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In this article, we discuss 11 best mid-cap dividend stocks to buy now. If you want to see more stocks in this selection, check out 5 Best Mid-Cap Dividend Stocks To Buy Now.
Dividends have historically been an effective hedge against inflation. For example, the S&P 500 declined from 120 to 62.28 in October 1974 before eventually rising again. During January 1973 to July 1984, the total return with dividends reinvested over the 14 years was approximately 400%, which equals 11.6% per year. When adjusted for CPI inflation, these returns came in at 86% or 4.3% per year in real terms. In periods of high market volatility, dividends can potentially become a much larger part of total shareholder returns.
Jason Ray, CEO of Zenith Wealth Partners in Philadelphia, advised investors on October 4 to pile into dividend stocks as a value play and suggested younger traders with a long investment horizon to seek out alternative assets, including investing in early stage startups and real estate.
According to Hartford Funds, dividends have played a notable role in the returns to shareholders during the last 50 years. Going back to 1960, 84% of the total return of the S&P 500 Index is attributed to reinvested dividends and compounding. From 1930 to 2021, dividend contribution to the total return of the S&P 500 Index averaged 40%. A Ned Davis study shows that companies that deviated from their dividend policies suffered negative and volatile consequences. Some of the best mid-cap dividend stocks to consider include OneMain Holdings, Inc. (NYSE:OMF), STAG Industrial, Inc. (NYSE:STAG), and Levi Strauss & Co. (NYSE:LEVI).
Our Methodology
We selected the following mid-cap dividend stocks based on positive analyst coverage, strong business fundamentals, and robust dividend profiles. The market cap of these stocks ranges from $2 billion to $10 billion and the dividend yields are mentioned as of November 2. We have assessed the hedge fund sentiment from Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022.
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Best Mid-Cap Dividend Stocks To Buy Now
11. EnLink Midstream, LLC (NYSE:ENLC)
Number of Hedge Fund Holders: 9
Dividend Yield as of November 2: 3.76%
EnLink Midstream, LLC (NYSE:ENLC) is a Texas-based midstream energy company involved in gathering, processing, transporting, storing, and selling natural gas, natural gas liquids, and condensate crude oil. On November 1, EnLink Midstream, LLC (NYSE:ENLC) reported earnings for the third quarter of 2022. The company announced a Q3 GAAP EPS of $0.17 and a revenue of $2.66 billion, outperforming market estimates by approximately $0.04 and $560 million, respectively. The revenue gained 48.6% on a year-over-year basis.
On October 19, EnLink Midstream, LLC (NYSE:ENLC) declared a $0.1125 per share quarterly dividend, in line with previous. The dividend is payable on November 14, to shareholders of record on October 28. EnLink Midstream, LLC (NYSE:ENLC) is one of the best dividend stocks to invest in. The dividend yield came in at 3.76% on November 2.
Morgan Stanley analyst Robert Kad upgraded EnLink Midstream, LLC (NYSE:ENLC) on October 19 to Overweight from Equal Weight with a price target of $14, up from $12. He believes the company has "increasing scarcity value" as a G&P with potential volume upside.
According to Insider Monkey’s data, 9 hedge funds were bullish on EnLink Midstream, LLC (NYSE:ENLC) at the end of the second quarter of 2022, with collective stakes worth $27.6 million, compared to 9 funds in the last quarter worth $20.30 million. John Overdeck and David Siegel’s Two Sigma Advisors is the largest position holder in the company, with 1.17 million shares valued at nearly $10 million.
In addition to OneMain Holdings, Inc. (NYSE:OMF), STAG Industrial, Inc. (NYSE:STAG), and Levi Strauss & Co. (NYSE:LEVI), EnLink Midstream, LLC (NYSE:ENLC) is one of the best mid-cap dividend stocks to invest in.
10. Viper Energy Partners LP (NASDAQ:VNOM)
Number of Hedge Fund Holders: 14
Dividend Yield as of November 2: 9.65%
Viper Energy Partners LP (NASDAQ:VNOM) is a Texas-based company that owns, acquires, and operates oil and natural gas properties in North America. With a dividend yield of 9.65% as of November 2, Viper Energy Partners LP (NASDAQ:VNOM) is one of the premier mid-cap dividend stocks to invest in.
KeyBanc analyst Tim Rezvan initiated coverage of Viper Energy Partners LP (NASDAQ:VNOM) on September 19 with an Overweight rating and a $39 price target. The company’s "symbiotic relationship" with Diamondback Energy, Inc. (NASDAQ:FANG) develops "unparalleled visibility" on production growth and warrants a "best-in-group premium multiple," which is not reflected in the shares currently, the analyst told investors in a research note.
According to Insider Monkey’s second quarter database, 14 hedge funds were long Viper Energy Partners LP (NASDAQ:VNOM), compared to 12 funds in the preceding quarter. Charles Davidson’s Wexford Capital is the largest position holder in the company, with a stake worth $434.6 million.
Here is what Bernzott Capital US Small Cap Value Fund has to say about Viper Energy Partners LP (NASDAQ:VNOM) in its Q1 2022 investor letter:
“Viper Energy (NASDAQ:VNOM): This mineral rights company, possessing a premiere sponsorship with Diamondback Energy, was the top contributor. Buoyed by Diamondback’s advantaged assets in the Permian Basin coupled with elevated oil prices, Viper reported strong earnings that produced significant FCF generation resulting in a 23% increase in distributions on a sequential basis. We expect distributions to continue to rise as Diamondback remains focused on growing production on Viper’s acreage and continue to believe the stock remains undervalued relative to its FCF generation and distribution growth potential.”
9. Medical Properties Trust, Inc. (NYSE:MPW)
Number of Hedge Fund Holders: 15
Dividend Yield as of November 2: 10.04%
Medical Properties Trust, Inc. (NYSE:MPW) is an Alabama-based real estate investment trust that acquires and develops net-leased hospital facilities. On October 10, Medical Properties Trust, Inc. (NYSE:MPW) announced that its board of directors has authorized the repurchase of up to $500 million of common stock before October 2023. Medical Properties Trust, Inc. (NYSE:MPW) is one of the best dividend stocks to consider, with a dividend yield of 10.04% as of November 2.
Barclays analyst Steve Valiquette on October 21 reiterated an Overweight rating on Medical Properties Trust, Inc. (NYSE:MPW) but trimmed the price target on the shares to $19 from $23. The analyst generally expects a "slight sequential improvement" in EBITDA across the healthcare services sector in Q3 2022 but he thinks skilled nursing-focused names may have higher than average risk in the second half of 2022 and 2023.
According to Insider Monkey’s Q2 data, 15 hedge funds were long Medical Properties Trust, Inc. (NYSE:MPW), compared to 16 funds in the last quarter. Amy Minella’s Cardinal Capital is the largest position holder in the company, with more than 5 million shares worth $77.3 million.
8. Ares Capital Corporation (NASDAQ:ARCC)
Number of Hedge Fund Holders: 15
Dividend Yield as of November 2: 9.81%
Ares Capital Corporation (NASDAQ:ARCC) is a business development company focused on the acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. The company delivers a dividend yield of 9.81% as of November 2 and it posted market-beating financial results in Q3 2022. On October 25, Ares Capital Corporation (NASDAQ:ARCC) declared a $0.48 per share quarterly dividend, an 11.6% increase from its prior dividend of $0.43. The dividend is distributable on December 29, to shareholders of record on December 15. It is one of the best dividend stocks to invest in.
On October 27, Citi analyst Arren Cyganovich maintained a Buy rating on Ares Capital Corporation (NASDAQ:ARCC) but lowered the price target on the stock to $21 from $24 after the Q3 results. Ares Capital Corporation (NASDAQ:ARCC) reported better than anticipated origination activities in a turbulent market and credit remained stable, with its non-accrual ratio flat, the analyst wrote in a research note. However, the analyst trimmed the price target to factor in the high risk of recession in 2023.
According to Insider Monkey’s data, 15 hedge funds were long Ares Capital Corporation (NASDAQ:ARCC) at the end of June 2022, compared to 18 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a prominent stakeholder of the company, with 2.8 million shares worth $51 million.
7. NextEra Energy Partners, LP (NYSE:NEP)
Number of Hedge Fund Holders: 17
Dividend Yield as of November 2: 4.18%
NextEra Energy Partners, LP (NYSE:NEP) is a Florida-based company that owns and manages contracted clean energy projects in the United States. These comprise wind and solar projects, as well as contracted natural gas pipeline assets. NextEra Energy Partners, LP (NYSE:NEP) declared on October 24 a $0.7875 per share quarterly dividend, a 3.3% increase from its last dividend of $0.7625. The dividend is payable on November 14, to shareholders of record on November 4. NextEra Energy Partners, LP (NYSE:NEP) delivers a dividend yield of 4.18% as of November 2.
On October 20, KeyBanc analyst Sophie Karp reiterated an Overweight rating on NextEra Energy Partners, LP (NYSE:NEP) but lowered the firm's price target on the shares to $83 from $89 as utilities reversed 2022 outperformance in the last two weeks of Q3 2022.
Among the hedge funds tracked by Insider Monkey, NextEra Energy Partners, LP (NYSE:NEP) was part of 17 public stock portfolios at the end of June 2022, with collective stakes worth $162.7 million, compared to 17 in the prior quarter worth $175.3 million.
Here is what ClearBridge Investments, an investment management firm, said about NextEra Energy Partners, LP (NYSE:NEP) in its Q1 2021 investor letter:
“NEP is a growth-oriented contracted renewables company formed by its sponsor and general partner NextEra Energy (NEE) to own, operate and acquire contracted renewable energy generation assets located in North America. Growth comes from the dropdown of assets from NEE and we anticipate this should allow NEP to provide 12%–15% dividend growth to 2024. Shares were higher amid an improved renewables project backlog following fourth-quarter results. Continued positive green policy news following the Democrats’ runoff election wins also raised expectations of green fiscal stimulus.”
6. AGNC Investment Corp. (NASDAQ:AGNC)
Number of Hedge Fund Holders: 18
Dividend Yield as of November 2: 17.52%
AGNC Investment Corp. (NASDAQ:AGNC) is a Maryland-based real estate investment trust that invests in residential mortgage pass-through securities and collateralized mortgage obligations that are guaranteed by the United States government-sponsored enterprises. AGNC Investment Corp. (NASDAQ:AGNC)’s Q3 non-GAAP earnings per share of $0.84 outperformed Wall Street estimates by $0.15.
On October 10, AGNC Investment Corp. (NASDAQ:AGNC) declared a $0.12 per share monthly dividend, in line with previous. The dividend is distributable on November 9, to shareholders of the company as of October 31. AGNC Investment Corp. (NASDAQ:AGNC)’s dividend yield on November 2 came in at 17.52%.
Barclays analyst Mark DeVries upgraded AGNC Investment Corp. (NASDAQ:AGNC) on October 27 to Overweight from Equal Weight with a price target of $9, down from $12, following the Q3 results. Mortgage backed security spreads have touched levels not seen since the financial crisis of 2008, "creating attractive investment opportunities with levered returns in the high-teens while book values are biased higher," the analyst told investors. He sees a favorable risk/reward in the shares.
According to Insider Monkey’s data, 18 hedge funds were bullish on AGNC Investment Corp. (NASDAQ:AGNC) at the end of the second quarter of 2022, compared to 14 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the leading position holder in the company, with 4.65 million shares worth $51.5 million.
Like OneMain Holdings, Inc. (NYSE:OMF), STAG Industrial, Inc. (NYSE:STAG), and Levi Strauss & Co. (NYSE:LEVI), AGNC Investment Corp. (NASDAQ:AGNC) is one of the best dividend stocks to monitor as a hedge against inflation.
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Disclosure: None. 11 Best Mid-Cap Dividend Stocks To Buy Now is originally published on Insider Monkey.
