In this article, we will discuss 10 dividend stocks to buy now according to Kerr Neilson’s hedge fund.
Kerr Neilson, also known as “Australia’s Warren Buffett”, is a billionaire investment manager and founder of Platinum Asset Management. He attended the University of Cape Town, where he majored in commerce and graduated in 1973. In 1983, he moved to Australia where he worked as an investment manager at Banker’s Trust of Australia. Mr. Neilson was ranked 34 on the 2019 Forbes list “Australia’s 50 Richest”, and as of this April, his real-time net worth is valued at $1.1 billion.
As of December 31, 2021, Kerr Neilson manages more than $3.5 billion in 13F securities through Platinum Asset Management. The fund boasts a diverse portfolio having investments across technology, materials, healthcare, financials, consumer staples, and many other sectors. The fund’s most notable stock picks include Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG). However, in this piece, we will be discussing 10 dividend stocks to buy now according to Kerr Neilson’s hedge fund.
Dividend Stocks For Value Investing
Dividend stocks are a key element of every value investor’s hedge fund portfolio. In addition to being a lucrative opportunity for developing a passive income stream, dividend stocks help mitigate risk by diversifying investments across a range of sectors. According to a study by Hartford Funds, companies that have been consistent with dividend hikes have flourished in the past. Stocks of companies that offered dividends returned 10.68% on average from 1978 to 2021. On the other hand, companies that slashed dividends returned an average of -0.46% over the same period.
Our Methodology
We picked the 10 dividend stocks to buy now according to Kerr Neilson after a careful assessment of Platinum Asset Management’s fourth-quarter 2021 investment portfolio. We narrowed down our selection to stocks that offered a forward dividend yield of at least 2.0%, and then chose stocks that had the highest dividend yields. For each stock, we mentioned relevant news, its forward yield, and its dividend history.
Dividend Stocks to Buy Now According to Kerr Neilson’s Hedge Fund
10. Magellan Midstream Partners, L.P. (NYSE:MMP)
Stake Value of Platinum Asset Management: $78,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0%
Divided Yield as of April 12: 8.53%
Number of Hedge Fund Holders: 13
Magellan Midstream Partners, L.P. (NYSE:MMP) operates as an oil and gas company in the United States. This February, the company released its earnings report for the fiscal fourth quarter of 2021 in which it beat EPS and revenue estimates. The company reported earnings per share of $1.24 and beat estimates by $0.16. Moreover, it generated revenues of $809.30 million, up 38.03% year over year, and outperformed market consensus by $153.64 million.
On March 30, 2022, Mizuho analyst Gabriel Moreen raised his price target on Magellan Midstream Partners, L.P. to $52 from $50 and reiterated a Neutral rating on the shares following the company’s latest analyst day. The analyst commented that he sees an upside to the stock, as the demand for refined products grows in 2022. As of April 12, 2022, the stock has gained 5% over the past six months and has a forward dividend yield of 8.53%.
By the end of the fourth quarter of 2021, 13 hedge funds held stakes in Magellan Midstream Partners, L.P.. The total value of these stakes was more than $87.3 million. This is compared to 12 positions in the prior quarter with stakes worth $92.09 million.
9. Petrobras (NYSE:PBR)
Stake Value of Platinum Asset Management: $86,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0%
Divided Yield as of April 12: 20.96%
Number of Hedge Fund Holders: 26
Petrobras (NYSE:PBR) explores for, produces, and sells oil and gas in Brazil and internationally. This April Petrobras announced that investors of record on April 18, 2022, will be given a dividend of $1.21 per share of common stock, up from the previous dividend of $0.38 per share, on May 23, 2022.
On February 24, 2022, Petrobras announced that its quarterly revenues for Q4 2021 came to $26.22 billion, outperforming market consensus by $863.61 million. The company reported earnings per share of $0.71 and beat expert estimates by $0.06.
Petrobras was spotted on 23 hedge fund portfolios at the close of the fourth quarter of 2021. The value of these funds’ stakes amounted to $3.76 billion, up from $3.0 billion in the preceding quarter with 23 positions. The hedge fund sentiment for Petrobras is positive.
Like Microsoft Corporation, Meta Platforms, Inc., and Alphabet Inc., Platinum Asset Management is bullish on Petrobras and holds a significant stake in the company.
8. Campbell Soup Company (NYSE:CPB)
Stake Value of Platinum Asset Management: $89,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0%
Divided Yield as of April 12: 3.23%
Number of Hedge Fund Holders: 34
Campbell Soup Company (NYSE:CPB) manufactures and markets food and beverage products in the United States and internationally. The company operates through two segments: Meals & Beverages and Snacks. This March, Campbell Soup Company declared a quarterly cash dividend of $0.37 per share, payable on May 2, 2022, to shareholders of record on April 7, 2022.
On March 9, 2022, Campbell Soup Company announced earnings for the fiscal second quarter of 2022. The company reported earnings per share of $0.69, beating estimates by $0.01, and generated quarterly revenues of $2.21 billion. Shortly after, Citi analyst Wendy Nicholson raised her price target on Campbell Soup Company to $46 from $45 and maintained a Neutral rating on the shares in light of the company’s second-quarter 2022 earnings.
As of April 12, 2022, Campbell Soup Company has gained 10.12% over the past six months, has a forward yield of 3.23%, and boasts an annual dividend payout ratio of 54.81%
The analyst and investor sentiment around Campbell Soup Company is positive. Insider Monkey was able to identify 34 hedge funds that were bullish on Campbell Soup Company at the end of the fourth quarter of 2021. The total stakes of these funds were valued at $461.39 million, up from $443.26 million in the prior quarter with 29 positions.
7. Amgen, Inc. (NASDAQ:AMGN)
Stake Value of Platinum Asset Management: $91,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0%
Divided Yield as of April 12: 4.59%
Number of Hedge Fund Holders: 52
Amgen Inc. (NASDAQ:AMGN) develops, manufactures, and markets human therapeutics worldwide. The company focuses on the following areas: inflammation, oncology, bone health, cardiovascular disease, nephrology, and neuroscience. By the end of the fourth quarter of 2021, 52 hedge funds were long Amgen Inc. having stakes of more than $1.82 billion. This is compared to 52 positions in the previous quarter with stakes worth $1.44 billion.
This February, Amgen Inc. announced that its revenues for the fiscal fourth quarter of 2021 came to $6.85 billion, up 3.20% year over year from $6.63 billion. The company posted earnings per share of $4.36 for the quarter and beat EPS estimates by $0.35. On April 12, Barclays analyst Carter Gould raised his price target on Amgen Inc. to $236 from $233 and kept an Equal Weight rating on the shares.
As of April 12, 2022, Amgen Inc.’s (NASDAQ:AMGN) trailing six-month returns are up by 22.80% and the company is worth over $133 billion on the open market. Moreover, the company has been consistent with growing its dividend for over 10 years, and the stock has a forward yield of 4.59% along with a 5-year dividend growth rate of 11.71%.
ClearBridge Investments mentioned Amgen Inc. in its third-quarter 2021 investor letter. Here is what experts at ClearBridge have to say about the stock:
” 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.”
6. AT&T Inc. (NYSE:T)
Stake Value of Platinum Asset Management: $143,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0%
Divided Yield as of April 12: 5.65%
Number of Hedge Fund Holders: 70
AT&T Inc. operates as an American telecommunications company and the largest provider of mobile telephone services in America. On April 11, 2022, JPMorgan analyst Philip Cusick upgraded AT&T Inc. to Overweight from Neutral with a price target of $22, down from $34.
This January, AT&T Inc. released its earnings report for the fiscal fourth quarter of 2021 in which it beat both EPS and revenue estimates. According to the company’s report, AT&T Inc. generated revenues of over $40.96 billion for the quarter and beat estimates by $503.60 million. Moreover, the company reported earnings per share of $0.78, and beat EPS estimates by $0.02.
AT&T Inc. is attracting bullish views from investors. According to Insider Monkey’s database, 70 hedge funds held long positions in AT&T Inc. at the close of the fourth quarter of 2021. The total stakes of these funds amounted to $4.92 billion, up from $3.21 billion in Q3 2021 with 66 positions. Platinum Asset Management’s stakes in the telecommunications giant were valued at $143,000 at the close of Q4 2021.
AT&T Inc. is one of the most notable holdings of Platinum Asset Management as of December 31, 2022. Other top stock picks of the fund include Microsoft Corporation, Meta Platforms, Inc., and Alphabet Inc..
Weitz Investment Management recently published its fourth-quarter 2021 investor letter in which it mentioned AT&T Inc.. Here is what the firm had to say:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T Inc. to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
5. International Business Machines Corporation (NYSE:IBM)
Stake Value of Platinum Asset Management: $191,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0%
Divided Yield as of April 12: 5.19%
Number of Hedge Fund Holders: 44
This February, International Business Machines Corporation (NYSE:IBM) announced that its board of directors declared a quarterly cash dividend of $1.64 per share payable on March 10, 2022, to investors of record on February 11, 2022. The company has been consistent with its quarterly dividends since 1916. As of April 12, 2022, International Business Machines Corporation has a forward yield of 5.19%, boats a 5-year dividend growth rate of 3.70%, and has gained 0.54% over the past twelve months.
This March, International Business Machines Corporation announced a strategic collaboration with Discover Financial Services (NYSE:DFS) to help the digital financial services company move its operations to a hybrid cloud architecture.
This January, International Business Machines Corporation announced that its revenues for the fiscal fourth quarter of 2021 came to $16.70 billion, outperforming market consensus by $730.50 million. Moreover, the company reported earnings per share of $3.35, beating estimates by $0.06. On January 26, 2022, BMO Capital analyst Keith Bachman raised his price target on International Business Machines Corporation to $155 from $153 and maintained a Market Perform rating on the shares in light of the company’s performance for Q4 2021.
Insider Monkey’s data shows that 44 hedge funds held long positions in International Business Machines Corporation at the end of the fourth quarter of 2021. The funds’ collective stakes in the company were a whopping $1.29 billion. The analyst and investor sentiment for the stock is positive.
St. James Investment Company, an investment management firm, published its fourth-quarter 2021 investor letter in which it mentioned International Business Machines Corporation. Here is what the firm had to say:
“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of
time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)
4. Lumen Technologies, Inc. (NYSE:LUMN)
Stake Value of Platinum Asset Management: $764,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.02%
Divided Yield as of April 12: 8.77%
Number of Hedge Fund Holders: 39
Lumen Technologies, Inc (NYSE:LUMN) is an American telecommunications and technology company offering solutions for communications, network services, security, cloud computing, voice, and managed services. On February 9, 2022, Lumen Technologies, Inc released its earnings report for the fiscal fourth quarter of 2021. The company reported earnings per share of $0.51 and reported quarterly revenues of $4.85 billion.
This February, Lumen Technologies, Inc. declared a quarterly cash dividend of $0.25 per share, which was payable on March 18, 2022, to shareholders of record on March 8, 2022. As of April 12, 2022, the stock has a forward yield of 8.77%.
Lumen Technologies, Inc is rising in popularity among elite hedge funds. At the close of Q4 2021, 39 hedge funds were identified as having stakes in the tech company worth $1.07 billion, up from $941.3 million in the preceding quarter with 25 positions.
Longleaf Partners Fund mentioned Lumen Technologies, Inc in its fourth-quarter 2021 investor letter. Here is what the firm had to say:
“In a year that saw various times when the stock market acted like the pre-COVID, during-COVID and post-COVID “environments” (not necessarily in that order), the good news was that our two largest holdings – which we feel can thrive in all three of these environments – Lumen and EXOR, were among our top contributors for the year. We believe that both remain underappreciated by the market and offer significant upside from today’s discounted prices.
Lumen (40%, 3.06%; 3%, 0.31%), the global fiber company, was the top contributor for the year. CEO Jeff Storey took two actions this year to substantially increase the business’s value and address the stock’s enormous discount (it trades below 35% of our appraisal value). First, during the third quarter, Lumen sold its Latin American fiber for a good price [9x earnings before interest, taxes and depreciation (EBITDA)] and the weaker half of its US consumer business for an encouraging 5.5x EBITDA. Both multiples came in above our appraisals and demonstrate how cheap the consolidated Lumen RemainCo is today at less than 6x P/FCF and EV/EBITDA. The majority of Lumen’s remaining EBITDA comes from its US Enterprise and Small and Medium Business (SMB) segments, which grow faster than Lumen’s disposed LatAm fiber and are worth higher multiples. The weakest segment of the new Lumen, the western half of Consumer, is superior to the assets the company just sold for 5.5x EBITDA. Second, Storey quickly repurchased 7% of Lumen’s shares, adding meaningfully to value per share and free cash flow per share. When the dispositions close, proceeds will reduce debt meaningfully, putting net debt right at the company’s leverage ratio target even though that target was based on the prior, inferior business mix. We are pleased that our engagement since filing an amended 13D helped the company begin to deliver positive corporate actions. The market has fixated on the potential for another dividend cut, but Lumen’s FCF is more than sufficient to cover the $1/share payout while investing aggressively into high-return, edge-out capex to grow revenues.”
3. Intel Corporation (NASDAQ:INTC)
Stake Value of Platinum Asset Management: $811,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.02%
Divided Yield as of April 12: 3.14%
Number of Hedge Fund Holders: 72
On January 26, 2022, Intel Corporation (NASDAQ:INTC) declared a quarterly cash dividend of $0.365 per share of common stock, up 5% from its prior dividend of $0.347. The dividend was payable on March 1 to shareholders of record on February 7.
Intel Corporation has been consistent with dividend hikes for over 19 years. As of April 12, 2022, the stock has a forward yield of 3.14% and boasts a 5-year dividend growth rate of 6.24%. By the end of the fourth quarter of 2021, 72 hedge funds held stakes in Intel Corporation. The total value of these stakes was more than $5.50 billion.
This January, Intel Corporation announced its fiscal fourth-quarter results for 2021. According to the company’s earnings report, Intel Corporation generated revenues of $19.53 billion, outperforming market consensus by $1.21 billion. Moreover, the company reported earnings per share of $1.13, beating expert estimates by $0.34.
2. Cisco Systems, Inc. (NASDAQ:CSCO)
Stake Value of Platinum Asset Management: $2,262,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.06%
Divided Yield as of April 12: 2.87%
Number of Hedge Fund Holders: 57
On February 16, 2022, Cisco Systems, Inc. (NASDAQ:CSCO) announced a quarterly cash dividend of $0.38 per share, up 3% from the previous quarter’s dividend. The common stock cash dividend is payable on April 27 to investors of record on April 6. Moreover, the company’s board of directors approved a $15 billion increase for its stock repurchase program. There is no fixed termination date for the repurchase program, bringing the total authorized amount to $18 billion.
This February, Cisco Systems, Inc. announced that its fiscal second-quarter 2022 revenues came to $12.72 billion, up 6.35% year over year, and beat revenue estimates by $63.63 million. Moreover, the company reported earnings per share of $0.84, beating estimates by $0.03. On February 17, 2022, Barclays analyst Tim Long raised his price target on Cisco Systems, Inc. to $68 from $61 and reiterated an Overweight rating on the shares. The analyst sees upside for the stock citing the IT sector’s continued recovery along with the company’s strong earnings.
By the end of the fourth quarter of 2021, 57 hedge funds were long Cisco Systems, Inc. having stakes worth $3.42 billion. Platinum Asset Management’s stakes in the company, as of December 31, 2021, were valued at $2.2 million. The investment covers 0.02% of Kerr Neilson’s hedge fund portfolio.
ClearBridge Investments mentioned Cisco Systems, Inc. in its third-quarter 2021 investor letter. Here is what the firm said:
“We reinvested a portion of the proceeds into existing holding Cisco Systems, which also has highly valuable technology and an improving secular growth story with its leading position in core networking hardware, as well as in its growing software and services business. Cisco has refocused on winning share in the large and growing hyperscale market and has been investing aggressively in R&D to support growth. We believe Cisco has found new legs after previously ceding some growth opportunities in cloud while maintaining its strong presence in the carrier and enterprise markets. Cisco boasts a strong balance sheet and accelerating multiyear growth while trading at a modest multiple of earnings.”
1. Gilead Sciences, Inc. (NASDAQ:GILD)
Stake Value of Platinum Asset Management: $81,347,000
Percentage of Platinum Asset Management’s 13F Portfolio: 2.26%
Dividend Yield as of April 12: 4.72%
Number of Hedge Fund Holders: 54
Gilead Sciences, Inc. (NASDAQ:GILD) operates as a biopharmaceutical company in the United States, Europe, and internationally. As of April 12, 2022, Gilead Sciences, Inc. has a forward yield of 4.72%, an annual dividend payout ratio of 38.96%, and boasts a 5-year dividend growth rate of 8.18%
This February, the company reported earnings for the fiscal fourth quarter of 2021. According to the company’s earnings report, Gilead Sciences, Inc. generated revenues of $7.24 billion, down 2.39% year over year, but outperformed market consensus by over $0.60 million. The company reported earnings per share of $0.69, missing EPS estimates by $0.92.
This April, Piper Sandler analyst Do Kim raised his price target on Gilead Sciences, Inc. to $72 from $71 and maintained a Neutral rating on the shares.
Gilead Sciences, Inc. is rising in popularity among analysts and investor circles alike. At the close of Q4 2021, 54 hedge funds held stakes in Gilead Sciences, Inc.. The total value of these stakes amounted to more than $2.36 billion, up from $1.75 billion in Q3 2021 with 55 positions.
Here is what ClearBridge Investments had to say about Gilead Sciences, Inc. in its fourth-quarter 2021 investor letter:
“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”
You can also take a look at 10 Best Tech Stocks To Buy Now According To Billionaire Laffont and 10 Best Stocks To Buy Now According To Quant Billionaires.
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originally published on Insider Monkey.
