Dividend Stocks You Shouldn't Go Without

It pays to know what other investors are doing. If like many investors, you're looking for stocks that combine the potential for rising share prices with the immediate gratification of receiving dividend payments, then knowing which dividend stocks have attracted the attention of the world's best professional investors is definitely worth the effort. Earlier this month, I was inspired by an article by Maz Jadallah, the founder of AlphaClone. Jadallah's service tracks hedge funds and other institutional investors. By poring through the holdings reports that many financial institutions are required to file with the SEC, AlphaClone gives you access to valuable knowledge -- and also lets you slice and dice it to focus in on a number of different investing themes.

Using AlphaClone, I searched through a database of nearly 300 institutions to find the stocks that appeared most often among the top holdings of each manager's portfolio. With the resulting 20 stocks, I filtered out every stock that wasn't paying at least a 3% dividend. Here are the five stocks from the final list, ranked by dividend yield: AT&T (T) 5.9%, Merck (MRK) 4.4%, Pfizer (PFE) 4.3%, Johnson & Johnson (JNJ) 3.4% and Chevron (CVX) 3.4%.

Source: Motley Fool

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