In this article, we discuss the 10 best dividend stocks according to Anthony Bozza’s Lakewood Capital.
Anthony Bozza is the founder of Lakewood Capital Management, a New York-based investment management firm that was founded in 2007. Bozza’s investment career began right after he graduated with a degree in Economics from the University of Pennsylvania. Before founding his hedge fund, he first polished his investment strategies while working with SAB Capital Management.
Lakewood Capital Management utilizes a long-term fundamental approach to its investments while focusing on capital maintenance. Bozza also carries a reputation as a skilled short-seller. Things didn’t start out particularly well for his hedge fund, as it fell by 20% in its first full year of operations in 2008, but it came back strong in subsequent years, gaining 70% and 16% in 2009 and 2010, respectively. In the second quarter of 2021, the fund delivered a 10.7% return to shareholders.
As of the end of Q4 2021, Lakewood Capital Management holds a 13F portfolio value of $2.35 billion, down from $2.72 billion in the previous quarter. The portfolio contains 65 holdings, with the top 10 holdings accounting for 47.05% of the portfolio’s value. Some of the hedge fund’s major holdings include Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN).
Our Methodology:
In this article, we will focus on the top dividend stocks in Anthony Bozza’s portfolio. For this list, we took data from Lakewood Capital’s 13F portfolio as of December 31, 2021. All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q4 2021 reporting period.
10 Best Dividend Stocks According to Anthony Bozza’s Lakewood Capital
10. Brunswick Corporation (NYSE:BC)
Number of Hedge Fund Holders: 42
Dividend Yield as of February 24: 1.58%
Lakewood Capital’s Stake Value: $78,747,000
Brunswick Corporation (NYSE:BC) is an American manufacturing company which has operations in over 24 countries. On February 17, the company hiked its quarterly dividend by 9% to $0.365 per share. The stock’s current dividend yield stands at 1.58% as of February 24. Brunswick Corporation (NYSE:BC) has been increasing its dividend consistently for the past 10 years.
In Q4 2021, Lakewood Capital increased its stake in Brunswick Corporation (NYSE:BC) by 36% to 781,764 shares, lifting the position to over $78.7 million in value. The company accounted for 3.34% of Anthony Bozza’s portfolio. Along with this stock, Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN) were some of the prominent blue-chip holdings of Lakewood Capital in Q4.
In its recent investor note, Citigroup named Brunswick Corporation (NYSE:BC) the largest and best-run company in the marine industry. In February, the firm initiated its coverage on the stock with a ‘Buy’ rating and a $118 price target.
At the end of Q4 2021, 42 hedge funds tracked by Insider Monkey owned stakes in Brunswick Corporation (NYSE:BC), up from 39 in the previous quarter. The total value of these stakes is over $1.2 billion. Cantillon Capital Management was the company’s leading shareholder among that group, holding shares worth over $384 million.
9. Science Applications International Corporation (NYSE:SAIC)
Number of Hedge Fund Holders: 20
Dividend Yield as of February 24: 1.87%
Lakewood Capital’s Stake Value: $39,505,000
Science Applications International Corporation (NYSE:SAIC) is an American information technology company that provides services to government and private institutions. In light of the company’s strong earnings growth, Barclays set a $90 price target on the stock in January, with an ‘Equal Weight’ rating on the shares.
The number of hedge funds tracked by Insider Monkey holding stakes in Science Applications International Corporation (NYSE:SAIC) grew to 20 in Q4, from 16 in the preceding quarter. These stakes hold a consolidated value of over $291 million.
Science Applications International Corporation (NYSE:SAIC) currently offers a quarterly dividend of $0.37 per share. As of February 24, the stock’s dividend yield is 1.87%. In Q4 2021, the company represented 1.67% of Anthony Bozza’s portfolio, as his hedge fund held 472,600 shares worth $39.5 million.
8. Cigna Corporation (NYSE:CI)
Number of Hedge Fund Holders: 53
Dividend Yield as of February 24: 1.99%
Lakewood Capital’s Stake Value: $157,654,000
Cigna Corporation (NYSE:CI), an American healthcare and insurance company, was the largest holding of Lakewood Capital in Q4. The hedge fund held a $158 million stake in the company consisting of 686,557 shares, which represented 6.68% of Anthony Bozza’s portfolio.
In February, RBC Capital called Cigna Corporation (NYSE:CI)’s outlook for 2022 ‘achievable’ and set a $235 price target on the stock, with a ‘Sector Perform’ rating on the shares. Cigna Corporation (NYSE:CI) pays a quarterly dividend of $1.12 per share after increasing it by 12% on February 3. The stock’s dividend yield stands at 1.99% as of February 24.
John Allison’s Unio Capital was the largest shareholder of Cigna Corporation (NYSE:CI) at the end of Q4 among the funds tracked by Insider Monkey, owning a stake worth over $1.3 billion. Overall, 53 hedge funds held stakes in the company at that time, down from 58 in the previous quarter. The total value of those stakes was nearly $2 billion.
Dodge & Cox Stock Fund mentioned Cigna Corporation (NYSE:CI) in its Q3 2021 investor letter. Here is what the firm has to say:
“Cigna (2.5% position) is one of the largest and most diversified health care services organizations in the United States. The stock has underperformed recently due to weak financial results, which included higher than expected medical costs. Nevertheless, the company continues to work towards its 10-13% annual earnings growth target, generates significant cash flow, and has plans to deploy capital to shareholders through debt repayments, share buybacks, and a newly announced dividend program. Cigna trades at an attractive valuation of nine times forward earnings.”
7. Insperity, Inc. (NYSE:NSP)
Number of Hedge Fund Holders: 20
Dividend Yield as of February 24: 2.08%
Lakewood Capital’s Stake Value: $35,795,000
Insperity, Inc. (NYSE:NSP) is an American professional employer organization that provides personnel management services. At the end of Q4 2021, 20 hedge funds tracked by Insider Monkey were bullish on the company, up from 18 in the previous quarter. The consolidated value of those stakes was $172 million.
In 2021, Insperity, Inc. (NYSE:NSP) grew its quarterly dividend by 12% to $0.45 per share, with shares yielding 2.08% as of February 24. The company’s 5-year dividend CAGR stands at a solid 29.32%. Insperity, Inc. (NYSE:NSP) gained the attention of income investors in 2020, as it paid around $62 million in dividends.
Lakewood Capital started building its position in Insperity, Inc. (NYSE:NSP) during the first quarter of 2020. During Q4 2021, the hedge fund reduced its stake in the company by 36% to 303,063 shares worth $35.8 million. Insperity, Inc. (NYSE:NSP) accounted for 1.51% of the value of Anthony Bozza’s 13F portfolio.
6. WestRock Company (NYSE:WRK)
Number of Hedge Fund Holders: 37
Dividend Yield as of February 24: 2.22%
Lakewood Capital’s Stake Value: $42,694,000
In January, Truist lauded WestRock Company (NYSE:WRK), an American packaging corporation, for the greater demand that its products have achieved during the pandemic. The firm lifted its price target on the stock to $56, while maintaining a ‘Hold’ rating on the shares.
Though WestRock Company (NYSE:WRK) slashed its dividend by 57% in 2020 due to the Covid-19 pandemic, the company increased its dividend twice in 2021. Currently, the company pays a quarterly dividend of $0.25 per share, having raised it by 4% in October 2021. As of February 24, the stock’s dividend yield stands at 2.22%. In Q4 2021, Lakewood Capital did not change its position in WestRock Company (NYSE:WRK), holding on to its 962,450 shares worth $42.7 million on December 31. The company represented 1.81% of Anthony Bozza’s portfolio.
37 hedge funds tracked by Insider Monkey held stakes in WestRock Company (NYSE:WRK) at the end of 2021, which were valued at nearly $800 million. In comparison, 34 hedge funds held stakes worth $720 million in the company at the end of Q3. Among those hedge funds, Impax Asset Management held the largest stake in WestRock Company (NYSE:WRK) heading into 2022, valued at $261.4 million.
Like Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN), WestRock Company (NYSE:WRK) is one of Lakewood Capital Management’s notable holdings in Q4.
5. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 80
Dividend Yield as of February 24: 2.39%
Lakewood Capital’s Stake Value: $54,291,000
Comcast Corporation (NASDAQ:CMCSA), an American multinational tech company, experienced positive hedge fund sentiment in Q4, as 80 hedge funds tracked by Insider Monkey held stakes in the company as of December 31, up from 75 a quarter earlier. The total value of those stakes was over $8.6 billion.
On January 27, Comcast Corporation (NASDAQ:CMCSA) raised its quarterly dividend by 8%, marking the company’s 14th consecutive year of dividend growth. The company pays a quarterly dividend of $0.27 per share, which yields 2.39% as of February 24. This January, Cowen raised its price target on Comcast Corporation (NASDAQ:CMCSA) to $64, while maintaining an ‘Overweight’ rating on the shares.
Lakewood Capital started its investment in Comcast Corporation (NASDAQ:CMCSA) during the first quarter of 2015, owning shares worth $18.6 million at that time. Following the close of Q4 2021, the hedge fund held a stake worth $54.3 million after increasing its position in the company by 5% to nearly 1.08 million shares. Comcast Corporation (NASDAQ:CMCSA) accounted for 2.3% of Anthony Bozza’s 13F portfolio value.
ClearBridge Investments mentioned Comcast Corporation (NASDAQ:CMCSA) in its Q2 2021 investor letter. Here is what the firm had to say:
“We funded the shift primarily with trims in Comcast following big gains in this name. Comcast is a long-term holding that have been and remain core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
Comcast, like Blackstone, has been a meaningful long-term holding whose stock performance has at times lagged its robust fundamental performance. Over the last nine months the stock price caught up some with the fundamentals and looked like it had more room to run. Our thesis on the name evolved, however, following the May 17 announcement that competitor Discovery was merging its operations with Time Warner. This deal positions the new company as a credible competitor to Netflix, Amazon Prime, Hulu and Disney, and results in Comcast being left without the proverbial dance partner in the evolving pay TV/DTC landscape. While we continue to believe Comcast’s cable systems business is well-positioned and that NBCUniversal remains valuable, the competitive dynamic for NBCUniversal has stiffened. Our reduced position size reflects both our continued enthusiasm for many parts of the franchise and emerging concerns given the evolving pay TV/DTC landscape.”
4. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 48
Dividend Yield as of February 24: 2.49%
Lakewood Capital’s Stake Value: $62,884,000
In Q4 2021, Lakewood Capital increased its stake in Ally Financial Inc. (NYSE:ALLY) by 27% to 1.32 million shares worth $62.9 million. The American bank holding company accounted for 2.66% of Anthony Bozza’s portfolio.
Insider Monkey’s Q4 data showed that the number of hedge funds holding long positions in Ally Financial Inc. (NYSE:ALLY) declined to 48 from 57 during the quarter,. with the total worth of those stakes standing at $2.4 billion.
Ally Financial Inc. (NYSE:ALLY) announced a 20% boost to its quarterly dividend on January 11. The company currently pays a quarterly dividend of $0.30 per share, with a dividend yield of 2.49% as of February 24. The company’s 5-year dividend CAGR stands at 44%, which makes it one of the best dividend stocks in Anthony Bozza’s portfolio. In January, JPMorgan set a $56 price target on Ally Financial Inc. (NYSE:ALLY), with a ‘Neutral’ rating on the shares.
3. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders: 19
Dividend Yield as of February 24: 2.78%
Lakewood Capital’s Stake Value: $12,145,000
Diageo plc (NYSE:DEO) is a London-based multinational beverage alcohol company with operations in over 180 countries. Wall Street analysts have appreciated the company’s strategic acquisitions during the pandemic. In February, both Barclays and Credit Suisse lifted their price targets on the stock.
On February 23, Diageo plc (NYSE:DEO) announced a 5% increase to its interim dividend at 0.2936 GBP per share, giving shares a dividend yield of 2.78% as of February 24. Diageo plc (NYSE:DEO) maintains a 34-year track record of consistent dividend growth, falling in the category of Dividend Aristocrats.
In Q4, the company accounted for 0.51% of Anthony Bozza’s portfolio, with Lakewood owning 55,168 shares. Lakewood was one of 19 hedge funds tracked by Insider Monkey that reported owning stakes in Diageo plc (NYSE:DEO) as of December 31, up from 18 in the previous quarter. The total value of those stakes was roughly $936 million. Ako Capital held a $383 million stake in the company, being its largest shareholder among that group.
Weitz Investment Management mentioned Diageo plc (NYSE:DEO) in its Q1 2021 investor letter. Here is what the firm had to say:
“We sold Diageo after twelve years of very profitable ownership. The global spirits company has done a fine job of growing earnings, and the stock has enjoyed an extra boost from substantial, multiple expansions along the way. While the business is in good hands, we think a repeat of our mid-double-digit annualized return experience is far less likely. We simply see better risk/reward profiles in the Fund’s other quality holdings.”
2. First American Financial Corporation (NYSE:FAF)
Number of Hedge Fund Holders: 30
Dividend Yield as of February 24: 3.13%
Lakewood Capital’s Stake Value: $93,454,000
First American Financial Corporation (NYSE:FAF), an American financial services company, announced a raise to its quarterly dividend in November, with shareholder payouts increasing by 11% to $0.51 per share. The stock’s dividend yield stands at 3.13% as of February 24. First American Financial Corporation (NYSE:FAF) has increased its dividend at a CAGR of 11.2% over the past five years, earning its place as one of the best dividend stocks in Anthony Bozza’s portfolio.
The number of hedge funds tracked by Insider Monkey holding stakes in First American Financial Corporation (NYSE:FAF) stood at 30 at the end of Q4, up from 29 in the previous quarter. Lakewood was one of those funds, owning 1.19 million shares, a drop of 13% quarter-over-quarter.
According to Barclays, the finance sector and investment income are well-positioned to benefit from rising rates. Considering this, the firm raised its price target on First American Financial Corporation (NYSE:FAF) to $92 in February, with an ‘Overweight’ rating on the shares.
1. Jackson Financial Inc. (NYSE:JXN)
Number of Hedge Fund Holders: 21
Dividend Yield as of February 24: 5.00%
Lakewood Capital’s Stake Value: $44,549,000
Jackson Financial Inc. (NYSE:JXN), an American life insurance company, initiated its dividend policy in November 2021. The company pays a quarterly dividend of $0.50 per share, with a solid dividend yield of 5.00% as of February 24. On January 25, Jefferies initiated its coverage on Jackson Financial Inc. (NYSE:JXN) with a ‘Buy’ rating and $52 price target, with the firm being bullish on the company’s cash flows.
In Q4 2021, Lakewood Capital increased its stake in Jackson Financial Inc. (NYSE:JXN) by 14% to 1.07 million shares worth over $44.5 million. The company represented 1.89% of Anthony Bozza’s 13F portfolio.
Lakewood was one of the 21 hedge funds tracked by Insider Monkey that reported owning stakes in Jackson Financial Inc. (NYSE:JXN) as of the end of 2021, down from 22 in the previous quarter. The total value of those stakes was roughly $450 million.
Curreen Capital mentioned Jackson Financial Inc. (NYSE:JXN) in its Q4 2021 investor letter. Here is what the firm had to say:
“We cut a weed with Conduent to water a flower with Jackson. We added to Jackson, which has blossomed into a flower. In our Q3 letter I highlighted the limited information on this recent spinoff – and management has capably addressed many of the unknowns. On capital allocation, Jackson initiated a dividend and a share repurchase plan for about 10% of the company. Management then moved quickly and bought back at least 5% of Jackson’s shares at very attractive prices. Management refinanced its short-term debt on attractive terms. A director and an executive also bought stock in the quarter. Each of these actions made Jackson more of a flower. We averaged up (paying $32.78/share) and made Jackson our largest holding.”
For additional compelling dividend stock picks, take a look at 10 Dividend Aristocrats with Over 3% Yield and 10 High Yield Dividend Kings for 2022
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Best Monthly Dividend Stocks to Buy for 2022
- Early Retirement Portfolio: 15 Stocks to Live Off Dividends
- 10 High Yield REIT Dividend Stocks For 2022
Disclosure. None. 10 Best Dividend Stocks According to Anthony Bozza’s Lakewood Capital is originally published on Insider Monkey.
