In this article, we will discuss the 10 best dividend stocks to buy according to Frank Fu’s CaaS Capital. If you want to skip our detailed analysis of Fu’s history, investment philosophy, and hedge fund performance, go directly to the 5 Best Dividend Stocks to Buy According to Frank Fu’s CaaS Capital.
Frank Fu works as portfolio manager for CaaS Capital, a New York-based hedge fund. The firm invests based on fundamentals of companies operating mostly in the emerging markets, using quant models to minimize frictional cost in its hedging and derivative transactions.
The firm’s 13F portfolio is valued at nearly $9.24 billion as of the end of the first quarter of 2021. In 2020 the hedge fund posted a return of 51.22% compared to the 18.25% return posted by SPDR S&P 500 ETF Trust (NYSE: SPY).
As of the first quarter of 2021, Frank Fu’s CaaS Capital holds shares in several big companies like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and NVIDIA Corporation (NASDAQ: NVDA).
In Microsoft Corporation (NASDAQ: MSFT), Frank Fu owns 67,878 shares worth more than $16 million. The investment covers 0.17% of the fund’s portfolio. Frank Fu’s CaaS Capital increased its stake in the company by 181% in the first quarter. On July 11, Microsoft Corporation (NASDAQ: MSFT) announced that it will be buying cybersecurity company RiskIQ. Microsoft Corporation (NASDAQ: MSFT) will pay the company more than $500 million in cash. On June 16, Microsoft Corporation (NASDAQ: MSFT) declared a quarterly dividend of $0.56 per share, in line with the previous.
Frank Fu’s CaaS Capital owns 65,784 shares in Facebook, Inc. (NASDAQ: FB) after increasing its stake by 6,446% in Q1. Facebook, Inc. (NASDAQ: FB) gained 46.62% over the past 12 months. On June 2, KGI Securities initiated a coverage on Facebook, Inc. (NASDAQ: FB) with an “Outperform” rating and a price target of $420. There were 257 hedge funds in our database that held stakes in Facebook, Inc. (NASDAQ: FB) at the end of the first quarter, compared to 242 funds in the quarter earlier. Based on our calculations, Facebook, Inc. (NASDAQ: FB) ranks 1st in our list of the 30 Most Popular Stocks Among Hedge Funds.
Another notable stock in Frank Fu’s portfolio is NVIDIA Corporation (NASDAQ: NVDA). On July 8, Truist analyst William Stein raised the firm’s price target on NVIDIA Corporation (NASDAQ: NVDA) to $910 from $768 and maintained a “Buy” rating on the shares. The shares of NVIDIA Corporation (NASDAQ: NVDA) rallied 99.46% in the last 12 months. On June 28, NVIDIA Corporation (NASDAQ: NVDA) partnered with Alphabet Inc. (NASDAQ: GOOG) Cloud to start the AI-on-5G Innovation Lab, which allows network construction players and AI software partners to adopt solutions that will help speed up digital cities, smart factories, and other developed applications.
In this article, however, our focus would be on the dividend-paying stocks in CaaS Capital’s Q1 portfolio.
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 and industry outlook in mind, let’s start the list of the 10 best dividend stocks to buy according to Frank Fu’s CaaS Capital. We used the hedge fund’s Q1 holdings data for this analysis.
Best Dividend Stocks to Buy According to Frank Fu’s CaaS Capital
10. Janus Henderson Group plc (NYSE: JHG)
Fu’s Stake Value: $10,894,000
Percentage of Frank Fu’s 13F Portfolio: 0.11%
Dividend Yield: 4.05%
Number of Hedge Fund Holders: 28
Janus Henderson Group plc (NYSE: JHG) offers financial products to individuals, mediators, and institutional investors across the globe. It was founded in 1934 and ranks tenth on the list of 10 best dividend stocks to buy according to Frank Fu’s CaaS Capital. Janus Henderson Group plc (NYSE: JHG) gained about 93.63% over the last 12 months.
On July 12, Deutsche Bank raised the price target on the stock to $38 from $32. The firm maintains a “Hold” rating on the stock. On April 29, Janus Henderson posted a quarterly dividend of $0.38 per share, which was a 5.6% increase from its prior dividend of $0.36. The company also declared its earnings per share for the first quarter of 2021. The earnings per share was $0.9, beating market predictions by $0.08. In addition, the revenue over the period was $644 million, up 16.1% YoY, beating the estimates by $14.15 million.
Just like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and NVIDIA Corporation (NASDAQ: NVDA), Janus Henderson Group plc (NYSE: JHG) is one of the best stocks to buy according to Frank Fu’s CaaS Capital. CaaS Capital holds 349,724 shares in Janus Henderson Group plc (NYSE: JHG) worth $10.89 million, representing 0.11% of its portfolio. Hedge fund sentiment increased for Janus Henderson Group plc (NYSE: JHG) in the first quarter. Insider Monkey’s data shows that 28 elite hedge funds held stakes in the company in the first quarter, up from 22 funds a quarter earlier.
9. Solaris Oilfield Infrastructure, Inc. (NYSE: SOI)
Fu’s Stake Value: $11,700,000
Percentage of Frank Fu’s 13F Portfolio: 0.12%
Dividend Yield: 4.54%
Number of Hedge Fund Holders: 10
Solaris Oilfield Infrastructure, Inc. (NYSE: SOI) supplies oilfield products, services, and infrastructure solutions to its customers in the United States. It was founded in 2014, and the company stands ninth on the list of 10 best dividend stocks to buy according to Frank Fu’s CaaS Capital. Solaris Oilfield Infrastructure, Inc. (NYSE: SOI) has returned 40.29% to investors over the past 12 months.
On May 13, Solaris Oilfield Infrastructure, Inc. (NYSE: SOI) declared a quarterly dividend of $0.105 per share, in line with the previous. On May 3, the company posted earnings results for the first quarter of 2021. The earnings per share was -$0.04, in line with the previous. The revenue over the period was $28.7 million, beating the estimates by $0.83 million. On February 25, B. Riley Securities raised the price target on the stock to $14 from $12.50. The firm maintained a “Buy” rating.
The hedge fund run by Frank Fu owns 953,555 shares in Solaris Oilfield Infrastructure, Inc. (NYSE: SOI) worth $11.70 million, representing 0.12% of his investment portfolio. Todd J. Kantor’s Encompass Capital Advisors is the biggest stakeholder in the company, with 1.28 million shares worth $15.76 million. Just like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and NVIDIA Corporation (NASDAQ: NVDA), Solaris Oilfield Infrastructure, Inc. (NYSE: SOI) is one of the best stocks to buy according to Frank Fu’s CaaS Capital.
8. The Bank of Nova Scotia (NYSE: BNS)
Fu’s Stake Value: $272,000
Percentage of Frank Fu’s 13F Portfolio: 0.001%
Dividend Yield: 4.62%
Number of Hedge Fund Holders: 19
The Bank of Nova Scotia (NYSE: BNS) is a multinational banking and financial services company. The company was founded in 1832, and it ranks eighth on the list of 10 best dividend stocks to buy according to Frank Fu’s CaaS Capital. The Bank of Nova Scotia (NYSE: BNS) has returned 55.09% to investors in the last 3 months.
On June 8, Barclays analyst John Aiken upgraded The Bank of Nova Scotia (NYSE: BNS) to “Equal Weight” from “Underweight” with a price target of C$87, up from C$82. On June 1, The Bank of Nova Scotia (NYSE: BNS) posted earnings results for the second quarter of 2021. The earnings per share was C$1.90, beating market predictions by C$0.14. On February 23, The Bank of Nova Scotia (NYSE: BNS) declared a quarterly dividend of CAD 0.90 per share, in line with the previous.
CaaS Capital owns 4,342 shares in The Bank of Nova Scotia (NYSE: BNS) worth over $272.000. Schonfeld Strategic Advisors is the biggest stakeholder in the company, with 1.51 million shares worth $94.26 million. Just like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and NVIDIA Corporation (NASDAQ: NVDA), The Bank of Nova Scotia (NYSE: BNS) is one of the best stocks to buy according to Frank Fu’s CaaS Capital.
7. International Business Machines Corporation (NYSE: IBM)
Fu’s Stake Value: $240,000
Percentage of Frank Fu’s 13F Portfolio: 0.002%
Dividend Yield: 4.69%
Number of Hedge Fund Holders: 41
International Business Machines Corporation (NYSE: IBM) is a multinational technology company, which supplies integrated solutions and services. The company was founded in 1911 and is placed seventh on the list of 10 best dividend stocks to buy according to Frank Fu’s CaaS Capital. International Business Machines Corporation (NYSE: IBM) shares have gained about 19.58% in value over the last 12 months.
On July 8, International Business Machines Corporation (NYSE: IBM) made public its plans to acquire BoxBoat Technologies. It assists companies in digitization by acquiring automation and cloud-native technologies. BoxBoat will develop IBM’s existing investment in hybrid cloud services within the $200 billion cloud professional services market. On April 27, International Business declared a quarterly dividend of $1.64, which was a 0.6% increase from the prior dividend of $1.63. International Business Machines Corporation (NYSE: IBM) has increased its dividend consistently for the last 26 years.
Just like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and NVIDIA Corporation (NASDAQ: NVDA), International Business Machines Corporation (NYSE: IBM) is one of the best stocks to buy according to Frank Fu’s CaaS Capital.
Out of the hedge funds being tracked by Insider Monkey, Arrowstreet Capital is a leading shareholder in International Business Machines Corporation (NYSE: IBM), with 3.62 million shares worth more than $482 million.
6. Global Medical REIT Inc. (NYSE: GMRE)
Fu’s Stake Value: $3,423,000
Percentage of Frank Fu’s 13F Portfolio: 0.03%
Dividend Yield: 5.45%
Number of Hedge Fund Holders: 18
Global Medical REIT Inc. (NYSE: GMRE) acquires and manages real estate of hospitals, nursing facilities, and retirement homes. The company was incorporated in 2011 and is ranked sixth on the list of 10 best dividend stocks to buy according to Frank Fu’s CaaS Capital. The company’s shares have offered investors returns of 38.24% over the course of the past 12 months.
On July 9, Colliers Securities analyst Barry Oxford initiated a coverage on Global Medical REIT (NYSE: GMRE) and rated it as “Buy,” setting the price target at $18. On June 10, Global Medical REIT Inc. (NYSE: GMRE) declared a quarterly dividend of $0.205 per share, in line with the previous. On May 5, Global Medical REIT Inc. (NYSE: GMRE) posted funds from operations (FFO) for the first quarter of 2021. It reported FFO of $0.24, beating market predictions by $0.02. The revenue for the first three months of 2021 was $27.35 million, up 26.3% YoY, beating the estimates by $1.61 million.
Just like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and NVIDIA Corporation (NASDAQ: NVDA), Global Medical REIT Inc. (NYSE: GMRE) is one of the best stocks to buy according to Frank Fu’s CaaS Capital.
The stock is a new arrival on Frank Fu’s portfolio, as his hedge fund bought about 261,102 shares of Global Medical REIT Inc. (NYSE: GMRE), worth $3.42 million. In addition, hedge fund sentiment increased for Global Medical REIT Inc. (NYSE: GMRE) in the first quarter. Insider Monkey’s data shows that 18 elite hedge funds held stakes in the company at the end of the first quarter, up from 8 funds a quarter earlier.
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Disclosure: None. 10 Best Dividend Stocks to Buy According to Frank Fu’s CaaS Capital is originally published on Insider Monkey.