In this article, we discuss the 10 best dividend stocks according to billionaire Larry Robbins’ Glenview Capital.
Larry Robbins, an American hedge fund manager, founded Glenview Capital Management in 2000. He is mainly known for investing in companies that have shown stable growth over the years and belong to steady industries. He instituted this investment philosophy when he worked at Omega Advisors as an equity analyst before founding his own hedge fund. He later became the partner of the firm. Currently, he is serving as the CEO and portfolio manager of Glenview Capital.
Glenview delivered solid returns in 2012 by betting on healthcare stocks, which, according to Robbins, benefitted from Obamacare. The hedge fund continued to deliver gains in the following years as well, returning 84% in 2013. According to CNBC, Robbins again started investing in health and travel stocks in mid-2020, as these sectors gained importance due to the pandemic. His long-term healthcare bets resulted in his hedge fund returning 10.3% in 2021, while the hedge fund’s main healthcare-heavy fund was up 21.1% for the year.
As of Q3 2021, Glenview Capital’s 13F portfolio value decreased by 9% to $5.4 billion from $5.9 billion. The number of holdings also decreased to 59 from 64 during the quarter. Considering Robbins’ inclination toward healthcare stocks, the sector represented nearly half of the portfolio, while the top three holdings constituted around 25% of the fund’s 13F portfolio. Some of the major holdings of Glenview Capital include Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB), and Uber Technologies, Inc. (NYSE:UBER).
Larry Robbins of Glenview Capital
Our Methodology:
In this article, we will focus on the dividend stocks in Larry Robbins’ portfolio. For this list, we collected data from Glenview Capital’s 13F portfolio as of Q3.
10 Best Dividend Stocks According to Billionaire Larry Robbins’ Glenview Capital
10. Baxter International Inc. (NYSE:BAX)
Number of Hedge Fund Holders: 42
Dividend Yield as of February 9: 1.26%
Glenview Capital’s Stake Value: $174,350,000
An American healthcare company, Baxter International Inc. (NYSE:BAX) cut its annual dividend from $0.98 to $0.51 per share during 2015 because of the company spin-off. However, the company started growing its dividend again and currently pays a quarterly dividend of $0.28 per share, up 14% from the previous dividend. This marked the company’s sixth consecutive year of dividend growth. The stock’s dividend yield stands at 1.26%.
In Q3 2021, Glenview Capital held a stake worth over $174.3 million in Baxter International Inc., after increasing its position by 86%. The company accounted for 3.19% of Larry Robbins’ portfolio. As Baxter International Inc. completed the acquisition of Hill-Rom Holdings, an American medical technology company, analysts propound a positive stance on the stock. In January, Morgan Stanley called the acquisition a ‘transformative deal’ and upgraded Baxter International Inc. to Overweight, while raising the stock’s price target to $110.
At the end of Q3 2021, 42 hedge funds tracked by Insider Monkey held stakes in Baxter International Inc., down from 46 in the previous quarter. The total value of these stakes is around $3.5 billion.
Like Alphabet Inc., Meta Platforms, Inc., and Uber Technologies, Inc., Baxter International Inc. is also one of the important holdings of Glenview Capital in Q3.
Cooper Investors mentioned Baxter International Inc. in its Q3 2021 investor letter. Here is what the firm has to say:
“During the quarter we exited our position in Baxter, having originally bought in 2017 as a Low Risk Turnaround with clear Stalwart attributes. In essence, the core businesses were highly durable, providing life sustaining or saving medical products such as IV medication or pumps and dialysis machines.
They had been mismanaged prior to the company spinning off its biopharmaceutical business in 2015 which had generated most of the Baxter’s operating profit. With a new CEO in Joe Almeida, who came with a successful track record leading another medical device company (Covidien) we identified three sources of value latency for the new standalone Baxter.
Firstly, optimising the cost structure. Baxter were successful here – they were able to effectively double operating margins from low single digits to mid-to-high teens over a relatively short four-year period. Secondly, accelerating sales growth through a more focused R&D effort. This is inherently more difficult than cost optimisation and on this front success has been muted with only moderate impact to revenues from new product introductions. Finally, capital deployment through Baxter’s significantly under-levered balance sheet. Several smaller bolt-on acquisitions were nicely complementary to the existing portfolio, but in early September the company announced the acquisition of Hil-Rom Holdings, a medical device company with leading positions in bed systems and patient monitoring. The deal is significant at US$12.5bn in size, and exhausts all balance sheet latency in one fell swoop.
Whilst it is “EPS accretive” we believe the high single digit ROIC management are targeting over five years is most reflective of the financial merits of the deal. Put another way, despite visions of providing digital and connected healthcare (think a Baxter IV pump combined with a Hil-Rom smart bed), ultimately the combined entity will likely remain a low-to-mid-single digit grower. Baxter look like they are getting bigger but not necessarily better.
This combination of uncertainty around the merits of the Hil-Rom acquisition and the underwhelming performance on the product development side of the business led us to conclude that the investment proposition today is less attractive relative to other opportunities.”
9. AmerisourceBergen Corporation (NYSE:ABC)
Number of Hedge Fund Holders: 44
Dividend Yield as of February 9: 1.29%
Glenview Capital’s Stake Value: $225,283,000
In Q3 2021, Glenview Capital increased its stake in AmerisourceBergen Corporation (NYSE:ABC), an American drug wholesale company, by 10% and held shares worth over $225.2 million. The company constituted 4.12% of Larry Robbins’ portfolio.
The number of hedge funds tracked by Insider Monkey having stakes in AmerisourceBergen Corporation grew to 44 in Q3, from 43 in the previous quarter. The consolidated value of these stakes is over $1.2 billion. Citadel Investment Group was also one of the major shareholders of the Pennsylvania-based company in Q3, holding shares worth $115.5 million.
Appreciating the company’s excellent execution and stable pricing trends, in February, both Mizuho and Baird lifted their price targets on AmerisourceBergen Corporation to $139 and $179, respectively. On November 4, 2021, the company announced a 4.5% increase in its quarterly dividend at $0.46 per share, with a dividend yield of 1.29%. AmerisourceBergen Corporation maintains a 17-year track record of consistent dividend growth, increasing its dividend at a CAGR of 5% in the past five years.
Heartland Advisors mentioned AmerisourceBergen Corporation in its Q3 2021 investor letter. Here is what the firm has to say:
“The ABCs of quality.AmerisourceBergen Corp. (ABC), a leading national pharmaceutical distributor, provides an example of our approach. The company has been quietly bolstering its business model during the past few years to include animal health products for the European market and an expanded line of higher-margin, value-added services that reach beyond drug distribution. During these efforts, valuations for the company have been under pressure due to liability issues stemming from opioid litigation as well as concerns about increased scrutiny of drug prices by politicians.
Our team has been following these developments and believes the strides management has made on the business side are not being fully recognized by the market. As more clarity has emerged related to opioid litigation, we’ve increased the portfolio’s stake in AmerisourceBergen and believe the investment provides the portfolio with additional exposure to a high-quality business that is well positioned to grow despite operating in a mature industry.”
8. DuPont de Nemours, Inc. (NYSE:DD)
Number of Hedge Fund Holders: 51
Dividend Yield as of February 9: 1.62%
Glenview Capital’s Stake Value: $103,510,000
DuPont de Nemours, Inc. (NYSE:DD) is an American company that provides tech-based solutions to its consumers. On February 9, Deutsche Bank appreciated the company’s Q4 earnings and lifted its price target on the stock to $100, while maintaining a Buy rating on the shares.
In February 2022, DuPont de Nemours, Inc. announced a 10% increase in its quarterly dividend at $0.33 per share, with a dividend yield of 1.62%. Moreover, through 2021, the company paid $0.6 billion in dividends to shareholders. In Q3 2021, Glenview Capital held over 1.5 million shares in DuPont de Nemours, Inc., valued at $103.5 million. The company constituted 1.89% of Larry Robbins’ portfolio, as his hedge fund increased its stake by 23% during the quarter.
As per Insider Monkey’s Q3 data, 51 hedge funds reported owning stakes in DuPont de Nemours, Inc., down from 57 in the previous quarter. The total value of these stakes is nearly $1.5 billion.
Rhizome Partners mentioned DuPont de Nemours, Inc. in its Q1 2021 investor letter. Here is what the firm has to say:
“We have written extensively about the anticipated DuPont’s Reverse Morris Trust merger with International Flavors and Fragrances (IFF) in January of 2021. During the quarter, DuPont shares traded up significantly in anticipation of the deal. We tendered about 40% of our DuPont shares for IFF and received about half of the allocation due to pro-ration. Investors are finally starting to appreciate DuPont’s effort to cut costs, streamline operations, and spin off companies into pure-play companies that trade at higher multiples. We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as DuPont.”
7. Norfolk Southern Corporation (NYSE:NSC)
Number of Hedge Fund Holders: 46
Dividend Yield as of February 9: 1.82%
Glenview Capital’s Stake Value: $66,463,000
Norfolk Southern Corporation (NYSE:NSC), an American transporter of industrial products, saw a decline in the number of hedge funds having stakes in it. 46 hedge funds tracked by Insider Monkey reported owning stakes in the company, down from 58 in the preceding quarter. These stakes hold a value of over $1 billion.
Norfolk Southern Corporation has paid dividends to shareholders consecutively for the past 158 quarters. On January 25, the company announced a 14% growth in its quarterly dividend at $1.24 per share, with a dividend yield of 1.82%. In 2022, Norfolk Southern Corporation expects the dividend payments to be between 35% to 40% of net income. In January, Goldman Sachs raised its price target on Norfolk Southern Corporation to $320, with a Conviction Buy rating on the shares, appreciating the company’s cost control and productivity efforts.
Glenview Capital started building its position in Norfolk Southern Corporation during the fourth quarter of 2020. In Q3 2021, the hedge fund held shares worth over $66.4 million in the company, which represented 1.21% of Larry Robbins’ portfolio.
6. FMC Corporation (NYSE:FMC)
Number of Hedge Fund Holders: 28
Dividend Yield as of February 9: 1.83%
Glenview Capital’s Stake Value: $70,693,000
FMC Corporation (NYSE:FMC) is an American chemical manufacturing company that specializes in agricultural sciences. This January, Redburn initiated its coverage on the stock with a Buy rating. In 2022 so far, FMC Corporation delivered a 6.3% return to shareholders, as of the market close of February 8.
In December 2021, FMC Corporation hiked its quarterly dividend by 10% at $0.53 per share, which marked the company’s fourth consecutive year of dividend growth. The stock’s current dividend yield stands at 1.83%. In Q3 2021, Glenview Capital held a roughly $70.7 billion worth of stake in FMC Corporation. The company represented 1.29% of Larry Robbins’ portfolio. Along with this, the hedge fund also held considerable position in Alphabet Inc., Meta Platforms, Inc., and Uber Technologies, Inc. in Q3.
In Q3 2021, 28 hedge funds tracked by Insider Monkey held a stake worth roughly $350 million in FMC Corporation. In comparison, 33 hedge funds held stakes in the company in the previous quarter. Cardinal Capital was the company’s largest shareholder in Q3, owning shares worth over $85.2 million.
Tweedy, Browne Company LLC mentioned FMC Corporation in its Q3 2021 investor letter. Here is what the firm has to say:
“FMC Corp. provides crop chemicals for the agriculture industry. Crop chemicals protect farmers’ fields from insects, fungus, and weeds, which allows them to increase their crop yields. As a result, farmers are more than willing to pay a price premium for effective products. Similar to pharmaceutical companies, crop protection products also are often “patented,” which gives them pricing power. In addition, the development time and investment, combined with navigating the regulatory process in a variety of jurisdictions, and then achieving distribution at scale, provide immense barriers to entry in the industry. Small companies may be able to conduct research on active ingredients, but it will be difficult for them to “commercialize” them. Given all of this, FMC has enjoyed a high return on capital and has been a very profitable business, earning a 27% EBITDA margin and a 25% ROE including goodwill for the year 2020.
FMC is diversified geographically and by crop, which should serve to make it a less cyclical business. It also has, in our view, a very good new product pipeline, and aims to grow its revenues at 5% to 7% annually through 2023, and its EBITDA at 7% to 9% annually through 2023. The company also has had some insider purchases recently from both its CEO and CFO…” (Click here to see the full text)
5. Cigna Corporation (NYSE:CI)
Number of Hedge Fund Holders: 58
Dividend Yield as of February 9: 1.93%
Glenview Capital’s Stake Value: $264,777,000
Cigna Corporation (NYSE:CI) is an American healthcare and insurance company. On February 3, Cigna Corporation increased its dividend by 12% at $1.12 per share, with a dividend yield of 1.93%.
Of the 867 hedge funds tracked by Insider Monkey, 58 hedge funds held stakes in Cigna Corporation in Q3, down from 63 in the preceding quarter. These stakes hold a consolidated value of over $2.3 billion.
In Q3 2021, Glenview Capital increased its stake in Cigna Corporation by 3% and held a stake worth over $264.7 million. The company made up 4.85% of Larry Robbins’ portfolio. In January, Bernstein presented a positive long-term outlook on Cigna Corporation and lifted its price target on the stock to $258, with a Market Perform rating on the shares.
Dodge & Cox Stock Fund mentioned Cigna Corporation 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.”
4. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 63
Dividend Yield as of February 9: 1.93%
Glenview Capital’s Stake Value: $64,575,000
In January, RBC Capital appreciated the Q4 earnings beat of Union Pacific Corporation (NYSE:UNP), an American transport company. Along with this, the firm also highlighted the company’s strong pricing and operating ratio improvement and raised its price target on the stock to $271, while keeping an Outperform rating on the shares.
As per Insider Monkey’s Q3 data, 63 hedge funds held stakes in Union Pacific Corporation, valued at $4.88 billion. In the previous quarter, 69 hedge funds held positions in the company, with stakes worth over $5 billion.
Union Pacific Corporation has been a dividend-paying stock for the past 32 years, with a 14-years streak of dividend growth. In December 2021, the company increased its quarterly dividend by 10% at $1.18 per share, with a dividend yield of 1.93%. Glenview Capital started investing in Union Pacific Corporation during the fourth quarter of 2020 with shares worth over $13.2 million. In Q3 2021, the hedge fund’s position in the company has increased to over $64.5 million worth of stakes, which accounted for 1.18% of Larry Robbins’ portfolio.
Vltava Fund mentioned Union Pacific Corporation in its recently-published Q4 2021 investor letter. Here is what the firm has to say:
“Regarding the list of titles held, the composition of the Vltava Fund portfolio did not change much throughout 2021. We sold two positions and we incorporated two new ones into our portfolio. Right at the beginning of the year, we sold the shares of Union Pacific railways. After their price had risen greatly, they no longer seemed sufficiently attractive to us.”
3. ViacomCBS Inc. (NASDAQ:VIAC)
Number of Hedge Fund Holders: 64
Dividend Yield as of February 9: 2.77%
Glenview Capital’s Stake Value: $105,406,000
ViacomCBS Inc. (NASDAQ:VIAC) is an American mass media and entertainment company. In Q3 2021, Glenview Capital held shares worth over $105.4 million in the company, which represented 1.93% of its 13F portfolio. The hedge fund started investing in the company during the fourth quarter of 2019.
ViacomCBS Inc. currently offers a quarterly dividend of $0.24 per share, which yields 2.77%. The company has increased its dividend at a CAGR of 7.8% in the past five years and possesses a safe payout ratio of 25.6%. In January, KeyBanc upgraded ViacomCBS Inc. to Sector Weight from Underweight, due to the growing direct-to-consumer subscribers.
In Q3 2021, 64 hedge funds in Insider Monkey’s database reported owning stakes in ViacomCBS Inc., down significantly from 74 in the previous quarter. The total value of these stakes is $1.25 billion.
2. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 52
Dividend Yield as of February 9: 3.27%
Glenview Capital’s Stake Value: $22,513,000
Amgen Inc. (NASDAQ:AMGN) is an American biopharmaceutical company that specializes in human therapeutics. Appreciating the company’s recently proposed guidance, in February, both BMO Capital and Wells Fargo raised the stock’s price target to $240 and $250, respectively, with the latter maintaining an Equal Weight rating on the shares.
Two Sigma Advisors was the largest shareholder of Amgen Inc. in Q3, owning nearly 2 million shares in the company. Overall, 52 hedge funds tracked by Insider Monkey held stakes in the company in Q3, down from 53 in the preceding quarter. These stakes hold a value of around $1.45 billion.
On December 3, 2021, Amgen Inc. announced a quarterly dividend of $1.94 per share, presenting a 10.2% growth from the previous dividend. The stock’s dividend yield stands at 3.27%. Amgen Inc. has been paying dividends to shareholders consistently for the past 11 years, with a five-year CAGR of 11.97%. In Q3 2021, Glenview Capital increased its position in Amgen Inc. by 47% and held shares worth over $22.5 million. The company accounted for 0.41% of Larry Robbins’ portfolio.
ClearBridge Investments mentioned Amgen Inc. in its recently-published Q3 2021 investor letter. Here is what the firm has to say:
“In health care, Amgen, a biotechnology company, has endured several pipeline setbacks recently, including a slow transition of its Lumakras treatment into first-line lung cancer, a slower than expected development of its treatment for myeloma as well as the company’s asthma treatment Tezepelumab missing its primary endpoint in a Phase III study. We remain positive on the stock, with Amgen’s investments in biosimilars and its pipeline part of our long-term thesis.”
1. Organon & Co. (NYSE:OGN)
Number of Hedge Fund Holders: 35
Dividend Yield as of February 9: 3.28%
Glenview Capital’s Stake Value: $24,695,000
Organon & Co., an American pharmaceutical company, was one of the latest acquisitions of Glenview Capital in Q3. The hedge fund started building its position in the company with shares worth roughly $24.7 million, which represented 0.45% of Larry Robbins’ portfolio.
In August 2021, Organon & Co. initiated its dividend policy, paying a quarterly dividend of $0.28 per share, with a dividend yield of 3.28%. The company’s payout ratio stands at 8.79%, which is considered healthy by analysts. As of the market close of February 8, Organon & Co. delivered an 11.04% return to shareholders in 2022 so far.
The number of hedge funds tracked by Insider Monkey having stakes in Organon & Co. declined to 35 in Q3, from 44 in the previous quarter. These stakes hold a consolidated value of over $332.3 million. Among these hedge funds, AQR Capital Management held the largest stake in the company, worth over $71.2 million.
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This article is originally published at Insider Monkey.
