In this article, we discuss 10 dividend stocks according to John Armitage’s Egerton Capital. If you want to read our detailed analysis of the hedge fund’s past performance and Armitage’s investment philosophy, go directly to read 10 Best Dividend Stocks According to British-Irish Billionaire John Armitage.
5. Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 65
Dividend Yield as of May 26: 1.65%
Egerton Capital’s Stake Value: $730,100,000
Lowe’s Companies, Inc. (NYSE:LOW) is an American retail company that specializes in home improvement. In 2021, the company announced a 33% increase in its quarterly dividend to $0.80 per share, which was the company’s 25th consecutive year of dividend growth. Moreover, the company has paid dividend to shareholders every quarter since going public in 1961.
With a stake worth over $9.6 billion, Adam Capital was the largest shareholder of Lowe’s Companies, Inc. (NYSE:LOW) in Q1 2022. Overall, 65 hedge funds in Insider Monkey’s database held stakes in the company in Q1, down from 72 in the previous quarter.
Egerton Capital started building its position in Lowe’s Companies, Inc. (NYSE:LOW) during the fourth quarter of 2021, with shares worth roughly $600 million. In Q1 2022, the hedge fund increased its position in the company by 57%, equaling shares worth over $730 million. Lowe’s Companies, Inc. (NYSE:LOW) accounted for 3.84% of John Armitage’s portfolio.
In May, Jefferies called sales and margin guidance of Lowe’s Companies, Inc. (NYSE:LOW) ‘achievable’ and set a $238 price target on the stock, with a Buy rating on the shares.
Pershing Square Capital Management mentioned Lowe’s Companies, Inc. (NYSE:LOW) in its Q4 2021 investor letter. Here is what the firm has 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.”
4. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 67
Dividend Yield as of May 26: 1.84%
Egerton Capital’s Stake Value: $615,903,000
Analog Devices, Inc. (NASDAQ:ADI) is an American multinational semiconductor manufacturing company. At the end of Q1 2022, Egerton Capital held shares of the company worth approximately $616 million, after increasing its position by 20%. The company represented 3.24% of John Armitage’s portfolio.
In February, Analog Devices, Inc. (NASDAQ:ADI) announced a 10% hike in its quarterly dividend to $0.76 per share, which was the company’s 19th consecutive dividend raise in the last 18 years. The stock’s dividend yield, as of May 25, was recorded at 1.84%.
As per Insider Monkey’s Q1 2022 database, 67 hedge funds held stakes in Analog Devices, Inc. (NASDAQ:ADI), down from 72 in the previous quarter. These stakes hold a consolidated value of over $4.8 billion.
Madison Funds mentioned Analog Devices, Inc. (NASDAQ:ADI) in its Q3 2021 investor letter. Here is what the firm has to say:
“At its 2017 investor day, Analog Device’s VP of Automotive, Mark Gill, described how the company’s content on well-equipped electric vehicles was $600 per car compared to $250 per car for the traditional 2017 internal combustion engine car. Since then, Analog has highlighted the success of its EV battery management systems (BMS) product nearly every quarter. The BMS product is hardware and software that manages the power into and out of the battery systems. It’s the brains of the operation. Analog says it’s on its fifth generation BMS product, that it has the no. 1 market share in high voltage products, and that it is on 5 of the top 10 selling EVs. While we think that the BMS product is just 1 to 1.5% of Analog Devices, Inc. (NASDAQ:ADI)’s product mix, we think that it could add nearly a point of revenue growth per year to the company’s top-line given the expected ramp in EV production. This is a material amount of growth atop an already nicely growing company revenue line.”
3. Tractor Supply Company (NASDAQ:TSCO)
Number of Hedge Fund Holders: 43
Dividend Yield as of May 26: 2.01%
Egerton Capital’s Stake Value: $20,518,000
Tractor Supply Company (NASDAQ:TSCO) is an American retail chain company that sells products for home improvement. Egerton Capital opened a new position in the company in Q1 2022, purchasing 88,190 shares worth over $20.5 million. The company accounted for 0.1% of John Armitage’s portfolio.
Insider Monkey’s Q1 2022 database shows that along with Egerton Capital, Tractor Supply Company (NASDAQ:TSCO) also grabbed the attention of other hedge funds, as 43 elite funds held stakes in the company at the end of Q1, up significantly from 31 in the previous quarter. The consolidated value of these stakes is over $1 billion.
In January, Tractor Supply Company (NASDAQ:TSCO) announced a 77% hike in its quarterly dividend to $0.92 per share, with a dividend yield of 2.01%, as of the close of May 26. This raise marked the company’s 12th consecutive year of dividend growth. In April, Oppenheimer presented a positive outlook on Tractor Supply Company (NASDAQ:TSCO), appreciating the company’s significant internal efforts. The firm raised its price target on the stock to $270, with an Outperform rating on the shares.
2. Canadian National Railway Company (NYSE:CNI)
Number of Hedge Fund Holders: 38
Dividend Yield as of May 26: 2.03%
Egerton Capital’s Stake Value: $1,259,358,000
Canadian National Railway Company (NYSE:CNI) is a Montreal-based rail freight company that transports billions of worth of goods. In May, BMO Capital upgraded the stock to Outperform from Market Perform and saw potential upside in shares. The firm set a C$170 price target on the stock.
During Q1 2022, Egerton Capital increased its position in Canadian National Railway Company (NYSE:CNI) by 22% and held shares worth over $1.25 billion. The company was the fourth-largest holding of the hedge fund, representing 6.63% of its 13F portfolio.
In January, Canadian National Railway Company (NYSE:CNI) announced a quarterly dividend of C$0.7325, reflecting a 19% growth from its previous dividend. The stock’s dividend yield was recorded at 2.03% on May 26.
At the end of Q1 2022, 38 hedge funds in Insider Monkey’s database held stakes in Canadian National Railway Company (NYSE:CNI), valued at roughly $8.4 billion. In comparison, 42 hedge funds held stakes in the company in the previous quarter, worth over $7.7 billion. TCI Fund Management held roughly $5 billion worth of stakes in the company, becoming its largest shareholder in Q1 2022.
1. Blackstone Mortgage Trust, Inc. (NYSE:BXMT)
Number of Hedge Fund Holders: 13
Dividend Yield as of May 26: 8.05%
Egerton Capital’s Stake Value: $84,973,000
Blackstone Mortgage Trust, Inc. (NYSE:BXMT) is an American real estate investment trust. In Q1 2022, the company reported revenue of $133.7 million, up 22.5% from the same period last year.
At the end of Q1 2022, 13 hedge funds tracked by Insider Monkey reported owning stakes in Blackstone Mortgage Trust, Inc. (NYSE:BXMT), down from 15 in the previous quarter.
Blackstone Mortgage Trust, Inc. (NYSE:BXMT) has been paying dividends to shareholders for over a decade now. The company currently pays a quarterly dividend of $0.62 per share, with a dividend yield of 8.05%, as of May 26.
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