In this article, we discuss 12 best environmental dividend stocks to buy according to Al Gore.
Al Gore is an American politician, investor, environmentalist, and advocate for climate action. In addition to his political career, Al Gore is widely known for his work in raising awareness about climate change and promoting environmental activism. He is the founder and chairman of The Climate Reality Project, a non-profit organization focused on climate education and advocacy. He co-founded Generation Investment Management (GIM) in 2004, which follows a peculiar investment approach. The hedge fund employs a variety of strategies to identify and invest in sustainable companies, including analyzing environmental, social, and governance (ESG) factors, engaging with company management to encourage sustainable practices, and seeking out companies that are leaders in their industries in terms of sustainability.
Earlier this year, Gore spoke about climate change at an annual meeting of the World Economic Forum’s session at Davos. He said that the crisis is worsening at a rapid pace. He also lauded Greta Thunberg’s recent actions to prevent the expansion of coal mines in Germany. Here are some comments from the environmentalist:
“There are a lot of words and there are some meaningful commitments, but we are still failing badly. We need to have a supermajority process instead of unanimity in the COP. We cannot let oil companies, gas companies, and petro-states tell us what is permissible.”
In May 2022, GIM launched a $1.7 billion Sustainable Solutions Fund IV, which focuses on investing in high-growth companies that are leaders in sustainability, with a particular focus on those that are driving positive environmental and social impact. In our previous article, we also reported that this fund is collaborating with other ESG-centric programs to make investments in reducing global warming levels.
At the end of the fourth quarter of 2022, Generation Investment Management’s 13F portfolio had a total value of over $17.3 billion, compared with $16.8 billion in the previous quarter. Some of the fund’s major holdings include Amazon.com, Inc. (NASDAQ:AMZN), Mastercard Incorporated (NYSE:MA), and Microsoft Corporation (NASDAQ:MSFT). Dividend stocks also take up a significant portion of the portfolio. In this article, we will discuss the best environmental dividend stocks to buy according to Al Gore.
Our Methodology:
For this list, we selected dividend stocks from Generation Investment Management’s 13F portfolio as of Q4 2022. These companies are increasingly deploying environmental, social, and governance (ESG) tools in their financial investments and analysis. We analyzed the hedge fund sentiment for these stocks using Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the fourth quarter of 2022. The stocks are ranked in ascending order of the number of hedge funds having stakes in them.
12 Best Environmental Dividend Stocks To Buy According To Al Gore
12. Equifax Inc. (NYSE:EFX)
Number of Hedge Fund Holders: 26
Generation Investment Management’s Stake Value: $931,796,050
Equifax Inc. (NYSE:EFX) is a Georgia-based consumer credit reporting company that also provides a wide range of other business solutions to its consumers. At the end of Q4 2022, Generation Investment Management owned roughly 4.8 million shares in the company, worth over $931.7 million. The company represented 5.37% of Al Gore’s portfolio. Amazon.com, Inc. (NASDAQ:AMZN), Mastercard Incorporated (NYSE:MA), and Microsoft Corporation (NASDAQ:MSFT) are some other important holdings of the firm.
Equifax Inc. (NYSE:EFX), one of the best dividend stocks on our list, has pledged to reduce its global environmental impact and has committed to net-zero greenhouse gas emissions by 2040.
On February 2, Equifax Inc. (NYSE:EFX) declared a quarterly dividend of $0.39 per share, which fell in line with its previous dividend. The company has been paying uninterrupted dividends to shareholders since 1987. The stock has a dividend yield of 0.80%, as of April 15.
At the end of December 2022, 26 hedge funds tracked by Insider Monkey reported having stakes in Equifax Inc. (NYSE:EFX), compared with 33 in the previous quarter. The collective value of these stakes is over $2.2 billion.
TimesSquare Capital Management mentioned Equifax Inc. (NYSE:EFX) in its Q3 2022 investor letter. Here is what the firm has to say:
“New to the portfolio is Equifax Inc. (NYSE:EFX), a credit bureau that also provides human capital management outsourcing services. Their Workforce Solutions segment continues to grow at a steady pace.”
11. Carlisle Companies Incorporated (NYSE:CSL)
Number of Hedge Fund Holders: 41
Generation Investment Management’s Stake Value: $253,481,636
Carlisle Companies Incorporated (NYSE:CSL) is an American diversified company that designs and manufactures a wide range of products that belong to different industries. The company is committed to deploying sustainable and efficient processes in the design and manufacturing of its products.
Carlisle Companies Incorporated (NYSE:CSL) currently offers a quarterly dividend of $0.75 per share and has a dividend yield of 1.42%, as of April 15. The company is one of the best dividend stocks on our list as it has raised its payouts for 46 years in a row.
At the end of Q4 2022, Generation Investment Management owned over 1 million shares in Carlisle Companies Incorporated (NYSE:CSL), with a total value of over $253.4 million. The company made up 1.46% of Al Gore’s portfolio.
As of the close of Q4 2022, 41 hedge funds in Insider Monkey’s database owned stakes in Carlisle Companies Incorporated (NYSE:CSL), worth roughly $8 billion collectively.
Madison Funds mentioned Carlisle Companies Incorporated (NYSE:CSL) in its Q4 2022 investor letter. Here is what the firm has to say:
“The bottom five detractors for the quarter were Carlisle Companies Incorporated (NYSE:CSL), Brown & Brown, Brookfield, CarMax, and Armstrong World Industries. Following robust outperformance during the first three quarters of the year, Carlisle shares took a step back this quarter as investors worried about commercial roofing demand in a potentially slowing economy.”
10. Baxter International Inc. (NYSE:BAX)
Number of Hedge Fund Holders: 41
Generation Investment Management’s Stake Value: $553,844,048
Baxter International Inc. (NYSE:BAX) is an Illinois-based multinational healthcare company that deals in products that treat various chronic diseases. The company has set goals to reduce its environmental footprint, including reducing greenhouse gas emissions, water usage, and waste generation. Moreover, it has also implemented sustainable practices in its supply chain, such as using recycled materials and reducing packaging waste.
Generation Investment Management started investing in Baxter International Inc. (NYSE:BAX) during the fourth quarter of 2019 with over 6.8 million shares. At the end of Q4 2022, the hedge fund’s total stakes in the company amounted to over $553.8 million, which represented 3.19% of its 13F portfolio.
One of the best dividend stocks on our list, Baxter International Inc. (NYSE:BAX) has been raising its dividends consistently for the past five years. The company currently pays a quarterly dividend of $0.29 per share for a dividend yield of 2.69%, as of April 15.
As per Insider Monkey’s Q4 database, 41 hedge funds reported having stakes in Baxter International Inc. (NYSE:BAX), with a total value of over $1.88 billion. Among these hedge funds, Ken Griffin and Larry Robbins were some of the company’s leading stakeholders in Q4.
9. Microchip Technology Incorporated (NASDAQ:MCHP)
Number of Hedge Fund Holders: 46
Generation Investment Management’s Stake Value: $82,367,633
Microchip Technology Incorporated (NASDAQ:MCHP) is an Arizona-based company that specializes in the manufacturing of integrated circuits and related products. At the end of Q4 2022, Generation Investment Management owned roughly 1.2 million shares in the company with a total value of $82.3 million. The company accounted for 0.47% of Al Gore’s portfolio.
Microchip Technology Incorporated (NASDAQ:MCHP) has implemented a range of energy-efficient technologies in its facilities and has invested in renewable energy sources such as solar power.
On February 2, Microchip Technology Incorporated (NASDAQ:MCHP) declared a 9.1% hike in its quarterly dividend to $0.358 per share. The company started its dividend policy in 2003 and has raised its dividends 76 times since then. The stock’s dividend yield on April 15 came in at 1.80%. It is among the best dividend stocks on our list.
As of the close of Q4 2022, 46 hedge funds in Insider Monkey’s database owned stakes in Microchip Technology Incorporated (NASDAQ:MCHP), up from 45 in the previous quarter. These stakes have a consolidated value of nearly $1.3 billion.
TimesSquare Capital Management mentioned Microchip Technology Incorporated (NASDAQ:MCHP) in its Q4 2022 investor letter. Here is what the firm has to say:
“Microchip Technology Incorporated (NASDAQ:MCHP) is a semiconductor manufacturer offering smart, connected, and secure embedded control solutions. Revenues in the latest quarter exceeded the consensus and that lifted the stock by 16%. While the company acknowledges the weak macro environment, they are not seeing much of an impact on their business. They have a sizable business backlog, multi-year agreements with large customers, and secular growth trends in areas such as 5G and Data Centers. While there has been weakness in some consumer end markets, Microchip has little exposure in areas such as personal computers and smartphones.”
8. Becton, Dickinson and Company (NYSE:BDX)
Number of Hedge Fund Holders: 52
Generation Investment Management’s Stake Value: $491,592,671
Becton, Dickinson and Company (NYSE:BDX) is a New Jersey-based multinational medical device company. On January 24, the company announced a quarterly dividend of $0.91 per share, which was consistent with its previous dividend. The company maintains a 51-year streak of dividend growth. It is one of the best dividend stocks on our list with a dividend yield of 1.42%, as of April 15.
Generation Investment Management slashed its position Becton, Dickinson and Company (NYSE:BDX) by 40% during the fourth quarter of 2022. The hedge fund’s total stake in the company amounted to nearly $491.6 million, which represented 2.83% of its 13F portfolio.
7. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 61
Generation Investment Management’s Stake Value: $446,329,605
Texas Instruments Incorporated (NASDAQ:TXN) is a Texas-based semiconductor manufacturing company. During the fourth quarter of 2022, Generation Investment Management increased its position in the company by 451% to over $446.3 million. The company made up 2.57% of Al Gore’s 13F portfolio.
Texas Instruments Incorporated (NASDAQ:TXN) is focused on improving energy efficiency, reducing GHG emissions, reducing water, and reusing more water.
Texas Instruments Incorporated (NASDAQ:TXN) currently pays a quarterly dividend of $1.24 per share and has a dividend yield of 2.77%, as of April 15. The company is one of the best dividend stocks on our list as it has been raising its dividends consistently for the past 19 years.
At the end of December 2022, 61 hedge funds in Insider Monkey’s database owned stakes in Texas Instruments Incorporated (NASDAQ:TXN), up from 59 in the previous quarter. These stakes have a collective value of nearly $2 billion.
6. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 70
Generation Investment Management’s Stake Value: $678,106,508
Applied Materials, Inc. (NASDAQ:AMAT) is a California-based company that supplies services and software for the manufacturing of semiconductor chips. The company’s ESG strategy includes sustainability in its operations and culture in alignment with its corporate strategy.
On March 13, Applied Materials, Inc. (NASDAQ:AMAT) declared a 23.1% hike in its quarterly dividend to $0.32 per share. Through this increase, the company took its dividend growth streak to six years, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 1.13%, as of April 15.
At the end of Q4 2022, Generation Investment Management owned nearly 7 million shares in Applied Materials, Inc. (NASDAQ:AMAT), after increasing its position in the company by 4% during the quarter. The firm’s total AMAT stake stood at 3.91%, which represented 3.91% of its 13F portfolio. In addition to AMAT, Amazon.com, Inc. (NASDAQ:AMZN), Mastercard Incorporated (NYSE:MA), and Microsoft Corporation (NASDAQ:MSFT) are some other major holdings of Al Gore.
Of the 943 hedge funds tracked by Insider Monkey at the end of Q4 2022, 70 funds owned stakes in Applied Materials, Inc. (NASDAQ:AMAT), up from 67 in the previous quarter. These stakes have a total value of over $3.78 billion.
Davis Advisers mentioned Applied Materials, Inc. (NASDAQ:AMAT) in its annual 2022 investor letter. Here is what the firm has to say:
“If Berkshire represents “growing value” then Applied Materials, Inc. (NASDAQ:AMAT) might be said to represent “undervalued growth.” Founded more than a half century ago, Applied Materials has grown to be the largest supplier of manufacturing tools, services and software to the semiconductor industry. Holding more than 15,000 patents, Applied has become the irreplaceable supplier to the critical global growth industry, semiconductors. Because this company’s earnings can be uneven, short-sighted investors often label this company as “cyclical” and assign it a relatively low valuation.
We disagree and, having perused more than 50 years of data, conclude that Applied is unquestionably a growth company trading at a value price. Figure 8 shows the two sustainable drivers of this growth. The green bars indicate that semiconductor manufacturers have grown industry revenue at 7.5% over the last decade, more than three times the growth of the U.S. economy over this same decade. The orange line indicates that the percentage of this revenue that the industry commits to capital spending has gradually risen from roughly 20% to 30%. Putting these two trends together, it should come as no surprise that Applied has grown revenue at a rate of 11%, and operating income at more than 19% over this same time period.
In the near term, the impact of the chip industry’s post-pandemic inventory correction, which could reduce equipment demand, may more than offset the benefit of recent supply chain issues that limited Applied Materials’ ability to meet customer demand. Longer term, geopolitical tensions between China and the U.S. are driving investment in potentially redundant chip production globally, while at the same time the U.S. and her allies are restricting export of leading edge production tools into China. Even though the near term is frustratingly veiled in uncertainty, the recent shortages and trade restrictions have firmly established that access to chip-production technology is essential to every major industrial economy. Given this, we see more opportunity than risk and estimate that Applied Materials could sell at about 10 times what the company could be earning three-to-five years from now.”
5. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 74
Generation Investment Management’s Stake Value: $1,218,280,388
An American financial services company, The Charles Schwab Corporation (NYSE:SCHW) was the largest holding of Generation Investment Management in Q4 2022. The hedge fund owned stakes worth over $1.2 billion in the company, which represented 7.03% of its 13F portfolio. The fund boosted its position in the company by 1% during the quarter.
The Charles Schwab Corporation (NYSE:SCHW), one of the best dividend stocks on our list, is committed to ESG through sustainable real estate practices, responsible workflows, and investment stewardship.
The Charles Schwab Corporation (NYSE:SCHW) currently offers a quarterly dividend of $0.25 per share for a dividend yield of 1.97%, as of April 15.
As of the close of Q4 2022, 74 hedge funds in Insider Monkey’s database held investments in The Charles Schwab Corporation (NYSE:SCHW), worth over $8.1 billion collectively.
LVS Advisory mentioned The Charles Schwab Corporation (NYSE:SCHW) in its Q1 2023 investor letter. Here is what the firm has to say:
“We exited The Charles Schwab Corporation (NYSE:SCHW) during the week leading up to the Silicon Valley Bank failure at a price in the high $60s. I sent an ad hoc note to partners on March 11 discussing our decision to sell the stock but I will add some additional context here. We invested in Charles Schwab during the summer of 2022 (discussed in our Q3 2022 letter) shortly after making our investment in Interactive Brokers. While Interactive Brokers is focused on faster-growing international markets and more sophisticated traders, Charles Schwab is a more mature US business focused on retirement accounts and wealth managers. Our investment thesis was that Schwab would benefit from higher interest rates and after years of investment would begin returning a significant amount of capital to shareholders.
My view changed when it became clear that liquidity would become a greater issue for all banks in early March. We believe Schwab has enough liquidity to operate its business, but we no longer believe the company is in a position to return capital. Furthermore, Schwab saw a higher degree of deposit flight in Q4 than we expected leading us to believe the problem could get worse before it gets better. Schwab may even need to raise additional equity capital to reassure the market of its liquidity position which would drastically change the risk/reward calculation of investing in the stock. While we realized a ~6% loss on our investment, our ability to quickly recalibrate our views during the early stages of the March banking crisis prevented us from losing an additional 20%+ if we had held on until today.”
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4. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 75
Generation Investment Management’s Stake Value: $838,396,699
Analog Devices, Inc. (NASDAQ:ADI) is an American semiconductor manufacturing company that also specializes in power management technology. On February 14, the company declared a 13% hike in its quarterly dividend to $0.86 per share. This was the company’s 20th dividend increase in the last 19 years. The stock has a dividend yield of 1.82%, as of April 15.
During the fourth quarter of 2022, Generation Investment Management boosted its position in Analog Devices, Inc. (NASDAQ:ADI) by 3%, ending the period with stakes worth nearly $838.4 million. The company represented 4.84% of Al Gore’s portfolio.
The number of hedge funds tracked by Insider Monkey owning stakes in Analog Devices, Inc. (NASDAQ:ADI) grew to 75, from 66 a quarter earlier. These stakes have a collective value of roughly $5 billion.
Giverny Capital mentioned Analog Devices, Inc. (NASDAQ:ADI) in its Q4 2022 investor letter. Here is what the firm has to say:
“Ashtead Group and Analog Devices, Inc. (NASDAQ:ADI) were new purchases, made in May. They both performed well from our original purchase prices and I believe we upgraded the quality of our portfolio by adding them.
We established four new positions during the year, each of about 2%: Analog Devices, Ashtead Group, Floor & Décor, and Installed Building Products. We discussed these in prior letters and I’m pleased to report that Ashtead and Analog were among our best performing positions for the year.”
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3. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 92
Generation Investment Management’s Stake Value: $487,833,143
Thermo Fisher Scientific Inc. (NYSE:TMO) is an American provider of medical equipment, analytical instruments, and other consumables. The company aims to manufacture products with minimal environmental impact. At the end of Q4 2022, Generation Investment Management owned stakes worth over $487.8 million in the company, which represented 2.81% of its 13F portfolio.
Thermo Fisher Scientific Inc. (NYSE:TMO) currently pays a quarterly dividend of $0.35 per share, having raised it by 17% on February 22. Through this increase, the company took its dividend growth streak to six years. The stock has a dividend yield of 0.24%, as recorded on April 15. It is among the best dividend stocks on our list.
At the end of Q4 2022, 92 hedge funds in Insider Monkey’s database owned stakes in Thermo Fisher Scientific Inc. (NYSE:TMO), the same as in the previous quarter. The collective value of these stakes is over $7 billion.
Polen Capital mentioned Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q4 2022 investor letter. Here is what the firm has to say:
“Thermo Fisher Scientific Inc. (NYSE:TMO) is a leader in attractive end markets with a skilled management team who has demonstrated the ability to consistently and wisely allocate capital. It is the world leader in serving science. It is a globally scaled supplier serving more than 400,000 customers working within pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, research institutions, and government agencies. Thermo provides many of the products and services that companies in these industries, particularly pharma and biotech, need to operate and drive science forward. The company manufactures and sells instruments, reagents, and consumables used for a wide range of applications in labs. (Click here to view the full text)
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2. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 139
Generation Investment Management’s Stake Value: $650,968,296
An American financial services company, Mastercard Incorporated (NYSE:MA) is next on our list of the best dividend stocks. The company currently pays a quarterly dividend of $0.57 per share and has a dividend yield of 0.61%, as of April 15. It has been raising its dividends consistently for the past 10 years.
Mastercard Incorporated (NYSE:MA) announced the reduction of first-use plastic in payment card production, replacing it with recyclable, bio-sourced, chlorine-free, and ocean plastics.
Mastercard Incorporated (NYSE:MA) was the eleventh-largest holding of Generation Investment Management at the end of Q4 2022. The hedge fund owned MA stakes worth nearly $651 million, which accounted for 3.75% of its 13F portfolio.
At the end of the December quarter 2022, 139 hedge funds owned stakes in Mastercard Incorporated (NYSE:MA), compared with 146 a quarter earlier. The collective value of these stakes is over $15.6 billion.
Oakmark Funds mentioned Mastercard Incorporated (NYSE:MA) in its Q1 2023 investor letter. Here is what the firm has to say:
“A brief discussion of Mastercard Incorporated (NYSE:MA) is also appropriate given we have held this company for nearly 13 years. It’s the 13th-largest contributor to performance for the Fund in our nearly 24-year history, but the largest in total dollars and percentage terms at nearly 1760%. While a terrific company, there were better priced alternatives in the quarter, so we sold our position. Our history with Mastercard fits the adage that all good things must come to an end.”
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1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Generation Investment Management’s Stake Value: $967,881,866
Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech company, which has a dedicated sustainability science team that ensures that it is reducing its carbon footprint. The company currently pays a quarterly dividend of $0.68 per share for a dividend yield of 0.95%, as of April 15. It is one of the best dividend stocks on our list as it has been raising its dividends for 16 years.
At the end of Q4 2022, Generation Investment Management owned over 4 million shares in Microsoft Corporation (NASDAQ:MSFT), worth over $967.8 million. The company made up 5.58% of Al Gore’s portfolio.
Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q4 2022 investor letter. Here is what the firm has to say:
“Shares of mega-cap software company Microsoft Corporation (NASDAQ:MSFT) outperformed despite a mixed fiscal first quarter due to macro challenges that negatively impacted results and guidance, including foreign exchange headwinds, weakening PC demand, and a cyclical slowdown in advertising spending. Total revenue beat Street expectations at 16% constant-currency growth (vs. estimates of 14%), but its Azure cloud computing business missed analyst projections by 1% for the second straight quarter, though it still grew a robust 42% year-over-year, as Microsoft helped its customers optimize existing workloads due to the macro backdrop. While the optimization of workloads is a short-term headwind, we believe it is the right thing to do and should help drive more consumption with customers over time. Our research continues to indicate that the longer-term secular trend of cloud computing remains healthy and intact. For example, in its fourth quarter CIO survey report, Morgan Stanley showed, among other things, that cloud computing was the second highest CIO spending priority (behind only security software), that cloud application workloads were expected to increase from 27% of total workloads today to 46% by the end of 2025, and that Azure was listed as the preferred cloud vendor and likely to take share over the short and long term.9 Additionally, Microsoft is positioned to be a prime beneficiary of ChatGPT. Microsoft invested $1 billion in OpenAI in 2020 and is rumored to be considering investing an additional $10 billion for a 49% stake in the company. Moreover, ChatGPT runs on Microsoft’s Azure platform, and Microsoft recently announced the general availability of its Azure OpenAI Service enabling Azure customers to access advanced AI models, including ChatGPT itself soon. We remain bullish on Microsoft’s long-term opportunity in the cloud, and believe AI has the potential to be additive to growth for years to come.”
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Disclosure. None. 12 Best Environmental Dividend Stocks To Buy According To Al Gore is originally published on Insider Monkey.
