In this article, we discuss the 10 best dividend stocks to buy according to Al Gore and David Blood.
Generation Investment Management is one of the most successful equity funds when it comes to sustainable investing. Co-founded in 2004 by former Vice President Al Gore and former head of Goldman Sachs Asset Management David Blood, the fund has offices in London, New York, and San Francisco. It employs about 100 people.
Al Gore and his partner focus on long-term investing while also betting on companies that make the world a better place. Likewise, they only invest in stocks of companies that manage their economic, social, and environmental performance. Additionally, the investment firm only invests in companies that provide products and services with a low carbon footprint.
Al Gore deploys a bottom-up fundamental analysis-driven approach while investing.
Generation Investment Management portfolio was valued at about $23.86 billion as of the end of the first quarter. Over the last four quarters, the equity fund has averaged 55.17% in returns. While in the first quarter of 2021 the fund’s return was 6.99%.
Among the notable holdings of Al Gore and David Blood’s fund as of the first quarter of 2021 are Palo Alto Networks Inc (NYSE: PANW), Alphabet Inc Class A (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Alibaba Group Holding Limited (NYSE: BABA).
Generation Investment Management holds more than 1.06 million shares in Microsoft (NASDAQ: MSFT) worth over $250.19 million, representing 1.04% of their portfolio. The fund has trimmed stakes in the firm by 1% in the past few months. On June 7, Morgan Stanley analyst Keith Weiss said he was bullish on Microsoft (NASDAQ: MSFT) and reiterated an “Overweight” rating and set a price target at $300.
Amazon.com, Inc. (NASDAQ: AMZN) is also part of Al Gore and David Blood’s portfolio. The stock is a new arrival on Al Gore and David Blood’s portfolio, as their hedge fund bought about 302,175 shares of the company, worth $934.954 million. There were 243 hedge funds in our database that held stakes in Amazon.com, Inc. (NASDAQ: AMZN) in the first quarter of 2021, compared to 273 funds in the fourth quarter. Amazon ranks 3rd in our list of the 30 Most Popular Stocks Among Hedge Funds
Generation Investment Management also has a significant holding in Alibaba Group Holding Limited (NYSE: BABA). Al Gore and David Blood owns 2.99 million shares of the company, worth $679.63 million, representing 2.84% of their portfolio. As of the first quarter of 2021, there were 135 hedge funds in Insider Monkey’s database that held stakes in Alibaba Group Holding Limited (NYSE: BABA), compared to 156 funds in the fourth quarter of 2020.
David Blood of Generation Investment Management
But in this article our focus would be on dividend stocks in the Q1 portfolio of Al Gore and David Blood.
Before investing, you should practice caution and do a lot of research, as financial volatility is making things difficult even for the smart investors. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 best dividend stocks to buy according to Al Gore and David Blood.
Best Dividend Stocks to Buy According to Al Gore and David Blood
10. The Charles Schwab Corporation (NYSE: SCHW)
Generation Investment’s Stake Value: $1,150,887,000
Percentage of Generation Investment’s 13F Portfolio: 4.82%
Dividend Yield: 0.99%
Number of Hedge Fund Holders: 76
The Charles Schwab Corporation (NYSE: SCHW) offers banking, mercantile banking, an online trading platform, and capital management counseling services to both retail and established clients. The company was incorporated in 1971 and is placed tenth on the list of the 10 best dividend stocks to buy according to Al Gore and David Blood. Schwab stock has returned more than 96.48% to investors over the course of the past 12 months.
Like Palo Alto Networks Inc (NYSE: PANW), Alphabet Inc Class A (NASDAQ: GOOGL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Alibaba Group Holding Limited (NYSE: BABA), The Charles Schwab Corporation (NYSE: SCHW) is a notable stock in Generation Investment’s Q1 portfolio. On April 27, the company declared a quarterly dividend of $0.18 per share, in line with the previous. The forward yield is 0.97%. On April 15, the company posted earnings for the first quarter of 2021, reporting earnings per share of $0.84, beating market predictions by $0.01. On April 27, Credit Suisse upgraded the stock to “Outperform” from “Neutral,” raising the price target to $86.00 from $74.00.
At the end of the first quarter of 2021, 76 hedge funds in the database of Insider Monkey held stakes worth $4.91 billion in The Charles Schwab Corporation (NYSE: SCHW), up from 61 the preceding quarter worth $4.47 billion.
ClearBridge Investments, in their first quarter 2021 investor letter, mentioned The Charles Schwab Corporation. Here is what the fund said:
“Higher rates also boosted Charles Schwab, specifically mortgage-backed securities yields, which represent the majority of its investment portfolio. Schwab has also seen stronger organic growth from a stronger economy and equity markets, which has led to more account openings and higher trading activity.”
9. Microchip Technology Incorporated (NASDAQ: MCHP)
Generation Investment’s Stake Value: $57,581,000
Percentage of Generation Investment’s 13F Portfolio: 0.24%
Dividend Yield: 1.08%
Number of Hedge Fund Holders: 42
Microchip Technology Incorporated (NASDAQ: MCHP) is an American organization that produces microcomputers, mixed messages, correlation, and Flash-IP microprocessors. It was incorporated in 1989 and ranks ninth on the list of the 10 best dividend stocks to buy according to Al Gore and David Blood. Microchip Technology Incorporated (NASDAQ: MCHP) shares have gained about 50.09% over the last 12 months.
Microchip Technology Incorporated (NASDAQ: MCHP) announced a first quarter dividend of $0.18 per share, which was in line with the previous quarter’s dividend payout. The forward yield is 1.07%. On May 18, the company announced that it issued $1 billion in aggregate principal amount of senior secured notes. The notes were issued through a private placement. The proceeds will be used to repay its existing borrowings of $1B in principal amount of its outstanding 3.922% senior secured notes due 2021.
42 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the first quarter of 2021, down from 45 funds a quarter earlier.
Like Palo Alto Networks Inc (NYSE: PANW), Alphabet Inc Class A (NASDAQ: GOOGL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Alibaba Group Holding Limited (NYSE: BABA), Microchip Technology Incorporated (NASDAQ: MCHP) is a notable stock in Generation Investment’s Q1 portfolio.
8. Trane Technologies plc (NYSE: TT)
Generation Investment’s Stake Value: $348,419,000
Percentage of Generation Investment’s 13F Portfolio: 1.46%
Dividend Yield: 1.28%
Number of Hedge Fund Holders: 35
Trane Technologies plc (NYSE: TT) is an American company, which together with its subsidiaries, plans, produces, sells, and services climate control products for heating, venting, and transit solutions. It was founded in 1885 and ranked eighth on our list of the 10 best dividend stocks to buy according to Al Gore and David Blood. Trane Technologies plc (NYSE: TT) currently has a $44.3 billion market capitalization and was able to deliver a 99.18% return in the past 12 months.
On June 3, Trane Technologies plc (NYSE: TT) posted a dividend of $0.59 for the first quarter of 2021, in line with the previous. The company also posted quarterly earnings results on May 5, reporting earnings per share of $1.01 for the first three months of 2021, beating market predictions by $0.39. The revenue over the period was $3.02 billion, up 14.4% YoY, beating the estimates by $160 million. Al Gore and David Blood’s Generation Investment Management owns a $348.42 million stake in Trane Technologies plc (NYSE: TT).
Like Palo Alto Networks Inc (NYSE: PANW), Alphabet Inc Class A (NASDAQ: GOOGL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Alibaba Group Holding Limited (NYSE: BABA), Trane Technologies plc (NYSE: TT) is a notable stock in Generation Investment’s Q1 portfolio.
Here is what Nelson Roberts Investment Advisors has to say about Trane Technologies plc in their Investor Letter:
In its Q3 2020 investor letter, Nelson Roberts Investment Advisors, an investment advisory firm, highlighted a few stocks, and Trane Technologies plc was one of them. Here is what the fund said:
“Trane Technologies is a dominant player in commercial and residential heating, ventilation, and air-conditioning (HVAC) systems, as well as in transportation refrigeration. HVAC providers may see an uptick in commercial HVAC business, as having updated ventilation in buildings will be essential for employees to safely return to offices. We expect air filtration, air-quality assessment, and touchless access control solutions to become larger market opportunities due not only to COVID-19, but also the smoke from the disastrous west coast wildfires. Longer term, the shift towards sustainability and energy efficiency provide additional tailwinds for the company.”
7. Cognizant Technology Solutions Corporation (NASDAQ: CTSH)
Generation Investment’s Stake Value: $995,123,000
Percentage of Generation Investment’s 13F Portfolio: 4.17%
Dividend Yield: 1.36%
Number of Hedge Fund Holders: 33
Cognizant Technology Solutions Corporation (NASDAQ: CTSH) is an executive services company that provides consulting and computers and redistributing services globally. It was founded in 1994 and is ranked seventh on the list of the 10 best dividend stocks to buy according to Al Gore and David Blood. Corporation (NASDAQ: CTSH) has offered investors returns exceeding 27.85% over the course of the past 12 months.
On May 5, Corporation (NASDAQ: CTSH) declared a quarterly dividend of $0.24 per share in line with the previous. The forward yield is 1.35%.
The stock accounts for about 4.17% of Generation Investment’s portfolio, as the hedge fund owns a $995.12 million stake in the company. Hedge fund sentiment decreased for Cognizant Technology Solutions Corporation (NASDAQ: CTSH) by 39.39% in the first quarter of 2021. Insider Monkey’s data shows that 33 elite hedge funds held stakes in the company in the first quarter of 2021, down from 46 funds in the fourth quarter of 2020.
Like Palo Alto Networks Inc (NYSE: PANW), Alphabet Inc Class A (NASDAQ: GOOGL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Alibaba Group Holding Limited (NYSE: BABA), Cognizant Technology Solutions Corporation (NASDAQ: CTSH) is a notable stock in Generation Investment’s Q1 portfolio.
6. Baxter International Inc. (NYSE: BAX)
Generation Investment’s Stake Value: $1,769,716,000
Percentage of Generation Investment’s 13F Portfolio: 7.41%
Dividend Yield: 1.37%
Number of Hedge Fund Holders: 40
Baxter International Inc. (NYSE: BAX), through its subsidiaries, supplies a portfolio of health protection products globally. It was founded in 1931, and stands sixth on the list of 10 best dividend stocks to buy according to Al Gore and David Blood.
Baxter International Inc. (NYSE: BAX) posted earnings for the first quarter of 2021 on April 29. The company reported earnings per share of $0.76, beating market predictions by $0.11. The revenue for the first three months of 2021 was over $2.95 billion, up 5.4% YoY, beating the estimates by $50 million. On May 3, Baxter International Inc. (NYSE: BAX) declared a quarterly dividend of $0.28 per share, which was 14.3% higher than its prior dividend of $ 0.245. On May 24, Barclays rated the stock as “Equal Weight,” and set the price target at $93.00.
Al Gore and David Blood’s Generation Investment currently holds 20.98 million shares of Baxter International Inc. (NYSE: BAX) that amounts to $1.77 billion. Baxter International Inc. (NYSE: BAX) is the largest stock holding of Generation Investment, accounting for 7.41% of the overall portfolio. Generation Investment Management increased its stake in the healthcare company by 21% in the first quarter of 2021.
Like Palo Alto Networks Inc (NYSE: PANW), Alphabet Inc Class A (NASDAQ: GOOGL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Alibaba Group Holding Limited (NYSE: BABA), Baxter International Inc. (NYSE: BAX) is a notable stock in Generation Investment’s Q1 portfolio.
5. Becton, Dickinson and Company (NYSE: BDX)
Generation Investment’s Stake Value: $932,647,000
Percentage of Generation Investment’s 13F Portfolio: 3.90%
Dividend Yield: 1.38%
Number of Hedge Fund Holders: 65
Becton, Dickinson and Company (NYSE: BDX) is engaged in trading first-aid supplies, appliances, laboratory kits, and diagnostic products globally. The company was founded in 1897 and ranks fifth on the list of 10 best dividend stocks to buy according to Al Gore and David Blood.
On April 27, Becton declared a Q1 quarterly dividend of $0.83 per share, in line with the previous. The forward yield is 1.37%. On May 6, Becton posted quarterly earnings results, reporting earnings per share of $3.19 for the first three months of 2021, beating market predictions by $0.15.
The hedge fund run by Al Gore and David Blood owns more than 3.8 million shares in Becton, Dickinson and Company (NYSE: BDX) worth over $932.65 million, representing 3.9% of their investment portfolio. The company is getting the attention of the smart money, as 65 hedge funds tracked by Insider Monkey reported owning stakes in the company in Q1 2021.
4. TE Connectivity Ltd. (NYSE: TEL)
Generation Investment’s Stake Value: $792,512,000
Percentage of Generation Investment’s 13F Portfolio: 3.32%
Dividend Yield: 1.47%
Number of Hedge Fund Holders: 39
TE Connectivity Ltd. (NYSE: TEL) is an American tech company that designs and produces clamps and detectors for several business units. It was incorporated in 2000 and stands fourth on the list of 10 best dividend stocks to buy according to Al Gore and David Blood. TE Connectivity stock has returned more than 66.79% to investors during the course of the past 12 months.
It declared a quarterly dividend of $0.50 per share on March 11, which was a 4.2% increase from its prior dividend of $0.48. The forward yield is 1.46%. On April 21, TE Connectivity posted $3.7 billion net sales for the Q2 of 2021, beating market predictions by $190 million. The company also reported its revenue, which was $3.7 billion, beating the estimates by $190 million.
The hedge fund chaired by Al Gore and David Blood holds close to 6.14 million shares in the company worth over $792.51 million. It is the second largest holding of the London-based fund. Generation Investment’s stake in TE Connectivity stock decreased by 8% in the past few months. At the end of the first quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $2.34 billion in TE Connectivity Ltd. (NYSE: TEL), same as the preceding quarter worth $2.16 billion.
ClearBridge Investments mentioned TE Connectivity Ltd. in its Q1 2021 investor letter. Here is what the fund said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included information technology (IT), where TE Connectivity performed well but trailed the sector in the first quarter after a strong 2020.”
3. Analog Devices, Inc. (NASDAQ: ADI)
Generation Investment’s Stake Value: $851,296,000
Percentage of Generation Investment’s 13F Portfolio: 3.56%
Dividend Yield: 1.66%
Number of Hedge Fund Holders: 50
Analog Devices, Inc. (NASDAQ: ADI) is an American international optoelectronic company focusing on data transformation, signal handling, and power control technology. It was founded in 1965 and ranks third on the list of 10 best dividend stocks to buy according to Al Gore and David Blood. On the other hand, Generation Investment’s bet on Analog Devices is also paying off. The company stock is up 37.29% over the last 12 months.
On May 19, the company declared $0.69 quarterly dividends for the first three months of 2021, in line with previous. The forward yield is 1.64%. On May 20, Bernstein upgraded Analog Devices from “Market Perform” to “Outperform” with a price target of $185.00.
Generation Investment holds more than 5.49 million shares in the firm worth over $851.30 million, representing 3.56% of their investment portfolio, making it the most significant stakeholder. Generation Investment has trimmed their Analog stake by 7% in Q1 2021.
Weitz Investment Management, in their Q4 2020 investor letter, mentioned Analog Devices. Here is what the fund said:
“Analog Devices benefited from several global, long-wave trends such as automation, electric vehicles and the 5G network build-out. The company’s quarterly sales into the auto, industrial and communications sectors exceeded expectations, giving the stock a lift.”
2. Texas Instruments Incorporated (NASDAQ: TXN)
Generation Investment’s Stake Value: $427,508,000
Percentage of Generation Investment’s 13F Portfolio: 1.79%
Dividend Yield: 2.18%
Number of Hedge Fund Holders: 42
Texas Instruments Incorporated (NASDAQ: TXN) is a tech company that produces microelectronics and various consolidate circuits, which it sells to microelectronics makers and producers globally. The company was founded in 1930 and stands second on the list of 10 best dividend stocks to buy according to Al Gore and David Blood.
On April 27, Texas Instruments Incorporated (NASDAQ: TXN) posted first quarter of 2021 results, reporting earnings per share of $1.85, beating market predictions by $0.25. The revenue for the first three months of 2021 was over $4.29 billion, up 28.8% YoY, beating the estimates by $310 million. It recently announced a dividend of $1.02 per share for the first quarter of 2021, consistent with the previous dividend payout. On April 28, investment advisory Longbow Research initiated coverage on Texas stock with a “Buy” rating and a price target of $225.00.
Generation Investment holds more than 2.26 million shares in the firm, worth over $427.51 million. This represents 1.79% of their portfolio. Generation Investment stake in Texas Instruments Incorporated (NASDAQ: TXN) stock decreased by 28% in the past few months, the latest data reveals. There were 42 hedge funds in our database that held stakes in Texas Instruments in the first quarter of 2021, compared to 56 funds in the fourth quarter of 2020.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks, and Texas Instruments was one of them. Here is what the fund said:
“Analog chipmaker Texas Instruments, meanwhile, benefited from better inventory management than peers. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
1. Cisco Systems, Inc. (NASDAQ: CSCO)
Generation Investment’s Stake Value: $1,202,466,000
Percentage of Generation Investment’s 13F Portfolio: 5.04%
Dividend Yield: 2.75%
Number of Hedge Fund Holders: 59
Cisco Systems, Inc. (NASDAQ: CSCO) is an American international tech conglomerate. It was founded in 1984 and tops the list of 10 best dividend stocks to buy according to Al Gore and David Blood.
Cisco Systems is among the best stocks in Generation Investment’s portfolio that pay a regular and healthy dividend to shareholders. On May 26, Cisco declared a quarterly dividend of $0.37 per share, in line with the previous dividend of $0.36 per share. On May 19, Cisco Systems posted quarterly results, reporting earnings per share of $0.83 for the third quarter of 2021, beating market predictions by $0.01. The revenue over the period was $12.8 billion, beating the estimates by $230 million.
Generation Investment is the biggest stakeholder in Cisco, which holds 23.25 million shares in the company worth over $1.20 billion, representing 5.04% of their portfolio.
ClearBridge Investments, in its first quarter 2021 investor letter, mentioned Cisco Systems. Here is what ClearBridge Investments has to say about Cisco Systems in its letter:
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
You can also take a peek at 10 Blue Chip Dividend Stocks Hedge Funds Are Buying and 14 Best European Dividend Stocks To Buy.
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Disclosure: None. 10 Best Dividend Stocks to Buy According to Al Gore and David Blood is originally published on Insider Monkey.
