In this article, we discuss 10 high-yield dividend stocks popular on Robinhood. If you want to see more stocks in this selection, click 5 High-Yield Dividend Stocks Popular on Robinhood.
This earnings season, investors are relentlessly dumping stocks that either post below consensus earnings, disclose top and bottom line misses, or do not reaffirm a positive guidance for the rest of the year. The stock market seems bearish, since about 77% of S&P 500 constituents have reported market-beating Q1 earnings, yet the benchmark is consistently down, dropping over 18% in 2022 so far.
High yield dividend stocks act as sanctuaries for investors amid a turbulent stock market, since share price gains in a portfolio are unlikely in a macro backdrop plagued with inflation, possible recession, war, and rising rates. Investors tend to gravitate towards high yield stocks to get passive income and secure their investments, since these companies usually have strong fundamentals and stay on top of their performance to be able to keep up their dividend policy and maintain the trust of their stakeholders.
We picked the dividend stocks most popular on the famous investing app Robinhood, ensuring that the selected securities yield over 3% as of May 20. Business fundamentals, Q1 earnings, and analyst ratings have been listed to provide potential investors with a detailed overview of the stocks.
We also used Insider Monkey's Q4 database of 924 hedge funds to assess the sentiment of elite investors about these stocks. Insider Monkey believes replicating the stock picks of the smart money is a wise strategy.
Photo by Joshua Hoehne on Unsplash
High-Yield Dividend Stocks Popular on Robinhood
10. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 83
Dividend Yield as of May 20: 3.10%
Pfizer Inc. (NYSE:PFE) is an American multinational biopharmaceutical company that manufactures and markets medicines and vaccines in multiple therapeutic areas. Pfizer Inc. (NYSE:PFE)’s dividend yield on May 20 came in at 3.10%, and it is one of the 100 most popular stocks traded on Robinhood.
On May 3, Pfizer Inc. (NYSE:PFE) reported earnings for Q1, posting an EPS of $1.62, exceeding market estimates by $0.05. Revenue for the period grew approximately 76% year-over-year to $25.66 billion, outperforming Street forecasts by $927.11 million.
Pfizer Inc. (NYSE:PFE) declared a $0.40 per share quarterly dividend on April 28, in line with previous. The dividend is payable on June 10, to shareholders of record as of May 13. Pfizer Inc. (NYSE:PFE) has a 12-year history of consistently increasing dividend payments.
Pfizer Inc. (NYSE:PFE) and Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) announced on May 10 that they have entered into an agreement under which Pfizer Inc. (NYSE:PFE) will acquire Biohaven, the manufacturer of NURTEC ODT, a dual migraine drug approved for the acute treatment and prevention of migraine in adults. Under this agreement, Pfizer Inc. (NYSE:PFE) will acquire all outstanding shares of Biohaven for $148.50 per share in an all-cash transaction.
Wells Fargo analyst Mohit Bansal on May 4 maintained an Overweight rating on Pfizer Inc. (NYSE:PFE) and lowered the price target on the stock to $55 from $60. The analyst thinks buy-side expectations have declined significantly for a COVID tail and investors have started focusing on the company's primary business again. Despite core operations facing tough comps this year, Pfizer Inc. (NYSE:PFE)'s operations display a growth rate of about 5%, the analyst noted.
According to the fourth quarter database of Insider Monkey, Pfizer Inc. (NYSE:PFE) was found in the public stock portfolios of 83 hedge funds, up from 74 funds in the last quarter. Cliff Asness’ AQR Capital Management held a significant stake in Pfizer Inc. (NYSE:PFE) in Q1 2022, with 10.70 million shares worth over $554 million.
In addition to Exxon Mobil Corporation (NYSE:XOM), Altria Group, Inc. (NYSE:MO), and Intel Corporation (NASDAQ:INTC), institutional investors are piling into Pfizer Inc. (NYSE:PFE).
Here is what ClearBridge Investments Value Equity Strategy has to say about Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.”
9. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 70
Dividend Yield as of May 20: 5.48%
AT&T Inc. (NYSE:T) is an American provider of telecommunications, media, and technology services worldwide. AT&T Inc. (NYSE:T) declared on March 25 a $0.2775 per share quarterly dividend, in line with the company's already announced annual dividend of $1.11 per share ahead of the WarnerMedia spin-off transaction. The dividend was distributed to shareholders on May 2. With a dividend yield of 5.48% as of May 20, AT&T Inc. (NYSE:T) is one of the most popular high-yield dividend stocks on Robinhood.
On April 21, AT&T Inc. (NYSE:T) posted earnings for the first fiscal quarter of 2022. The company announced an EPS of $0.77, beating market consensus estimates by $0.02. The revenue of $38.11 billion dropped 13.28% year-over-year and came in below Street estimates by $129.79 million.
Goldman Sachs analyst Brett Feldman on April 25 reinstated coverage of AT&T Inc. (NYSE:T) with a Buy rating and a $23 price target, reflecting a potential total return of 23.5%, including the company's 5.7% dividend yield. According to the analyst, AT&T Inc. (NYSE:T)’s communications-focused business and adjusted capital allocation priorities after its recent asset disposal and spin-off of WarnerMedia optimally positions it to invest in primary growth opportunities in fiber and 5G, and "sustain more durable trends" in revenues and adjusted earnings. The analyst also sees the stock's valuation as attractive, especially compared to its large cap peers, such as Verizon Communications Inc. (NYSE:VZ).
According to Insider Monkey’s Q4 data, AT&T Inc. (NYSE:T) was found in the public stock portfolios of 70 hedge funds, up from 66 funds in Q3. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held a leading position in AT&T Inc. (NYSE:T) in Q1 2022, with 28.7 million shares worth $678.5 million. Here is what Broyhill Asset Management has to say about Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter:
“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
8. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 107
Dividend Yield as of May 20: 3.43%
JPMorgan Chase & Co. (NYSE:JPM) is an American multinational investment bank and financial services holding company, operating through Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management segments. JPMorgan Chase & Co. (NYSE:JPM) has an 11-year history of consistently increasing dividend payments to shareholders.
On May 16, JPMorgan Chase & Co. (NYSE:JPM) declared a $1.00 per share quarterly dividend, in line with previous. The dividend is payable on July 31, to shareholders of the company as of July 6. JPMorgan Chase & Co. (NYSE:JPM)’s dividend yield on May 20 stood at 3.43%.
Jefferies analyst Ken Usdin on May 13 maintained a Hold rating on JPMorgan Chase & Co. (NYSE:JPM) and lowered the price target on the shares to $125 from $141 after lowering his 2023 EPS estimate to $12.50 from $13.20 ahead of the company's investor day scheduled for May 23. The analyst expected a reiteration of the 17% medium-term ROTCE and 13% CET1 targets on the investor day, noting that JPMorgan Chase & Co. (NYSE:JPM)’s medium-term targets "look achievable, but likely beyond '23". The growth rate comparisons will be tough for 2022 following a "strong" 2021, the analyst added.
According to Insider Monkey’s Q4 database, 107 elite hedge funds were long JPMorgan Chase & Co. (NYSE:JPM), up from 101 funds in the last quarter. At the end of Q1 2022, Ken Fisher’s Fisher Asset Management disclosed a prominent stake in JPMorgan Chase & Co. (NYSE:JPM), with 7.76 million shares worth $1.05 billion.
“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.
“In our view, inflation will not just be a 2021 phenomenon.”
Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”
7. Energy Transfer LP (NYSE:ET)
Number of Hedge Fund Holders: 36
Dividend Yield as of May 20: 7.26%
Energy Transfer LP (NYSE:ET) is one of the most popularly traded high dividend stocks on Robinhood, offering a dividend yield of 7.26% as of May 20. Energy Transfer LP (NYSE:ET) is a Texas-based energy firm that offers natural gas transportation pipelines and natural gas storage facilities.
Morgan Stanley analyst Robert Kad on April 26 raised the price target on Energy Transfer LP (NYSE:ET) to $15 from $12 and reiterated an Overweight rating on the shares. He remains bullish on the midstream sector for the rest of 2022 and generally expects robust Q1 results and constructive management outlooks, owing to the strong commodity backdrop, the analyst told investors.
On April 26, Energy Transfer LP (NYSE:ET) announced a $0.20 per share quarterly dividend, a 14.3% increase from its prior dividend of $0.175. The dividend was paid on May 19, to shareholders of the company as of May 9. Energy Transfer LP (NYSE:ET)’s dividend yield is significantly higher than the average energy yield of 4.24%, and the company also posted above consensus earnings and revenue for Q1 2022.
Among the hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 36 funds were long Energy Transfer LP (NYSE:ET), up from 29 funds in the earlier quarter. David Abrams’ Abrams Capital Management is a prominent shareholder of the company in Q1 2022, with more than 22 million shares worth $247.5 million.
Like Exxon Mobil Corporation (NYSE:XOM), Altria Group, Inc. (NYSE:MO), and Intel Corporation (NASDAQ:INTC), Energy Transfer LP (NYSE:ET) is a high-yield dividend stock popular on Robinhood.
“Energy Transfer LP (ET) rose over the period along with the price of oil climbing 40.59% over the period. The company received positive news that the Dakota Access Pipeline project would not be shut down while the Environmental Impact Statement by the US Army Corps of Engineers is drawn up. Energy Transfer reported strong 1Q results with revenue of $17B surpassing expectations for $11.8B with adjusted earnings before income, taxes, depreciation and amortization (EBITDA) hitting $5.04B ahead of consensus of $2.77B. The company raised full year adjusted EBITDA guidance to $12.9-13.3B from $10.6-11.0B previously, with the increase largely related to the benefits realized from Winter Storm Uri. The company paid down $3.7B in debt during the quarter, using strong cash flow to reduce leverage. The company also announced the issuance of $900M in 6.5% Series H perpetual preferreds with the company using the proceeds to repay debt and for general purposes.”
6. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 72
Dividend Yield as of May 20: 3.57%
Intel Corporation (NASDAQ:INTC) is a California-based company that designs and manufactures computer products and technologies worldwide. Intel Corporation (NASDAQ:INTC) posted on April 28 its Q1 results, reporting earnings per share of $0.87, beating analysts’ estimates by $0.08. The revenue of $18.35 billion also outperformed Street estimates by $29.36 million.
Intel Corporation (NASDAQ:INTC) on April 14 declared a $0.365 per share quarterly dividend, in line with previous. The dividend is payable on June 1, to shareholders of record as of May 7. Intel Corporation (NASDAQ:INTC)’s dividend yield on May 20 stood at 3.57%.
On April 29, Northland analyst Gus Richard maintained an Outperform rating with a $62 price target on Intel Corporation (NASDAQ:INTC) shares. The analyst observed that Intel Corporation (NASDAQ:INTC) surpassed estimates in Q1, reaffirmed its $76 billion revenue guidance for 2022, and raised its non-GAAP 2022 EPS guidance by 10c, which he sees as "slightly in excess" of the 7c upside in the prior quarter. The analyst believes that Intel Corporation (NASDAQ:INTC) has been guiding conservatively for a while and is likely to outperform Q2 estimates, and the risk to full-year guidance depends on macro challenges beyond the company's control.
According to Insider Monkey’s data, Intel Corporation (NASDAQ:INTC) was found in 72 public hedge fund portfolios at the end of Q4 2021, up from 66 funds in the preceding quarter. At the conclusion of the first quarter of 2022, Seth Klarman’s Baupost Group held a leading stake in Intel Corporation (NASDAQ:INTC), with 16.5 million shares worth $822.3 million.
Here is what O’Keefe Stevens Advisory has to say about Intel Corporation (NASDAQ:INTC) in its Q1 2022 investor letter:
“Intel announced they are removing stock-based compensation from non-GAAP earnings in 2022 to report results aligning with semiconductor peers. This may seem like a reasonable thing to do as comparability between peers becomes easier. On the other hand, what exactly is the point of adjusted earnings? It is not to conform to some industry norm or because the management teams need to make performance metrics. The point of adjusting earnings is to present results in a light that more closely reflects the actual underlying performance of the business. That is, backing out expenses that might be one-time in nature, such as legal or fire expenses. First off, share-based compensation is an actual expense. Decreasing my ownership stake in a company without receiving any compensation is not free. If a company paid its employees in all stock, would they add back the entire SBC? What a margin profile that would be. Second, should a company be worried about reporting results similar to other companies? Every company is unique. Management should not waste time determining what expenses should be excluded. Run the business, don’t worry about adjusting the numbers.”
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Disclosure: None. 10 High-Yield Dividend Stocks Popular on Robinhood is originally published on Insider Monkey.