In this article, we are going to discuss the 14 best blue chip dividend stocks to buy according to hedge funds.
Dividend stocks have remained a popular choice for income investors for years. They offer a steady income stream and have also delivered solid long-term returns. That is why many analysts and investors continue to favor them, especially when markets become uncertain.
Michael Barclay, lead manager of Columbia Dividend Income, shared a similar view during The Morningstar Investment Conference. He said that “Cycles come and go, and dividends have been an important part of total return in the S&P 500 for almost 100 years.” He added that investors looking for stock market exposure with lower risk can often find it through “a prudently run dividend strategy.”
At the same time, Barclay made it clear that dividend-paying companies are not immune to financial pressure. Even well-known businesses can end up reducing or suspending their payouts. He noted that “the market sniffs out a dividend cut or elimination the year before,” suggesting that investors often see the warning signs well in advance. Interestingly, he said companies tend to perform better over the next 12 months after the dividend cut finally happens. In his view, dividend decisions tell investors a lot about a company’s financial health. Even when dividend growth starts slowing, it can be an early signal that deserves a closer look and a deeper review of the business.
Barclay also explained what he looks for when evaluating dividend stocks. “We start with the balance sheet. If your balance sheet’s overleveraged, you’re going to run into trouble at some point,” he said. He believes cash flow is just as important because it shows whether a company can comfortably support its dividend. He also pays close attention to the payout ratio relative to cash flow. If that ratio becomes too stretched, the company has less room to raise its dividend and may have to pause increases or even cut the payout if business conditions weaken.
With that said, here are the Best Blue Chip Dividend Stocks to Buy Now.
Photo by Viacheslav Bublyk on Unsplash
Our Methodology
To collect data for this article, we used our screeners to identify blue chip companies that boast a market cap of over $50 billion. We then shortlisted stocks that had an annual dividend yield of over 3%, as of July 5, and ranked them by the number of hedge funds invested in them at the end of Q1 2026, as per the Insider Monkey database. Finally, we limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. The following are the Best Blue Chip Dividends Stocks According to Hedge Funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
14. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 32
Dividend Yield as of July 5: 5.07%
Realty Income Corporation (NYSE:O) focuses on acquiring and managing high-quality, single-unit freestanding commercial properties under long-term, net lease agreements leased to leading global operators. The company manages a portfolio of 15,500 properties in all 50 US states, the UK, and eight other countries in Europe.
On June 30, Stifel slightly raised its price target on Realty Income Corporation (NYSE:O) from $70.50 to $70.75, while reiterating a ‘Buy’ rating on the shares. The target boost implies an upside of almost 11% from the current levels.
Meanwhile, earlier on June 17, Scotiabank instead trimmed its price objective on Realty Income Corporation (NYSE:O) from $72 to $67, but maintained its ‘Outperform’ rating on the shares (read more details here).
Realty Income Corporation (NYSE:O) had a strong start to the year and grew its AFFO per share by 6.6% YoY in the first quarter. As a result, it raised its AFFO per share guidance range to the range of $4.41 and $4.4 for full-year 2026, and also increased its investment volume guidance to $9.5 billion at 100% ownership.
Realty Income Corporation (NYSE:O) raised its monthly dividend by 0.2% to $0.271 per share last month. This marks the 135th dividend increase since the company’s listing on the NYSE in 1994. Realty Income boasts the coveted title of a Dividend Aristocrat and was recently placed among the 10 No-Brainer Dividend Stocks to Buy.
13. Simon Property Group, Inc. (NYSE:SPG)
Number of Hedge Fund Holders: 48
Dividend Yield as of July 5: 3.89%
Simon Property Group, Inc. (NYSE:SPG) is a global leader in the ownership of premier shopping, dining, entertainment, and mixed-use destinations and an S&P 100 company.
On July 1, Wolfe Research downgraded Simon Property Group, Inc. (NYSE:SPG) from ‘Outperform’ to ‘Peer Perform’, without assigning the stock a specific price estimate.
Wolfe Research cited valuation concerns for the downgrade, noting that the “all-time high share price is a challenging entry point”. The analyst firm believes that while Simon’s underlying fundamentals remain solid, the company’s current valuation now fully reflects the strength of its business model.
Meanwhile, earlier on June 25, Barclays analyst Richard Hightower turned slightly more bullish on Simon Property Group, Inc. (NYSE:SPG) and raised the firm’s price target on the stock by $1, while keeping an ‘Equal Weight’ rating on the shares (read more details here).
Following a “very good start to 2026, Simon Property Group, Inc. (NYSE:SPG) recently raised its full-year 2026 real estate FFO guidance to a range of $13.10 to $13.25 per share, up from its previous expectations of $13 to $13.25 per share.