High-quality dividend stocks aren't just for the everyday retail investor.
Some of the largest hedge funds and asset managers in the world are heavily invested in high-dividend stocks. This speaks to the awesome power of dividends and compounding interest.
Here are 10 high-dividend stocks that hedge funds love right now.
Two of the high-quality dividend stocks are in the current top 10 best stocks using the eight rules of dividend investing.
High-quality businesses appeal to both individual investors and hedge funds. The 10 high-quality dividend stocks below allow investors to piggyback on the research and investment decisions of some of the best institutional investors.
1. Johnson & Johnson (JNJ)
Johnson & Johnson has racked up 31 consecutive years of growth in the company's adjusted earnings. There are no other companies that I am aware of with this level of earnings consistency.
The health care industry has favorable tailwinds, including an aging global population, a growing global population and increases in a global middle-class population, all of which increase health care demand. These tailwinds will likely result in Johnson & Johnson's impressive earnings growth streak continuing.
Even more impressive, Johnson & Johnson has increased its dividend for 53 years in a row, making it an illustrious dividend king. To be a dividend king, a company must have 50-plus years of consecutive dividend increases.
Johnson & Johnson's dividend yield of 2.78% is above-average.
And, Johnson & Johnson is one of just three publicly traded companies to hold a "AAA" credit rating from Standard & Poor's, which speaks to its pristine financial condition.
This is because of J&J's tremendous business model, which is diversified both in terms of products and geography. It has a large consumer health business with popular brands such as Band-Aid and Listerine.
The company also has a medical-devices business and a major pharmaceutical operation.
Johnson & Johnson generates about 70% of its sales from products that enjoy the No. 1 or No. 2 position in their respective markets. This shows that that when the company enters a market, it tends to dominate that market.