2 Dividend Stocks Top Managers Like

Susan Dziubinski: Hi. I'm Susan Dziubinski with Morningstar.

Each quarter, we take a look at the holdings of some of the best money managers around today—who we call our Ultimate Stock-Pickers. Today, we're focusing on the two dividend-paying stocks that are most widely held among this group of fine investors.

2 Dividend Stocks Top Managers Like

These companies with Morningstar Economic Moat Ratings of wide and narrow are popular with income investors. Data as of Oct. 7, 2022.

1. Verizon Communications VZ
2. Dollar General DG

The first stock is Verizon. Verizon is the largest wireless carrier in the United States. Verizon’s wireless business generates more than 80% of the company’s revenue. We expect Verizon to continue to deliver consistent results over the long term, though growth will likely be modest, given competition from the likes of AT&T and T-Mobile. With a forward yield topping 6%, Verizon stock looks undervalued according to our metrics. We think shares are worth $59.

The second dividend-paying stock top managers like is Dollar General. Dollar General effectively delivers convenience and affordability to its largely modest-income customer base. The company has embraced the digital wave of retail with its mobile app and has introduced a rapidly changing nonconsumable assortment that should help drive foot traffic. The stock's forward yield is modest at less than 1%, and shares are trading around fair value of $227.

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Watch "3 Dividend Stocks for October 2022" for more from this series. Watch "3 Recession-Resistant Stocks" for more from Susan Dziubinski.