10 Best Dividend Stocks to Buy in August
In this article, we will be looking at the 10 best dividend stocks to buy in August. If you want to skip our detailed analysis of these stocks, you can go directly to see the 5 Best Dividend Stocks to Buy in August.
Dividend stocks are among the more versatile investment options available to investors in light of the fact that they don't just offer income investors a stable and passive income stream to get them through retirement or times of financial strife, but also can be reinvested. The latter option ends up being a major reason why dividend stocks can be considered among the few that offer real value for money, especially in challenging times. According to Barclays, reinvested dividends actually end up contributing a great deal to the total return from equities, for instance, showcasing the fact that dividend stocks are not only highly impactful for individual portfolios, but also for the market at large. After all, it has also been estimated that between 1900 and 2000, the total return for the S&P 500 Index, which stood at 10.4%, was made up mostly by the return from dividends, which stood at 5.5% for this time period. The remaining 4.9% was then contributed by returns from price appreciation, but the point remains the same: dividend stocks are among the few that impact the market and portfolios, and are thus popular investment options to consider.
Like AT&T Inc. (NYSE: T), AbbVie Inc. (NYSE: ABBV), Target Corporation (NYSE: TGT), and Johnson & Johnson (NYSE: JNJ), many dividend stocks are among the most stable and reliable investments out there. Some of the better dividend stock picks one can consider can be found in the lists of the dividend kings, aristocrats, and champions. These stocks are those that have consistently increased their dividend yields for at least 50 years, in the case of the dividend kings, or 25 years, in the cases of the dividend aristocrats and champions. Hence, these stocks offer all the rewards of dividend stocks with lesser risk. For instance, the S&P Dividend Aristocrats Index, which is made up of these companies with consistently increased dividends, was estimated to have outperformed the S&P 500 Index for ten years between 2006 and 2015 by about 3% each year. Hence, in our list below, we have tried to ensure that most of the stocks mentioned were those that have managed to consistently increase or at least maintain their dividend yields for a decent time period.
We have also considered the yield of the dividend stocks mentioned on our list to ensure most of the stocks added were primarily higher-yielding stocks. Despite the fact that a high yield does not necessarily mean the stock is a better option as compared to others, it has been estimated by Heartland Funds in their 2014 report titled "Dividends: A Review of Historical Returns" that higher-yielding stocks were able to outperform their lower-yielding counterparts by about 1.7% each year between 1928 and 2013. Thus, we can lay the case that higher-yielding stocks can be considered good investment options for August 2021.
Dividend investing is becoming difficult by the day, even for 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). 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.
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Without further ado, let’s look at the 10 best dividend stocks to buy in August.
Best Dividend Stocks to Buy in August
10. Citigroup Inc. (NYSE: C)
Number of Hedge Fund Holders: 90 Dividend Yield: 3%
Citigroup Inc. (NYSE: C) is an investment banking company that operates across the globe to provide financial services. The company is headquartered in New York and ranks 10th on our list of the best dividend stocks to buy in August.
Piper Sandler continues to hold an Overweight rating on shares of Citigroup Inc. (NYSE: C), alongside a $91 price target placed on the stock by analyst Jeffery Harte this July.
In the second quarter of 2021, Citigroup Inc. (NYSE: C) had an EPS of $2.84, beating estimates by $0.95. The company’s revenue was $17.47 billion, also beating estimates by $273.99 million. Citigroup Inc. (NYSE: C) has also gained 10.8% in the past 6 months and 14.98% year to date.
By the end of the first quarter of 2021, 90 hedge funds out of the 866 tracked by Insider Monkey held stakes in Citigroup Inc. (NYSE: C) worth roughly $6.93 billion. This is compared to 95 hedge funds in the previous quarter with a total stake value of approximately $7.12 billion.
Like AT&T Inc. (NYSE: T), AbbVie Inc. (NYSE: ABBV), Target Corporation (NYSE: TGT), and Johnson & Johnson (NYSE: JNJ), Citigroup Inc. (NYSE: C) is a good stock to invest in.
9. Unum Group (NYSE: UNM)
Number of Hedge Fund Holders: 33 Dividend Yield: 4.2%
Unum Group (NYSE: UNM) is a Fortune 500 company that operates four businesses: Unum US, Unum UK, Unum Poland, and Colonial Life. The insurance company ranks 9th on our list of the best dividend stocks to buy in August.
JPMorgan and Citigroup hold Neutral ratings on shares of Unum Group (NYSE: UNM) while Barclays analyst Tracy Benguigui raised her price target on the stock to $26 this April. Additionally, Unum Group (NYSE: UNM) has raised its adjusted operating income per share view for the financial year of 2021 this July, reducing the decline from 5-6% to 1-3%.
In the second quarter of 2021, Unum Group (NYSE: UNM) had an EPS of $1.39, beating estimates by $0.27. The company’s revenue was $2.99 billion, up 0.16% year over year and also beating estimates by $31.96 million. Unum Group (NYSE: UNM) has also gained 4.9% in the past 6 months and 17.25% year to date.
By the end of the first quarter of 2021, 33 hedge funds out of the 866 tracked by Insider Monkey held stakes in Unum Group (NYSE: UNM) worth roughly $283 million. This is compared to 25 hedge funds in the previous quarter with a total stake value of approximately $218 million.
Like AT&T Inc. (NYSE: T), AbbVie Inc. (NYSE: ABBV), Target Corporation (NYSE: TGT), and Johnson & Johnson (NYSE: JNJ), Unum Group (NYSE: UNM) is a good stock to invest in.
8. Verizon Communications Inc. (NYSE: VZ)
Number of Hedge Fund Holders: 69 Dividend Yield: 4.5%
Verizon Communications Inc. (NYSE: VZ), a global telecommunication company based in the US, ranks 8th on our list of the best dividend stocks to buy in August. The company offers a range of communications products and services including internet services and wireless products to consumers across the world.
Colby Synesael, an analyst at Cowen, raised his price target on Verizon Communications Inc. (NYSE: VZ) shares this July. The new price target is $68, with the analyst also retaining an Outperform rating on shares of Verizon Communications Inc. (NYSE: VZ).
In the second quarter of 2021, Verizon Communications Inc. (NYSE: VZ) had an EPS of $1.37, beating estimates by $0.07. The company’s revenue was $33.76 billion, up 10.89% year over year and also beating estimates by $1.03 billion. Verizon Communications Inc. (NYSE: VZ) has also gained 0.59% in the past 6 months.
By the end of the first quarter of 2021, 69 hedge funds out of the 866 tracked by Insider Monkey held stakes in Verizon Communications Inc. (NYSE: VZ) worth roughly $11.4 billion. This is compared to 67 hedge funds in the previous quarter with a total stake value of approximately $10.5 billion.
Like AT&T Inc. (NYSE: T), AbbVie Inc. (NYSE: ABBV), Target Corporation (NYSE: TGT), and Johnson & Johnson (NYSE: JNJ), Verizon Communications Inc. (NYSE: VZ) is a good stock to invest in.
Miller/Howard Investments, an investment management firm, mentioned Verizon Communications Inc. (NYSE: VZ) in its first-quarter 2021 investor letter. Here is what they said:
“We sold Verizon (VZ) based on concerns over how much they might spend in ongoing spectrum auctions. Management may legitimately view spending billions of dollars to expand their spectrum holdings as necessary, but we believe the payoff will be slow and will make it challenging to grow the dividend at a good pace.”
7. AbbVie Inc. (NYSE: ABBV)
Number of Hedge Fund Holders: 72 Dividend Yield: 4.5%
AbbVie Inc. (NYSE: ABBV) is a publicly-traded biopharmaceutical company. It ranks 7th on our list of the best dividend stocks to buy in August and is based in North Chicago, Illinois.
Vamil Divan, an analyst at Mizuho, raised the price target on AbbVie Inc. (NYSE: ABBV) shares just this July. The analyst's new target is $131, and Divan has also held onto his Buy rating on the company's stock.
In the second quarter of 2021, AbbVie Inc. (NYSE: ABBV) had an EPS of $3.11, beating estimates by $0.08. The company’s revenue was $13.96 billion, up 33.9% year over year and also beating estimates by $322.64 million. AbbVie Inc. (NYSE: ABBV) has also gained 6.97% in the past 6 months and 10.68% year to date.
By the end of the first quarter of 2021, 72 hedge funds out of the 866 tracked by Insider Monkey held stakes in AbbVie Inc. (NYSE: ABBV) worth roughly $5.91 billion. This is compared to 83 hedge funds in the previous quarter with a total stake value of approximately $6.96 billion.
Like AT&T Inc. (NYSE: T), Target Corporation (NYSE: TGT), and Johnson & Johnson (NYSE: JNJ), AbbVie Inc. (NYSE: ABBV) is a good stock to invest in.
6. Universal Corporation (NYSE: UVV)
Number of Hedge Fund Holders: 10 Dividend Yield: 6.1%
Universal Corporation (NYSE: UVV), a tobacco company, is among the leaders in its industry and is headquartered in Richmond, Virginia. The company ranks 6th on our list of the best dividend stocks to buy in August.
This May, Universal Corporation (NYSE: UVV) CEO announced an increased quarterly dividend of $0.78 per share. The company also announced a $100 million share repurchase program and an agreement to acquire Silva International for $170 million.
In the fiscal fourth quarter of 2021, Universal Corporation (NYSE: UVV) had an EPS of $1.59, beating the previous quarter's EPS of $1.34. The company’s revenue was $490.24 million. Universal Corporation (NYSE: UVV) has also gained 8.13% in the past 6 months and 5.45% year to date.
By the end of the first quarter of 2021, 10 hedge funds out of the 866 tracked by Insider Monkey held stakes in Universal Corporation (NYSE: UVV) worth roughly $92.8 million. This is compared to 9 hedge funds in the previous quarter with a total stake value of approximately $89.5 million.
Like AT&T Inc. (NYSE: T), AbbVie Inc. (NYSE: ABBV), Target Corporation (NYSE: TGT), and Johnson & Johnson (NYSE: JNJ), Universal Corporation (NYSE: UVV) is a good stock to invest in.
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Disclosure: None. 10 Best Dividend Stocks to Buy in August is originally published on Insider Monkey.
