi-faceted business transformation. (Click here to read the full text)

8. Linde plc (NYSE:LIN)

5-Year Share Price Gains as of February 8: 125.5%

Linde plc (NYSE:LIN) is a global multinational chemicals company, headquartered in Dublin, Ireland. The company offers a quarterly dividend of $1.17 per share and has a dividend yield of 1.39%, as of February 8. Its current dividend growth streak stands at 28 years. The stock's five-year return came in at 125.5%.

Though Linde plc (NYSE:LIN) reported a 4.8% year-over-year decline in its Q4 revenue at $7.9 billion, the company's adjusted operating profit of $2 billion showed a 9% growth from the same period last year. It generated over $2 billion in operating cash flow during the quarter and returned $1.26 billion to shareholders in dividends and share repurchases.

At the end of September, 56 hedge funds tracked by Insider Monkey reported owning stakes in Linde plc (NYSE:LIN), growing from 48 in the previous quarter. The collective value of these stakes is over $3.4 billion.

Madison Funds mentioned Linde plc (NYSE:LIN) in its Q4 2022 investor letter. Here is what the firm has to say:

“Linde plc (NYSE:LIN) stock was strong during the fourth quarter following a solid third quarter. Linde remains well positioned with the passage of the Inflation Reduction Act and energy transition with carbon dioxide sequestration opportunities, gasification services, and various hydrogen projects. Linde and Schlumberger announced that they entered into a collaboration of carbon capture, utilization, and sequestration (CCUS) projects to accelerate decarbonization solutions across industrial and energy sectors. The collaboration will combine decades of experience in carbon dioxide capture and sequestration. The collaboration will focus on hydrogen and ammonia production where carbon dioxide is a by-product. The International Energy Agency estimates that 6 Gigatons of carbon dioxide will need to be abated with CCUS in order to reach net zero by 2050. During the quarter, Linde also announced that it became a signatory to the United Nations Global Compact (UNGC), the world’s largest corporate sustainability initiative. As a signatory, Linde has committed to aligning its strategy and activities with the UNGC’s Ten Principles across human rights, labor, environment, and anti-corruption.”

7. Brown & Brown, Inc. (NYSE:BRO)

5-Year Share Price Gains as of February 8: 137.5%

Brown & Brown, Inc. (NYSE:BRO) is a Florida-based leading insurance brokerage company that provides risk management solutions to its consumers. In the past five years, the stock outperformed the market, returning 137.5% to shareholders, as of February 8.

On January 18, Brown & Brown, Inc. (NYSE:BRO) declared a quarterly dividend of $0.115 per share, which fell in line with its previous dividend. In 2022, the company raised its quarterly dividend for the 29th straight year. The stock has a dividend yield of 0.77%, as of February 8.

In January, BMO Capital initiated its coverage on Brown & Brown, Inc. (NYSE:BRO) with an Outperform rating and a $67 price target, calling the company its 'top pick' among brokers.

As per Insider Monkey's Q3 2022 database, 27 hedge funds owned stakes in Brown & Brown, Inc. (NYSE:BRO), worth $1.55 billion collectively. Among these hedge funds, Select Equity Group was the company’s leading stakeholder in Q3.

Madison Funds mentioned Brown & Brown, Inc. (NYSE:BRO) in its Q4 2022 investor letter. Here is what the firm has to say:

“The bottom five detractors for the quarter were Carlisle Companies, Brown & Brown, Inc. (NYSE:BRO), Brookfield, CarMax, and Armstrong World Industries. Brown & Brown continues to put up solid organic growth, although profitability was weaker than expected this quarter, for what we believe to be transitory issues.”

6. Target Corporation (NYSE:TGT)

5-Year Share Price Gains as of February 8: 141.2%

An American big-box department store chain, Target Corporation (NYSE:TGT) pays a quarterly dividend of $1.08 per share and has a dividend yield of 2.47%, as of February 8. The company's dividend growth streak of 51 years makes it one of the best options for long-term investors alongside some other dividend stocks like McDonald's Corporation (NYSE:MCD), Roper Technologies, Inc. (NYSE:ROP), and Aflac Incorporated (NYSE:AFL).

Barclays presented a positive outlook on retailers in the US in 2023. In this view, the firm initiated its coverage on Target Corporation (NYSE:TGT) with an Equal Weight rating and a $163 price target.

In the past five years, Target Corporation (NYSE:TGT) delivered a 141.2% return to shareholders, compared with a 58.9% return of the S&P 500, as of February 8.

At the end of September 2022, 52 hedge funds tracked by Insider Monkey owned investments in Target Corporation (NYSE:TGT), jumping from 46 a quarter earlier. The consolidated value of stakes owned by these funds is over $2 billion.

Madison Funds mentioned Target Corporation (NYSE:TGT) in its Q4 2022 investor letter. Here is what the firm has to say:

“Despite having already addressed excess inventories, Target Corporation (NYSE:TGT) reported a disappointing third quarter and further cut fourth quarter guidance. Although sales were slightly better than expected, Target saw a slowdown in discretionary sales. Gross margins were below expectations with higher markdowns, increased shrink, and incremental costs. Long-term, we expect Target to be able to return to operating margins in the 6% to 8% range as inventories return to normal levels as well as seeing a normalization in supply chain costs.”

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Disclosure. None. 15 Dividend Knights that Beat The Market Last 5 Years is originally published on Insider Monkey.