Hedge funds are experiencing a notable resurgence, with reports indicating that they are on track for their most successful year since the onset of the COVID-19 pandemic. According to a report by Business Insider dated October 30, 2025, these funds have recorded average gains of 16.6% over the first three quarters of the year, alongside net inflows exceeding $40 billion, as detailed by Citco, a prominent fund administrator.
The overall hedge fund industry is witnessing a significant upswing, with the average gains in the third quarter of 2025 reaching 5.2% across various core strategies. Notably, 80% of the funds reported improved returns. Multistrategy funds have excelled, achieving an average gain of 19.3%, while equity funds and global macro funds followed with gains of 17.1% and 15.8%, respectively.
Prominent hedge funds such as Citadel and Millennium, managing assets worth $69 billion and $79 billion, respectively, reported increases of 5% and 6% through September. A Goldman Sachs report published on November 10, 2025, noted that hedge funds, particularly equity traders, have achieved returns surpassing 13% this year. Despite a modest 1.75% gain in October, hedge funds maintained their investments in global equities for the second consecutive month, indicating a positive long-term outlook.
Given this context, we explore the ten best dividend stocks that hedge funds are currently favoring. This list is based on an analysis of Insider Monkey’s Q3 database, which includes data from 978 hedge funds. We focused on stocks held by the highest number of hedge fund investors, with at least 10 years of consistent dividend payments.
Top Dividend Stocks Hedge Funds Are Buying
1. **Bank of America Corporation (NYSE:BAC)**
– Number of Hedge Fund Holders: 111
– Number of Years of Dividend Payouts: 20
Bank of America has emerged as a compelling choice among hedge funds. Analyst Chris Kotowski of Oppenheimer recently reiterated a Buy rating on BAC with a price target of $55. The bank’s annual spending has surged by 44% over the past decade, now totaling $4 billion in 2025 due to investments in technology, including artificial intelligence.
2. **Eli Lilly and Company (NYSE:LLY)**
– Number of Hedge Fund Holders: 114
– Number of Years of Dividend Payouts: 53
Eli Lilly remains a strong contender, with Morgan Stanley‘s Terence Flynn maintaining a Buy rating and a price target of $1,290. The company is set to present crucial data on its breast cancer pipeline at the upcoming San Antonio Breast Cancer Symposium from December 9 to 12.
3. **JPMorgan Chase & Co. (NYSE:JPM)**
– Number of Hedge Fund Holders: 120
– Number of Years of Dividend Payouts: 25
JPMorgan has also attracted attention from hedge funds. Analyst Betsy Graseck of Morgan Stanley reaffirmed a Hold rating with a target price of $338. The company is planning a major construction project in Canary Wharf, which is expected to bolster the British economy by £10 billion.
4. **UnitedHealth Group Incorporated (NYSE:UNH)**
– Number of Hedge Fund Holders: 140
– Number of Years of Dividend Payouts: 35
UnitedHealth has garnered positive sentiment from analysts, with Wells Fargo analyst Stephen Baxter assigning a Buy rating and a price target of $400. However, negotiations with TriHealth over reimbursement rates are ongoing, potentially affecting up to 80,000 patients in the Tri-State area.
5. **Visa Inc. (NYSE:V)**
– Number of Hedge Fund Holders: 179
– Number of Years of Dividend Payouts: 17
Visa is expanding its capabilities in the stablecoin settlement space in the CEMEA region through a partnership with Aquanow. The firm aims to reduce costs and streamline operations for authorized transactions involving stablecoins.
6. **Microsoft Corporation (NASDAQ:MSFT)**
– Number of Hedge Fund Holders: 312
– Number of Years of Dividend Payouts: 21
Microsoft continues to be a leader in the technology sector. A recent ruling by the French antitrust authority dismissed allegations from Qwant concerning market abuse. Additionally, a significant shareholder, the $2.1 trillion Norwegian sovereign wealth fund, plans to support Microsoft in its upcoming human rights case.
As hedge funds navigate a complex financial landscape, these dividend stocks represent strategic investments that reflect a blend of stability and potential growth. The ongoing performance of these companies will likely influence hedge fund strategies as 2025 unfolds, demonstrating the dynamic nature of the investment landscape.