In this article, we discuss 10 dividend stocks to buy according to Bryan Hinmon’s Motley Fool Asset Management.
Motley Fool Asset Management (MFAM) is a research-driven asset management firm, founded in 2009 by a financial services company, The Motley Fool. The hedge fund focuses on business economics and the long-term growth of the companies it invests in. Moreover, the fund carries exhaustive examinations of potential investment candidates. Since 2017, Bryan Hinmon is serving as the Chief Investment Officer of the firm and is in charge of leading the investment team and managing client assets.
At the end of 2021, MFAM announced the rebranding of its business, converting its mutual funds into exchange-traded funds (ETFs). The management asserted that ETFs are more profitable and shareholder-friendly in the current environment, as compared to mutual funds. On December 31, the hedge fund launched two new ETFs that track the performance of stocks belonging to small- and mid-cap US companies in The Motley Fool recommendation universe. The firm’s ETFs are traded on the secondary market and can be bought through professional brokerage accounts. Hinmon’s investment strategies helped his hedge fund to achieve profitable returns for the shareholders. The Motley Fool 100 ETF, which tracks the 100 largest domestic companies, gained 14.28% in 2021 and returned 24.59% on average in the past three years. Moreover, its Global Opportunities ETF returned 14.02% in the past three years.
As of the end of Q1 2022, MFAM holds a 13F portfolio value of $1.36 billion, down from $1.56 billion in the previous quarter. The hedge fund’s major investments were in the tech and services sectors, with Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG) taking up the first three spots in the portfolio.
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Our Methodology:
In this article, we discuss 10 dividend stocks to buy in Bryan Hinmon’s portfolio. We compiled this list by using data from Motley Fool Asset Management’s 13F portfolio as of Q1 2022.
10 Dividend Stocks to Buy According to Bryan Hinmon’s Motley Fool Asset Management
10. The Home Depot, Inc. (NYSE:HD)
Motley Fool Asset Management’s Stake Value: $8,444,000
Dividend Yield as of June 17: 2.77%
Number of Hedge Fund Holders: 75
The Home Depot, Inc. (NYSE:HD) is the largest home improvement retailer in the US that provides renovation-related products and services to its consumers. On June 13, it was added to BofA’s list of 10 stocks that should benefit from the transforming world, as the renovation activity is increasing in the US after the pandemic.
In Q1 2022, The Home Depot, Inc. posted an EPS of $4.09, beating estimates by $0.39. The company’s comparable sales for the quarter also increased by 2.2% from the same period last year. Following the company’s solid quarterly earnings, Citigroup raised its price target on The Home Depot, Inc. in May to $348, with a Buy rating on the shares. In addition to HD, analysts are also hopeful about major tech stocks, such as Amazon.com, Inc., Apple Inc., and Alphabet Inc., despite their negative returns in 2022.
Motley Fool has been investing in The Home Depot, Inc. since 2018, starting its position with shares worth over $1.8 million. At the end of Q1 2022, the hedge fund owned 28,209 HD shares, valued at over $8.4 million. The firm increased its stake in the company by 5% during the quarter, which represented 0.61% of Bryan Hinmon’s portfolio.
On May 19, The Home Depot, Inc. declared a quarterly dividend of $1.90 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past 14 years. As of June 17, the stock’s dividend yield was 2.77%.
At the end of Q1 2022, 75 hedge funds presented a bullish stance on The Home Depot, Inc., up from 68 in the previous quarter. These stakes hold a consolidated value of nearly $5.6 billion. Among these hedge funds, Fisher Asset Management held the largest stake in the company in Q1, valued at over $2.4 billion.
Ensemble Capital mentioned The Home Depot, Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“Home Depot (7.7% weight in the Fund): The demand surge for remodeling and home improvement goods sparked by shelter in place orders, remote work going mainstream, and a shortage of homes on the market to buy, ran headlong into the supply chain crisis, triggering surging prices in the products Home Depot sells. But the company has been able to pass nearly all of these increased costs on to customers, with revenue growing 37% over the past two years while gross profits, or the profits the company makes on each item they sell, increased by 35%. Even this small difference appears to be due not to inflation eating away at Home Depot’s profits, but rather be a function of the huge increase in revenue the company has been generating in low margin lumber sales.”
9. Comcast Corporation (NASDAQ:CMCSA)
Motley Fool Asset Management’s Stake Value: $10,312,000
Dividend Yield as of June 17: 2.79%
Number of Hedge Fund Holders: 78
Comcast Corporation (NASDAQ:CMCSA) is a global media and technology company that provides high-speed internet and phone services to its consumers. In the first quarter of 2022, the company saw an 8% year-over-year growth in its broadband revenue to $6.05 billion, as the number of residential broadband customers grew during the quarter.
On May 10, Comcast Corporation announced a quarterly dividend of $0.27 per share. The company holds a 14-year streak of dividend growth. Moreover, the company paid $1.2 billion in dividend payments during the quarter. On June 17, the stock’s dividend yield was recorded at 2.79%. In June, Benchmark lowered its price target on Comcast Corporation to $60 due to the unstable market conditions but kept a Buy rating on the shares.
Motley Fool resumed its position in Comcast Corporation during the third quarter of 2021, after selling off its entire CMCSA shares a quarter earlier. At the end of Q1 2022, the hedge fund owned 220,250 shares in the company, valued at over $10.3 million. The company made up 0.75% of Bryan Hinmon’s portfolio.
According to Insider Monkey’s Q1 2022 data, 78 hedge funds reported owning stakes in Comcast Corporation, declining from 80 in the previous quarter. The collective value of these stakes is over $7.12 billion.
ClearBridge Investments mentioned Comcast Corporation in its Q4 2021 investor letter. Here is what the firm has to say:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Comcast was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
8. Johnson & Johnson (NYSE:JNJ)
Motley Fool Asset Management’s Stake Value: $12,324,000
Dividend Yield as of June 17: 2.67%
Number of Hedge Fund Holders: 83
Johnson & Johnson is one of the top Big Pharma companies, specializing in pharmaceuticals, consumer products, and medical devices. In Q1 2022, the company reported a 6.3% year-over-year growth in its pharmaceutical sales to $12.8 billion, while its consumer health revenue stood at $3.58 billion.
In May, SVB Leerink initiated its coverage of Johnson & Johnson with an Outperform rating and a $200 price target. The firm appreciated the company’s consistent earnings growth and expects its medical device sales to grow in the upcoming years. On April 19, Johnson & Johnson declared a quarterly dividend of $1.13 per share, up from $1.06 per share previously. This was the company’s 60th consecutive year of dividend growth. The stock’s dividend yield was recorded at 2.67% on June 17.
In Q1 2022, Arrowstreet Capital owned over 6.6 million shares in Johnson & Johnson, valued at $1.17 billion, becoming the company’s largest stakeholder. In addition to this, 83 elite funds tracked by Insider Monkey were bullish on the company in Q1, the same as in the previous quarter. These stakes hold a consolidated value of over $7.4 billion.
During Q1 2022, Motley Fool piled up another $664,000 in Johnson & Johnson, taking its total stake to $12.3 million. The company accounted for 0.9% of Bryan Hinmon’s portfolio.
Distillate Capital, an investment firm, discussed Johnson & Johnson in its Q2 2021 investor letter. Here is what the fund said:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
7. American Tower Corporation (NYSE:AMT)
Motley Fool Asset Management’s Stake Value: $13,445,000
Dividend Yield as of June 17: 2.42%
Number of Hedge Fund Holders: 50
American Tower Corporation (NYSE:AMT) is a Boston-based real estate investment trust that specializes in broadcast communications infrastructure around the globe. At the end of Q1 2022, Motley Fool owned $13.4 million worth of stakes in the company, which accounted for 0.98% of Bryan Hinmon’s portfolio. The hedge fund trimmed its position in the company by 6% during the quarter.
In Q1 2022, American Tower Corporation delivered solid quarterly earnings, posting an FFO of $2.55, which exceeded analysts’ expectations by $0.07. The company’s gross revenue amounted to $2.66 billion, up 23.1% from the same period last year and beating consensus by $50 million. Moreover, its property revenue also grew by 7.7% to $703 million.
In June, BofA mentioned American Tower Corporation in its investors’ note, appreciating the company’s investment in its data center business. The firm expects AMT shares to gain in the coming months and resumed its coverage on the stock with a Buy rating and a $315 price target. On May 19, American Tower Corporation announced a 2% hike in its quarterly dividend to $1.43 per share. The stock’s dividend yield was recorded at 2.42% on June 17.
As per Insider Monkey’s database, 50 hedge funds owned stakes in American Tower Corporation in Q1, down from 53 in the previous quarter. These stakes hold a combined value of over $4.1 billion. Akre Capital Management held the largest position in the company in Q1, with stakes valued at over $1.75 billion.
6. Brown & Brown, Inc. (NYSE:BRO)
Motley Fool Asset Management’s Stake Value: $13,759,000
Dividend Yield as of June 17: 0.77%
Number of Hedge Fund Holders: 24
Brown & Brown, Inc. is an independent insurance brokerage that provides risk management solutions to its consumers. The company also offers customized insurance plans to general businesses and individual customers. In Q1 2022, the company reported strong results, posting an EPS of $0.78 and revenue of $904.7 million, which beat estimates by $0.03 and $11.99 million, respectively.
In April, Truist appreciated Brown & Brown, Inc. for sustaining its Property & Casualty insurance and commissions. The firm lifted its price target on the stock to $82, with a Buy rating on the shares. In 2022, Brown & Brown, Inc. was added to S&P 500 Dividend Aristocrats for raising its dividends for the past 28 years consecutively. The company offers a quarterly payout of $0.1025 per share, with a dividend yield of 0.77%, as of June 17.
Motley Fool started buying shares of Brown & Brown, Inc. during the third quarter of 2020. At the end of Q1 2022, the hedge fund held 190,380 BRO shares, valued at over $13.7 million. The company constituted 1% of Bryan Hinmon’s portfolio. Like BRO, Amazon.com, Inc., Apple Inc., and Alphabet Inc. are also prominent holdings of the hedge fund in Q1.
According to Insider Monkey’s database, 24 hedge funds reported owning stakes in Brown & Brown, Inc., compared with 25 a quarter earlier. These stakes hold a consolidated value of over $1.46 billion. Among these funds, Select Equity Group owned the largest position in the Florida-based company, with stakes valued at $1.33 billion.
5. Equinix, Inc. (NASDAQ:EQIX)
Motley Fool Asset Management’s Stake Value: $15,576,000
Dividend Yield as of June 17: 1.96%
Number of Hedge Fund Holders: 40
Equinix, Inc. (NASDAQ:EQIX) is an American real estate investment trust that specializes in internet connection and data centers. In May, the company announced the expansion of its operations in Latin America with the acquisition of four data centers in Chile and one additional data center in Peru. The enterprise value for these five data centers is over $735 million.
On April 27, Equinix, Inc. announced a quarterly dividend of $3.10 per share, with a dividend yield of 1.96%, recorded on June 17. The company raised its quarterly dividend in February this year by 8%. BMO Capital mentioned Equinix, Inc. in its May investors’ note, raising concerns about the company’s pricing power and the competitive environment. The firm lowered its price target on the stock to $770, with a Market Perform rating on the shares.
At the end of Q1 2022, Motley Fool owned 21,003 shares in Equinix, Inc., valued at nearly $15.6 million. The company represented 1.14% of Bryan Hinmon’s portfolio.
At the end of March 2022, 40 hedge funds in Insider Monkey’s database owned stakes in Equinix, Inc., down from 45 in the previous quarter. The collective value of these stakes is over $1.2 billion.
4. Costco Wholesale Corporation (NASDAQ:COST)
Motley Fool Asset Management’s Stake Value: $19,278,000
Dividend Yield as of June 17: 0.81%
Number of Hedge Fund Holders: 61
Costco Wholesale Corporation (NASDAQ:COST) is a Washington-based wholesale retailer that sells discounted goods through membership warehouses and also operates online. In May, the company reported a 15.5% year-over-year increase in its comparable-store sales due to the growth in its core domestic markets. Moreover, the company’s net sales for the month stood at $18.23 billion.
For the quarter ending March 2022, 61 hedge funds invested in Costco Wholesale Corporation, up from 57 in the previous quarter. The collective value of these stakes is over $5.4 billion. Fisher Asset Management owned the largest stake in the company in Q1, worth over $2.4 billion.
During Q1 2022, Motley Fool reduced its stake in Costco Wholesale Corporation by 3%, owning shares worth over $19.2 million. The company accounted for 1.41% of Bryan Hinmon’s portfolio. On April 13, Costco Wholesale Corporation announced a 13.9% increase in its quarterly dividend to $0.90 per share. This was the company’s 18th year of consistent dividend growth. The stock’s yield was recorded at 0.81% on June 17.
In June, Costco Wholesale Corporation surveyed over 900 warehouse club members about renewal intentions and shopping behaviors, and the positive results of the survey showed growth in the company’s success post-pandemic. In view of this, Jefferies raised its price target on the stock to $580 in June while keeping a Buy rating on the shares.
ClearBridge Investments mentioned Costco Wholesale Corporation in its Q4 2021 investor letter. Here is what the firm has to say:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”
3. Medtronic plc (NYSE:MDT)
Motley Fool Asset Management’s Stake Value: $21,349,000
Dividend Yield as of June 17: 3.08%
Number of Hedge Fund Holders: 54
Medtronic plc (NYSE:MDT) is an Ireland-based medical device company that is known widely for its therapies and cardiac devices. In fiscal Q4 2022, the company missed estimates on various accounts but expects its organic revenue growth in the range of 4% to 5% in FY23. In 2022, the company saw a 5% year-over-year growth in its organic revenue.
In May 2022, Medtronic plc (NYSE:MDT) announced an 8% hike in its quarterly dividend, which marked the company’s 45th consecutive year of dividend growth. The company’s quarterly payout stands at $0.68 per share, with a dividend yield of 3.08%, as of June 17. In May, Raymond James noted the negative impact of supply chain issues on Medtronic plc (NYSE:MDT)’s revenue and lowered its price target on the stock to $109, but kept an Outperform rating on the shares.
According to Insider Monkey’s Q1 2022 database, 54 hedge funds owned stakes in Medtronic plc (NYSE:MDT), falling from 55 in the previous quarter. The combined value of these stakes is roughly $2 billion.
Motley Fool renewed its position in Medtronic plc (NYSE:MDT) during the second quarter of 2021, after dumping off its entire stake in the company twice since 2015. At the end of Q1 2022, the hedge fund owned 192,422 MDT shares, valued at over $21.3 million. The company made up 1.56% of Bryan Hinmon’s portfolio.
Polen Capital mentioned Medtronic plc (NYSE:MDT) in its Q1 2022 investor letter. Here is what the firm has to say:
“Ireland-based Medtronic is a leading health care company focused on supplying many important life-saving devices like pacemakers, defibrillators, and insulin pumps. This is another company with attractive pricing power and a business model that can hold up well during inflationary periods. Medtronic has increased market share across almost 70% of its portfolio since the start of the pandemic, which is a higher percentage than even before the pandemic. With growth-oriented companies falling out of favor over the quarter, the stock’s relatively discounted valuation (at approximately 19x earnings) also bolstered its performance.”
2. Fastenal Company (NASDAQ:FAST)
Motley Fool Asset Management’s Stake Value: $24,748,000
Dividend Yield as of June 17: 2.56%
Number of Hedge Fund Holders: 29
Fastenal Company (NASDAQ:FAST) is an American company that provides supply chain management solutions to its consumers. The company saw a 23.5% year-over-year sales growth in May at $589.2 million, supported by solid growth in the North American region. In addition to this, the company’s Q1 revenue came in at $1.7 billion, up 20.3% from the same period last year.
Fastenal Company has a long history of dividend payments. The company started paying annual dividends in 1991 and expanded to quarterly dividends in 2011. Moreover, it also paid special dividends to shareholders in 2008, 2012, and 2020. Currently, the company offers a quarterly payout of $0.31 per share, with a yield of 2.56%, recorded on June 17. At the end of Q1 2022, Motley Fool’s investment in Fastenal Company amounted to $24.7 million. The hedge fund brought its position down in the company by 6% during the quarter. The company made up 1.81% of Bryan Hinmon’s portfolio.
The number of hedge funds tracked by Insider Monkey owning stakes in Fastenal Company stood at 29, the same as in the previous quarter. The collective value of these stakes is over $1.04 billion, up from $941 million worth of stakes held by hedge funds in Q4 2021. Jack Woodruff, Cliff Asness, and Ken Griffin were some of the company’s major stakeholders in Q1.
Nomadic Value Partners mentioned Fastenal Company in its Q2 2021 investor letter. Here is what the firm has to say:
“In mid-June we completely sold out of Fastenal (FAST). Although we had been using FAST as a source of liquidity for a few months already, it still feels bad to say an official goodbye to such an amazing company. However, we must stay focused on the math and the math concludes a difficult task to get our return hurdle going forward. The last time FAST traded at a forward P/E ratio of 34x (the multiple at our exit), the year was 2012. The company had been growing at 20% per year, and the US was about to embark on a shale oil boom, sustaining a low-teens growth trajectory. Today, FAST’s sales growth could turn anemic as the surge for COVID safety products is waning and heavy construction and resources customers are slow to return. An investor must have an optimistic view towards 5+ years of strong real GDP growth as well as sustained inflation. If one lowers the growth assumption to a more likely outcome, then the implicit bet is that low to negative real interest rates will persist and the forward P/E multiple will stay elevated4. I do not want to make such a strong macro bet as the justification for owning a stock. Fastenal is a cyclical business with a growth model proven to take market share secularly, but the time to buy FAST (the stock) will be when we are in the depths of an industrial recession. Stay tuned.”
1. Watsco, Inc. (NYSE:WSO)
Motley Fool Asset Management’s Stake Value: $51,271,000
Dividend Yield as of June 17: 3.87%
Number of Hedge Fund Holders: 22
Watsco, Inc. (NYSE:WSO) is a Miami-based largest distributor of air conditioning, heating, and refrigeration equipment. In Q1 2022, the company posted a 25% year-over-year growth in its same-store sales, while its gross revenue came in at $1.52 billion, which beat estimates by $130 million.
In April 2022, Watsco, Inc. announced a 13% hike in its quarterly dividend to $2.20 per share. The company has been paying uninterrupted dividends to shareholders for the past 48 years. The stock’s dividend yield came in at 3.87% on June 17. Recognizing the company’s internal parts initiatives and higher efficiency sales, Baird raised its price target on Watsco, Inc. to $350 in April, while maintaining a Neutral rating on the shares.
At the end of Q1 2022, Watsco, Inc. was the fifth-largest holding of Motley Fool, as the hedge fund owned stakes worth over $51.2 million in the company. It accounted for 3.75% of Bryan Hinmon’s portfolio.
At the end of March 2022, Watsco, Inc. saw a reduction in the hedge fund positions, as 22 elite funds tracked by Insider Monkey owned stakes in the company, down from 31 in the previous quarter. The consolidated value of these stakes is over $334.3 million. Renaissance Technologies was one of the company’s most prominent shareholders in Q1.
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This article is originally published at Insider Monkey.
