10 best dividend-paying stocks for 2021

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In this article, we’ll take the top 10 dividend-paying stocks for 2021. You can skip our in-depth discussion of the merits of dividend investing and check out the top 5 dividend-paying stocks for 2021.

Investing in dividends remains one of the best ways to make money in the stock markets, especially in times of difficulty. Dividends help create protection against portfolio losses when stock prices fall. Data shows that dividend-paying companies have produced higher returns than stocks without dividends. According to a report by Raymond James, from the 1930s to 2010, compound dividends averaged about 50% of total stock return. The report also analyzed around 1,000 stocks and concluded that high yielding dividend stocks offered higher returns with less risk compared to low yielding stocks.

Best dividend stocks for 2021

The data also shows that dividends are a decent portion of Americans’ personal income. According to a report by S&P Global, in 2011, dividend income represented 6.12% of personal income per capita, compared to 4.16% in the previous 10 years and 3.58% in the previous 20 years. The report also shows that from 1926 to December 2012, dividend income represented 34% of the S&P 500’s total monthly returns. The report cites a detailed study by Fuller and Goldstein that looked at dividend and non-dividend yields. stocks during the period 1970 to December 2007. The results showed that dividend-paying stocks outperformed dividend-free stocks more during times of turbulence.

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Our readers know that when it comes to dividends, we prefer consistency over higher returns. A company that is consistent in its payouts and dividend increases has an extremely low chance of initiating a dividend cut. On the other hand, companies with higher returns generally do not invest in the growth of their products over the long term and are often hesitant in times of crisis. Based on this criterion, we have created our popular lists such as 30 Dividend Champions in 2021 and Top Dividend Kings in 2021. However, in this article our criterion is on a sweet spot that selects both high yields and strong long-term growth prospects. You will find several dividend stocks for 2021 in our list that have a history of consecutive years of dividend increases. The stocks with no consecutive rise in our list still offer promising growth opportunities for the future as well as high returns.

In addition, we have chosen only dividend-paying stocks with a yield above 3%.

It’s vitally important to diversify your portfolio and invest in solid dividend paying stocks, especially during times of turbulence like these when even smart money is in trouble. The reputation of the hedge fund industry has been tarnished over the past decade, during which its hedged returns have failed to keep pace with the unhedged returns of stock indexes. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by more than 88 percentage points since March 2017. Between March 2017 and February 5, 2021 , stock selections from our monthly newsletter returned 187.5%, compared to 75.8% for the spy. Our stock picks outperformed the market by over 111 percentage points (see details here). We were also able to identify in advance a select group of hedge fund stocks that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they have lost 13% until November 16. This is why we believe that 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 get our stories delivered to your inbox.

Let’s start our list of the 10 best dividend paying stocks for 2021.

10. Holly Energy Partners, LP (NYSE: HEP)

Dividend yield: 7.22% Number of hedge fund holders: 3

Holly Energy ranks 10th in our list of the 10 best dividend-paying stocks for 2021. It is a Texas-based company that provides products and services in the petroleum industry, including storage tanks, distribution terminals, storage facilities and refineries. In the fourth quarter, the company felt a negative impact from the coronavirus crisis, posting negative EBITDA of $ 111.5 million over the period for its refining segment, up from $ 171.6 million a year ago. In January 2021, the company declared a quarterly dividend of $ 0.35 per share, as in the previous quarter.

At the end of the fourth quarter, 3 hedge funds in the Insider Monkey database of 887 funds had stakes 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: NHI)

Dividend yield: 5.96% Number of hedge fund holders: 13

Self-directed REITs National Health Investors Inc offers services such as sale-leaseback, JVs, mortgage, mezzanine 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 the 10 best dividend-paying stocks for 2021.

The company is also drawing the attention of smart money, as 13 hedge funds tracked by Insider Monkey said they had stakes in the company at the end of the fourth quarter, up from 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 paying stocks for 2021. The REIT buys and sells properties and offers services like portfolio management, asset management, credit and real estate research. In February, the company said it expected a strong acquisition volume of more than $ 3.25 billion, or $ 3.44 to $ 3.49 per share in FFO terms, in 2021, as of above the average analyst estimate of $ 3.43. The company recently bought a portfolio of 21 gas stations and convenience stores in Hawaii from Par Pacific Holdings for $ 109.4 million.

With a $ 61.4 million stake in Realty Income Corp., Two Sigma Advisors owns 987,364 shares of the company at the end of the fourth quarter of 2020. Our database shows that 24 hedge funds held stakes in Realty Income Corp. at the end of the fourth trimester.

7. Enbridge Inc. (NYSE: ENB)

Dividend yield: 7.24% Number of hedge fund holders: 28

The power transmission company is one of the best dividend-paying stocks for 2021, with a dividend yield of over 7% and over 65 years of dividend payouts. In December 2020, the company reaffirmed its outlook for long-term average annual growth in distributable cash flow per share of 5% to 7%.

At the end of the fourth quarter, there were 28 hedge funds in Insider Monkey’s database that held stakes in Enbridge, compared to 25 funds in the third quarter. Marshall Wace LLP, with 1.3 million shares, is the main player in the company.

6. Enterprise Products Partners LP (NYSE: EPD)

Dividend yield: 7.73% Number of hedge fund holders: 30

With a 7% dividend yield and over 20 consecutive years of dividend hikes, the pipeline company Enterprise Products is one of the top 10 dividend-paying stocks to buy for 2021. The company recently said during a review. ‘a meeting with investors to reuse multiple pipelines to process different products while reducing new investments while waiting for the current uncertainty in the market to end.

Appaloosa Management LP is one of 30 hedge funds tracked by Insider Monkey with stakes in EPD at the end of the fourth quarter. The fund owns more than 3.45 million shares of the company.

Click to continue reading and see the top 5 dividend paying stocks for 2021.