In this article, we discuss 10 dividend stocks to buy according to Lee Munder’s Capital Group.
Lee Munder Capital Group (LMCG) is a Boston-based hedge fund founded by Lee Munder in 2000. Before founding LMCG, Munder established another firm in 1985, where he and his associates came up with the first-ever internet-focused mutual fund: The NetNet mutual fund. The fund was a huge success, returning 175% in 1999 and had more than $11 billion in assets by 2000.
LMCG specializes in a broad range of investment strategies for institutional and private clients. In addition to this, the hedge fund manages equity portfolios across a range of market caps. The fund also focuses on ESG factors that help generate positive returns for shareholders, while conducting meticulous research and covering companies in all regions, sectors, and markets.
At the end of Q1 2022, LMCG’s portfolio was valued at over $1.7 billion. The hedge fund holds investments in several sectors, with technology, healthcare, and services taking up major portions of its portfolio. Moreover, the firm also held substantial investments in dividend stocks, such as The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and Merck & Co., Inc. (NYSE:MRK).
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Our Methodology:
In this article, we discuss 10 dividend stocks to buy according to Lee Munder Capital Group. We took these stocks from LMCG’s Q1 2022 13F portfolio and ranked them according to their yields.
10 Dividend Stocks to Buy According to Lee Munder Capital Group
10. Applied Materials, Inc. (NASDAQ:AMAT)
Dividend Yield as of June 30: 1.13%
Lee Munder Capital Group’s Stake Value: $22,198,000
Applied Materials, Inc. (NASDAQ:AMAT) manufactures semiconductor chips for electronics, smartphones, and solar products. In Q1 2022, the company missed estimates on its earnings but its revenue of $6.25 billion was a 12% year-over-year growth. Moreover, the company also generated over $415 million in cash from operations during the quarter.
Applied Materials, Inc. (NASDAQ:AMAT) has raised its dividend at a CAGR of 20% over the past five years. The company currently pays a quarterly dividend of $0.26 per share. As of June 30, the stock’s dividend yield was recorded at 1.13%. Highlighting the semiconductor downturns and tighter monetary policies around the world, BofA lowered its price target on Applied Materials, Inc. (NASDAQ:AMAT) in June to $118 but kept a ‘Buy’ rating on the shares.
At the end of Q1 2022, Lee Munder Capital Group owned 168,423 shares in Applied Materials, Inc. (NASDAQ:AMAT), with a total value of over $22 million. The stake in AMAT accounted for 1.28% of the hedge fund’s portfolio.
As per Insider Monkey’s Q1 2022 database, 74 hedge funds owned stakes in Applied Materials, Inc. (NASDAQ:AMAT), down from 78 in the previous quarter. The collective value of these stakes is over $4.3 billion. Generation Investment Management owned the largest stake in the company in Q1, worth $561 million.
Just like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and Merck & Co., Inc. (NYSE:MRK), Applied Materials, Inc. (NASDAQ:AMAT) is one of the notable dividend stocks in LMCG’s portfolio.
Vulcan Value Partners mentioned Applied Materials, Inc. (NASDAQ:AMAT) in its Q4 2021 investor letter. Here is what the firm had to say:
“Applied Materials, another material contributor for the quarter, provides materials engineering solutions for semiconductor fabrication equipment and manufacturing tools for advanced displays. Similar to Lam Research, Applied Materials is executing well and continuing to experience the tailwinds from consolidation and growth within the industry.”
9. CVS Health Corporation (NYSE:CVS)
Dividend Yield as of June 30: 2.36%
Lee Munder Capital Group’s Stake Value: $18,359,000
CVS Health Corporation (NYSE:CVS) is an American health solutions company that also specializes in health insurance. In Q1 2022, the company added 674,000 members to its medical membership segment, taking the total to 24.5 million members. Moreover, the company’s revenue for the quarter came in at $76.8 billion, up 11.2% from the same period last year.
Lee Munder Capital Group opened its position in CVS Health Corporation (NYSE:CVS) during Q1 2022, with 181,393 shares. The total value of the stake is over $18.3 million, and represents 1.06% of the hedge fund’s portfolio.
In December 2021, CVS Health Corporation (NYSE:CVS) raised its quarterly dividend by 10%, which was its first dividend raise since 2016. The company’s quarterly payout now stands at $0.55 per share, with a dividend yield of 2.36%, as of June 30. Loop Capital initiated its coverage of CVS Health Corporation (NYSE:CVS) in June, with a ‘Buy’ rating and a $120 price target, acknowledging its strong earnings growth and growing insurance business.
As of the quarter ended in March 2022, 74 hedge funds held positions in CVS Health Corporation (NYSE:CVS), as tracked by Insider Monkey. These funds collectively own stakes worth over $4.3 billion, down from $5.4 billion worth of stakes held by 78 hedge funds in the previous quarter.
ClearBridge Investments mentioned CVS Health Corporation (NYSE:CVS) in its Q4 2021 investor letter. Here is what the firm had to say:
“Improving health remains a key impact theme for the portfolio, and over the past year or so we have increased our exposure to the health care sector, through the addition of CVS Health, which is well-positioned to help define the future of health care in terms of costs, quality and convenience.”
8. Lowe’s Companies, Inc. (NYSE:LOW)
Dividend Yield as of June 30: 2.39%
Lee Munder Capital Group’s Stake Value: $12,710,000
Lowe’s Companies, Inc. (NYSE:LOW) is a North Carolina-based company that specializes in home improvement and also operates a chain of retail stores in the U.S and Canada. Recently, the company announced that it will offer tools for metaverse builders to see planned home improvement projects of the company in the metaverse.
The number of hedge funds tracked by Insider Monkey owning stakes in Lowe’s Companies, Inc. (NYSE:LOW) fell to 65 in Q1, from 72 in the previous quarter. The collective value of these stakes is over $5.5 billion. With stakes worth over $2 billion, Pershing Square was the company’s leading shareholder in Q1.
Lowe’s Companies, Inc. (NYSE:LOW) maintains a 25-year streak of consistent dividend growth and has been paying dividends to shareholders since its IPO in 1961. On May 27, the company declared a quarterly dividend of $1.05 per share, up 31% from its previous dividend. The stock’s dividend yield stood at 2.39% on June 30. MKM Partners initiated its coverage of Lowe’s Companies, Inc. (NYSE:LOW) in June, with a ‘Neutral’ rating and a $190 price target due to the current uncertain market situation.
At the end of Q1 2022, Lee Munder Capital Group owned 62,864 LOW shares, valued at $12.7 million. The stake represented 0.73% of the hedge fund’s portfolio.
Pershing Square Capital Management mentioned Lowe’s Companies, Inc. (NYSE:LOW) in its Q4 2021 investor letter. Here is what the firm had to say:
“Lowe’s is a high-quality business with significant long-term earnings growth potential
Supportive macroeconomic backdrop
-Aging housing stock, lack of new inventory, robust home equity values, and unprecedented pro project backlog
-COVID-19 causing millennials to enter the housing marketPositioned to grow EPS largely independent of market conditions
-Idiosyncratic revenue opportunities driving share gains
-Self-help initiatives catalyzing operating margin expansion
-Buybacks representing ~8% of current market capitalization planned for 2022Multi-year business transformation with substantial earnings upside
-Margin target of 13% has substantial upside; Home Depot at ~15.3% and increasing
-Potential to generate high-teens EPS growth over the next several years.Lowe’s continues to trade at a significantly discounted P/E multiple relative to Home Depot despite materially higher prospective EPS growth. LOW’s share price including dividends increased 63% in 2021 and has decreased 10% year-to-date in 2022.”
7. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of June 30: 2.55%
Lee Munder Capital Group’s Stake Value: $12,462,000
Lee Munder Capital Group initiated its position in Johnson & Johnson (NYSE:JNJ) in Q1 2022, buying 70,315 shares valued at over $12.4 million. The healthcare and pharmaceutical company represented 0.72% of the hedge fund’s 13F portfolio.
Johnson & Johnson (NYSE:JNJ) currently offers a quarterly dividend of $1.13 per share, raising it by 6.6% in April. The Dividend King has raised its dividend for the past 60 years in a row. As of June 30, the stock’s dividend yield came in at 2.55%. In June, Daiwa initiated coverage of Johnson & Johnson (NYSE:JNJ) with a ‘Buy’ rating and a $180 price target, appreciating the company’s overall earnings in Q1.
Of the 900+ elite funds tracked by Insider Monkey, 83 had investments in Johnson & Johnson (NYSE:JNJ) in Q1 2022, the same as in the previous quarter. The collective value of the stakes held by them was over $7.4 billion. Rajiv Jain, Ken Griffin, and Ray Dalio were some of the company’s prominent stakeholders in Q1.
Distillate Capital, an investment firm, discussed Johnson & Johnson (NYSE:JNJ) 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.”
6. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of June 30: 2.57%
Lee Munder Capital Group’s Stake Value: $12,500,000
An American consumer goods corporation, The Procter & Gamble Company (NYSE:PG) posted earnings growth in nearly all of its segments in its fiscal Q3 report. The company’s gross revenue stood at $19.4 billion, up 7.1% from the same period last year.
The Procter & Gamble Company (NYSE:PG) is one of the companies sticking to its dividend policy. The company has paid dividends to shareholders for the past 132 consecutive years while growing its annual payouts for 66 years in a row. The company’s current quarterly dividend stands at $0.9133 per share, with a yield of 2.57% as of June 30.
The Procter & Gamble Company (NYSE:PG) represented 0.72% of Lee Munder Capital Group’s portfolio in Q1, as the hedge fund owned 81,805 shares in the company, worth over $12.5 million. In June, Deutsche Bank lowered its price target on The Procter & Gamble Company (NYSE:PG) to $171 due to a broad analysis of the consumer staples sector. However, the firm kept a ‘Buy rating’ on the shares.
As per Insider Monkey’s Q1 2022 database, The Procter & Gamble Company (NYSE:PG) was a part of 72 hedge funds’ portfolios, compared with 67 a quarter earlier. The combined value of these stakes stood at over $6 billion. GQG Partners was the company’s leading shareholder in Q1.
Just like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and Merck & Co., Inc. (NYSE:MRK), analysts and investors are also bullish on The Procter & Gamble Company (NYSE:PG) due to its strong dividend policy.
5. Comcast Corporation (NASDAQ:CMCSA)
Dividend Yield as of June 30: 2.75%
Lee Munder Capital Group’s Stake Value: $19,196,000
Comcast Corporation (NASDAQ:CMCSA) is a global media and tech company providing high-speed internet and other phone services to its consumers. In April, the company announced a collaboration with Charter to develop a next-generation streaming platform, while the broadband and cable video businesses of both companies will remain independent.
Lee Munder Capital Group sold off its former Comcast Corporation (NASDAQ:CMCSA) stake, worth $214,000 as of September 30 2015, during the fourth quarter of 2015. The hedge fund resumed its position in the company during Q1 2022, purchasing shares worth over $19 million. The company represented 1.11% of the hedge fund’s portfolio.
As per Insider Monkey’s Q1 database, 78 hedge funds owned stakes in Comcast Corporation (NASDAQ:CMCSA), down from 80 in the previous quarter. The collective value of these stakes is over $7 billion. First Eagle Investment Management owned the largest stake in the company in Q1, worth over $1.4 billion.
On May 27, Comcast Corporation (NASDAQ:CMCSA) announced a quarterly dividend of $0.27 per share, in line with its previous quarter. The company has been raising its dividends consecutively for the past 14 years. The stock’s dividend yield came in at 2.75% as of June 30.
ClearBridge Investments mentioned Comcast Corporation (NASDAQ:CMCSA) in its Q4 2021 investor letter. Here is what the firm had 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.”
4. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of June 30: 2.81%
Lee Munder Capital Group’s Stake Value: $17,762,000
An American multinational beverage corporation, The Coca-Cola Company (NYSE:KO) has been the top-performing stock in the Dow Jones Industrial Average, gaining 5.78% in 2022 so far, whereas the Consumer Staples Select Sector SPDR Fund is down 2.99% year-to-date, as of the close of June 30.
In February 2022, The Coca-Cola Company (NYSE:KO) raised its dividend for the 60th consecutive year. The company currently offers a quarterly dividend of $0.44 per share, with a yield of 2.81%, recorded on June 30. In June, Morgan Stanley reiterated its ‘Overweight’ rating on The Coca-Cola Company (NYSE:KO), with a $76 price target, which represents 25% upside. The firm appreciated the company’s strong pricing power and earnings growth.
During Q1 2022, Lee Munder Capital Group purchased 286,473 KO shares, worth over $17.7 million. The company represented 1.02% of the hedge fund’s portfolio.
At the end of Q1 2022, 64 hedge funds tracked by Insider Monkey owned stakes in The Coca-Cola Company (NYSE:KO), down from 70 in the previous quarter. These hedge funds have nearly $30 billion invested in the company.
ClearBridge Investments mentioned The Coca-Cola Company (NYSE:KO) in its Q4 2021 investor letter. Here is what the firm had to say:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
3. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of June 30: 2.98%
Lee Munder Capital Group’s Stake Value: $13,279,000
Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based pharmaceutical company that is famous for its diabetes and asthma-related products and drugs. The company recently launched Merck Digital Sciences Studio, which will support early-stage biomedical startups as they generate technologies for drug development.
Merck & Co., Inc. (NYSE:MRK) holds an 11-year track record of consistent dividend growth. The company’s quarterly dividend stands at $0.69 per share, with a dividend yield of 2.98%, as of June 30. In June, the company was also added to Goldman Sachs’ list of high dividend stocks, with an estimated yield of 3.2% in 2022. As Merck & Co., Inc. (NYSE:MRK) completed its acquisition of Seagen, Cowen raised its price target on the stock in June to $102, with a ‘Market Perform’ rating on the shares.
As of the quarter ended March 2022, Merck & Co., Inc. (NYSE:MRK) was in 84 hedge funds’ portfolios, according to Insider Monkey’s database. The collective value of these stakes was nearly $5.9 billion. Fisher Asset Management was the company’s leading shareholder in Q1, with over 11.8 million shares.
Lee Munder Capital Group opened its position in Merck & Co., Inc. (NYSE:MRK) during Q1 2022, buying 161,848 shares, worth over $13.2 million. The company made up 0.76% of the hedge fund’s portfolio.
ClearBridge Investments mentioned Merck & Co., Inc. (NYSE:MRK) in its Q4 2021 investor letter. Here is what the firm had to say:
“Other pharma companies are providing solutions as well. Merck’s antiviral pill molnupiravir is less effective than Pfizer’s, but it will be a helpful alternative for patients who cannot take Pfizer’s due to drug-drug interactions. Merck is also helping to manufacture Johnson & Johnson’s COVID-19 vaccine, which has less stringent storage requirements than the mRNA vaccines do.”
2. Newmont Corporation (NYSE:NEM)
Dividend Yield as of June 30: 3.55%
Lee Munder Capital Group’s Stake Value: $19,380,000
Newmont Corporation (NYSE:NEM) is a Colorado-based gold mining company that has the largest gold reserve in the industry. In its Q1 2022 earnings, the company missed estimates on several counts, posting EPS and revenue of $0.69 and $3.02 billion, respectively. The company produced 1.34 million ounces of gold and 350,000 gold equivalent ounces from co-products during the quarter.
Lee Munder Capital Group started its position in Newmont Corporation (NYSE:NEM) during Q1 2022, buying shares worth over $19.38 million. The company represented 1.12% of the hedge fund’s portfolio. Canaccord expressed disappointment in the company’s Q1 results in April and called it one of its weakest quarters. The firm lowered its price target on Newmont Corporation (NYSE:NEM) to $80, with a ‘Hold’ rating on the shares.
In 2021, Newmont Corporation (NYSE:NEM) generated over $2.6 billion in free cash flow and spent nearly $2 billion on dividends. The company currently pays a quarterly dividend of $0.55 per share. The stock’s dividend yield was recorded at 3.55% on June 30.
At the end of Q1 2022, 53 hedge funds in Insider Monkey’s database owned stakes in Newmont Corporation (NYSE:NEM), up from 45 in the previous quarter. The collective value of these stakes is over $3.52 billion, compared to just $1.4 billion worth of stakes held by hedge funds in Q4 2021.
First Eagle Investment Management mentioned Newmont Corporation (NYSE:NEM) in its Q3 2021 investor letter. Here is what the firm had to say:
“The largest gold miner in the world, Newmont shares lost ground in what was a volatile and ultimately down quarter for the price of gold. The Colorado-based company has continued to execute well in what has been a challenging environment. The company recently reaffirmed its full-year 2021 production guidance, but indicated that it was likely to come in at the mid to low point of the range provided as a result of disruptions from Covid-19 as well as severe weather events. It also noted that inflation pressures were likely to push its costs higher in 2021. None of this changes our opinion of the stock, which has historically offered steady production anchored in good jurisdictions, a good pipeline of organic projects, a strong balance sheet and proven management.”
1. Chevron Corporation (NYSE:CVX)
Dividend Yield as of June 30: 3.86%
Lee Munder Capital Group’s Stake Value: $20,238,000
Chevron Corporation (NYSE:CVX) is a California-based energy company that manufactures high-quality refined products, including gasoline, diesel, and other fuels. During Q1 2022, Lee Munder Capital Group bought 124,288 CVX shares, valued at over $20.2 million. The company represented 1.17% of the hedge fund’s portfolio.
According to Insider Monkey’s database, 53 hedge funds were bullish on Chevron Corporation (NYSE:CVX) in Q1, the same as in the previous quarter. Those stakes held a collective value of roughly $28 billion. Warren Buffett’s Berkshire Hathaway was the company’s leading shareholder in Q1, owning stakes worth nearly $26 billion.
Chevron Corporation (NYSE:CVX) holds a 35-year track record of consistent dividend growth. The company has raised its dividend at a CAGR of 5.07% over the past five years. Its quarterly dividend stands at $1.42 per share, with a yield of 3.86%, as of June 30. In June, Credit Suisse raised its price target on Chevron Corporation (NYSE:CVX) to $202, with an ‘Outperform’ rating on the shares, highlighting the company’s disciplined strategy.
ClearBridge Investments mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm had to say:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
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Disclosure. None. 10 Dividend Stocks to Buy According to Lee Munder Capital Group is originally published on Insider Monkey.
