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Dividend Aristocrats have passed the test of time. By definition, each one of them has raised their dividend payout for 25 or more consecutive years, including through the Great Recession. For a company to raise its dividend so consistently, it has to have a wide moat, shareholder-friendly management, and substantial competitive advantages, making them safe bets over long periods of time.
In this article, we’ve compiled a list of Dividend Aristocrats that the smart money tracked by Insider Monkey was collectively bullish on in the second quarter, as the ownership of them among those investors rose during the period. Without further elaboration, let’s take a closer look at those stocks, which are Archer Daniels Midland Company (NYSE:ADM), Chevron Corporation (NYSE:CVX), Abbott Laboratories (NYSE:ABT), AT&T Inc. (NYSE:T), and Wal-Mart Stores, Inc. (NYSE:WMT).
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
#5 Archer Daniels Midland Company (NYSE:ADM)
– Number of Hedge Fund Shareholders (as of June 30): 26
– Total Value of Hedge Funds’ Holdings (as of June 30): $779.93 million
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 3.10%
According to our database of 749 successful hedge funds which filed 13Fs for the June quarter, 26 were long Archer Daniels Midland Company (NYSE:ADM) at the end of June, up by two from the end of March. One of the funds that bought a new stake in Archer Daniels during the second quarter was Dmitry Balyasny‘s Balyasny Asset Management, which initiated a position of 797,160 shares worth over $34.19 million on June 30. One reason the smart money likes Archer Daniels is indeed for the company’s rather attractive quarterly dividend of $0.30 per share, good for a 2.83% forward yield. Another reason is that Archer Daniels’ payout is very dependable. The company has been increasing its dividend for 40-straight years and its management has plenty of room to raise it even further, given the payout ratio of just 51.1%. Due to a growing global population and wealthier middle class, demand for ADM’s products will likely continue to grow in the decades to come and its dividend will likely grow along with it.
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#4 Abbott Laboratories (NYSE:ABT)
– Number of Hedge Fund Shareholders (as of June 30): 47
– Total Value of Hedge Funds’ Holdings (as of June 30): $1.61 billion
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 2.80%
Abbott Laboratories (NYSE:ABT) has one of the best dividend track records in the drug industry, having raised its payout for 43-straight years. Due to that history, Abbott now pays $1.04 per share to its shareholders annually, good for a 2.46% yield. With a payout ratio of just 47.3%, a growing population of elderly people in the U.S., increasing prescription prices, and rising coverage, it is a good bet that Abbott will likely continue to inch up its dividend in the years to come. 47 funds in our database were long Abbott Laboratories (NYSE:ABT) at the end of June, up by five funds quarter-over-quarter.
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The next page contains three more Dividend Aristocrats that hedge funds were loving in the second quarter.
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