In this article, we discuss the 10 best dividend stocks in Richard Chilton’s portfolio.
Richard Chilton is an American businessman and investor, who founded Chilton Investment Company in 1992. Prior to founding his own hedge fund, Chilton polished his trading skills while working with some of the biggest investment companies, such as Merrill Lynch and Allen & Company. Chilton currently sits on the board of the Metropolitan Museum of Art.
Chilton Investment Company utilizes a fundamental bottom-up approach while evaluating companies and finding the best business models. The firm seeks to deliver solid returns for its clients by protecting capital during market volatility. The hedge fund also provides tailored investment solutions and strategies for a diverse group of investors. Over the years, Chilton Investment’s Flagship Strategy Fund has generated solid returns, gaining 18.57% in 2013 and 13.99% in 2015. The hedge fund lost 13.66% in 2016, but came back in 2017, delivering a 12.18% return to shareholders.
As of Q1 2022, Chilton Investment Company holds a 13F portfolio valued at over $4.1 billion, down from $4.7 billion in the previous quarter. The hedge fund’s largest investment was in the services sector, along with healthcare, technology, and consumer goods. The fund’s most notable holdings in Q1 2022 include Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Amazon.com, Inc. (NASDAQ:AMZN).
Richard Chilton of Chilton Investment Company
Our Methodology:
In this article, we discuss the best dividend stocks in Richard Chilton’s portfolio. For the data mentioned in this list, we used Chilton Investment Management’s 13F portfolio as of Q1 2022.
Best Dividend Stocks According to Richard Chilton’s Chilton Investment Company
10. Costco Wholesale Corporation (NASDAQ:COST)
Dividend Yield as of May 20: 0.86%
Number of Hedge Fund Holders: 57
Chilton Investment Company’s Stake Value: $243,369,000
Costco Wholesale Corporation (NASDAQ:COST) is an American company that operates a chain of big-box retail stores. The company is one of the largest retailers in the world. On April 13, the company announced a 14% hike in its annual dividend and pays a quarterly dividend of $0.90 per share. This was the company’s 18th annual dividend increase, making it one of the most reliable dividend stocks in Richard Chilton’s portfolio. The stock’s dividend yield was recorded at 0.86%, as of May 20.
Costco Wholesale Corporation is one of the oldest holdings of Chilton Investment Company, as the hedge fund started investing in the company over a decade ago, purchasing shares worth over $33.5 million. In Q1 2022, the company is the fifth-largest holding of the hedge fund, accounting for 5.84% of its 13F portfolio. In May, Stifel called Costco Wholesale Corporation a ‘best-in-class retailer’ and highlighted the company’s solid growth in the recent quarter. The firm lifted its price target on the stock to $565, with a Buy rating on the shares.
As major technology stocks like Microsoft Corporation, Apple Inc., and Amazon.com, Inc. continue to lose ground in 2022, investors are flocking to defensive dividend stocks like COST.
As per Insider Monkey’s Q4 2021 data, 57 hedge funds held stakes in Costco Wholesale Corporation, up from 55 in the previous quarter. These stakes hold a consolidated value of over $5.4 billion, compared with $4.3 billion worth of stakes held by hedge funds in Q3 2021. Fisher Asset Management was the largest shareholder of Costco Wholesale Corporation in Q1 2022, holding stakes worth over $2.4 billion.
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.”
9. CSX Corporation (NASDAQ:CSX)
Dividend Yield as of May 20: 1.29%
Number of Hedge Fund Holders: 56
Chilton Investment Company’s Stake Value: $106,514,000
CSX Corporation (NASDAQ:CSX) is an American holding company, which focuses on rail transportation and real estate and is based in Florida. In Q1 2022, Chilton Investment Company increased its position in the company by 8% and held shares worth over $106.5 million. The company represented 2.55% of Richard Chilton’s portfolio. The hedge fund started building its position in CSX Corporation during the fourth quarter of 2017.
According to Insider Monkey’s Q4 2021 database, 56 hedge funds held shares in CSX Corporation, the same as in the previous quarter. These stakes hold a total value of over $5.3 billion, up from $4 billion worth of stakes held by hedge funds in the previous quarter.
In February, CSX Corporation announced a quarterly dividend of $0.10 per share, after raising its annual dividend by 7.5%. Over the past 10 years, the company has increased its dividend at a CAGR of 11%. As of May 20, the stock’s dividend yield stood at 1.29%.
In April, Argus highlighted the solid quarterly earnings of CSX Corporation and believed that the company will continue to improve in fiscal 2022-2023 due to its pricing power. The firm lifted its price target on the stock to $41, while maintaining a Buy rating on the shares.
ClearBridge Investments mentioned CSX Corporation in its Q4 2021 investor letter. Here is what the firm has to say:
“On a regional basis, the U.S. and Canada was the top contributor to quarterly performance, of which U.S. rail operators CSX was among the lead performers. CSX is one of five leading North American rail companies, with over 21,000 miles of rail, covering 23 states and 40+ ports. CSX is engaged in the transportation of rail freight in the Southeast, East, and Midwest via interchange with other rail carriers, to and from the rest of the U.S. and Canada. CSX performed well during the quarter after the company beats market expectations on its third-quarter results. The beats were largely driven by strong pricing, which could be hitting record highs, and healthy commodity/coal volume driven by the current energy crisis.”
8. Republic Services, Inc. (NYSE:RSG)
Dividend Yield as of May 20: 1.42%
Number of Hedge Fund Holders: 38
Chilton Investment Company’s Stake Value: $183,146,000
Republic Services, Inc. (NYSE:RSG) is an American solid waste collection company, providing services in waste disposal, waste transfer, recycling, and related services. This May, BofA upgraded the company to Buy, while lifting its price target on the stock to $150. The firm appreciated the company’s essential services with good margins and free cash flow.
Chilton Investment Management resumed investing in Republic Services, Inc. in 2017, after disposing of its entire stake in 2011. In Q1 2022, the hedge fund increased its position in the company by 3%, equaling shares worth over $183 million. The company accounted for 4.39% of Richard Chilton’s portfolio.
In 2021, Republic Services, Inc. announced an 8.2% increase in its annual dividend, taking its quarterly dividend to $0.46 per share. The company has maintained a 17-year track record of consistent dividend growth, with a 5-year dividend CAGR of 7.45%. The stock’s dividend yield stood at 1.42%, as of May 20.
As of Q4 2021, 38 hedge funds tracked by Insider Monkey held $1.35 billion worth of stakes in Republic Services, Inc.. In comparison, 31 hedge funds held stakes in the company in the previous quarter, valued at $1.2 billion. With stakes worth over $187 million, AQR Capital Management was the company’s leading shareholder in Q1 2022.
7. Tractor Supply Company (NASDAQ:TSCO)
Dividend Yield as of May 20: 2.04%
Number of Hedge Fund Holders: 31
Chilton Investment Company’s Stake Value: $88,218,000
Tractor Supply Company (NASDAQ:TSCO) is an American retail chain company that sells products for home improvement and other related services.
This April, Oppenheimer appreciated the ‘better than expected’ results of Tractor Supply Company in Q1 2022 and highlighted its fundamental strength and profitability. The firm lifted its price target on the stock to $270, while maintaining an Outperform rating on the shares.
In January, Tractor Supply Company announced a significant increase of 77% in its annual dividend, with a quarterly dividend of $0.92 per share. This marked the company’s 12th consecutive year of dividend growth. In the past five years, the company’s annual average rate of dividend growth stood at 20.9%, coming through as one of the most reliable dividend stocks for income investors. As of May 20, the stock’s dividend yield came to be recorded at 2.04%.
Chilton Investment Company initiated its position in Tractor Supply Company during the first quarter of 2018, at an average share price of $69.6. In Q1 2022, the hedge fund held stakes in the company worth over $88 million, after increasing its position by 8%. Tractor Supply Company accounted for 2.11% of Richard Chilton’s portfolio.
6. CVS Health Corporation (NYSE:CVS)
Dividend Yield as of May 20: 2.32%
Number of Hedge Fund Holders: 71
Chilton Investment Company’s Stake Value: $25,457,000
CVS Health Corporation (NYSE:CVS) is an American healthcare company with a core business in pharmacy and health insurance. The company is headquartered in Rhode Island. In May, Morgan Stanley named the company as one of its top Conviction stock picks.
Chilton Investment Company renewed its position in CVS Health Corporation in the first quarter of 2021, after pulling off its investments in the company in 2019. In Q1 2022, the hedge fund held shares worth over $25.4 million in the company, which accounted for 0.61% of Richard Chilton’s portfolio. Some of the hedge fund’s other major holdings in Q1 2022 include Microsoft Corporation, Apple Inc., and Amazon.com, Inc..
In Q4 2021, CVS Health Corporation remained popular among hedge funds, as 71 hedge funds tracked by Insider Monkey held positions in the company, up from 61 in the previous quarter. These stakes hold a consolidated value of roughly $2 billion, compared with $1 billion worth of stakes held by hedge funds in Q3 2021. Harris Associates held the largest position in CVS Health Corporation in Q1 2022, with shares worth over $421.7 million.
In 2021, CVS Health Corporation increased its annual dividend by 10% and pays a quarterly dividend of $0.55 per share. The stock’s dividend yield was recorded at 2.32% on May 20.
ClearBridge Investments mentioned CVS Health Corporation in its Q4 2021 investor letter. Here is what the firm has 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.”
5. Wells Fargo & Company (NYSE:WFC)
Dividend Yield as of May 20: 2.40%
Number of Hedge Fund Holders: 94
Chilton Investment Company’s Stake Value: $1,723,000
Wells Fargo & Company is an American multinational financial services company based in California. In its Q1 2022 earnings, the company did not meet the analysts’ expectations and generated revenue of $17.5 billion, missing estimates by $230 million.
In January 2022, Wells Fargo & Company announced a 25% hike in its annual dividend, with a quarterly dividend of $0.25 per share. The stock’s dividend yield was recorded at 2.40% on May 20. Chilton Investment Company first invested in Wells Fargo & Company in 2011, purchasing shares worth over $3 million. In Q1 2022, the hedge fund slashed its stake in the company by 2% and held shares worth over $1.7 million. The company represented 0.04% of Richard Chilton’s portfolio.
In its Q1 2022 investors’ note, Barclays appreciated the overall performance of Wells Fargo & Company and its step to increase its 2022 net interest income and loan growth outlook. The firm lifted its price target on the stock to $64, while maintaining an Overweight rating on the shares.
By the end of December 2021, 94 hedge funds tracked by Insider Monkey held stakes in Wells Fargo & Company, up from 88 in the previous quarter. These stakes hold a consolidated value of over $6.1 billion.
Davis Funds mentioned Wells Fargo & Company in its Q4 2021 investor letter. Here is what the firm has to say:
“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Wells Fargo.”
4. Union Pacific Corporation (NYSE:UNP)
Dividend Yield as of May 20: 2.43%
Number of Hedge Fund Holders: 59
Chilton Investment Company’s Stake Value: $231,572,000
Union Pacific Corporation (NYSE:UNP) is a Nebraska-based transport company and is the second-largest railroad in the US. It operates over 8,300 locomotives in over 23 US states. In Q4 2021, the company saw a decline in hedge fund interest. 59 hedge funds tracked by Insider Monkey held over $5.6 billion worth of stakes in Union Pacific Corporation in Q4. In comparison, 63 hedge funds held stakes in the company in the previous quarter, valued at $4.8 billion.
In April, Raymond James acknowledged the solid quarterly performance and improved service and expressed confidence that the company is well-positioned to benefit from the growing truck market. The firm lifted its price target on Union Pacific Corporation to $285, with a Strong Buy rating on the shares.
Chilton Investment Company initiated its position in Union Pacific Corporation in 2011 with shares worth only $2 million. The hedge fund has increased its position in the company over time and in Q1 2022, the company was the sixth-largest holding of the hedge fund. It held shares worth over $231.5 million in the company, which represented 5.56% of Richar Chilton’s portfolio.
In May 2022, Union Pacific Corporation announced a 10% increase in its annual dividend and pays a quarterly dividend of $1.30 per share. The company has been increasing its dividend for the past 15 years, falling into the category of Dividend Contenders. Moreover, Union Pacific Corporation has been offering dividends to shareholders on its common stock for the past 123 years, consecutively. As of May 20, the stock’s dividend yield stood at 2.43%.
ClearBridge Investments mentioned Union Pacific Corporation in its Q4 2021 investor letter. Here is what the firm has to say:
“Despite these mixed emerging growth results, the ClearBridge Global Growth Strategy outperformed the benchmark due to resilience among our secular and structural growth holdings. These consistent growers were complemented by solid contributions from structural holdings including Union Pacific.”
3. The Home Depot, Inc. (NYSE:HD)
Dividend Yield as of May 20: 2.65%
Number of Hedge Fund Holders: 68
Chilton Investment Company’s Stake Value: $220,059,000
The Home Depot, Inc. (NYSE:HD) is an American home improvement retailer dealing in supplying tools, construction products, and related products. In May, Citigroup increased its earnings estimates on the company for fiscal 2022 and raised its price target on the stock to $348. The firm rated the stock as Buy.
With shares worth over $2.4 billion, Fisher Asset Management was the leading shareholder of The Home Depot, Inc. in Q1 2022. Overall, 68 hedge funds tracked by Insider Monkey held stakes in the company in Q4 2021, up from 58 in the previous quarter. These stakes hold a consolidated value of over $6 billion.
The Home Depot, Inc. currently pays a quarterly dividend of $1.90, after announcing a 15% hike in its annual dividend in February. This marked the company’s 14th annual dividend increase. The stock’s dividend yield was recorded to be at 2.65%, as of May 20.
The Home Depot, Inc. has been a part of Chilton Investment Company’s portfolio since 2010. In Q1 2022, the hedge fund raised its stake in the company by 2% to $220 million. The company represented 5.28% of Richard Chilton’s portfolio.
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.”
2. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of May 20: 2.89%
Number of Hedge Fund Holders: 70
Chilton Investment Company’s Stake Value: $2,905,000
An American beverage company, The Coca-Cola Company (NYSE:KO) got the investors’ attention after it announced an 18% growth in its organic sales in Q1 2022, versus the analysts’ expectations of 9%. The stock is up 2.83% for 2022 so far.
Following the strong Q1 results, Wall Street analysts have presented a positive stance on The Coca-Cola Company. In April, both Truist and Cowen lifted their price targets on the stock to $75 and $68, respectively. In Q1 2022, Chilton Investment Company increased its position in The Coca-Cola Company by 84% and held shares worth roughly $3 million. The company accounted for 0.06% of Richard Chilton’s portfolio.
In February, The Coca-Cola Company announced a 4.8% increase in its annual dividend and pays a quarterly dividend of $0.44 per share. The company has maintained a 60-year track record of consistent dividend growth. The stock’s dividend yield, as of May 20, stood at 2.89%.
As per Insider Monkey’s Q4 2021 data, 70 elite funds held stakes in The Coca-Cola Company, up from 61 in the previous quarter. These stakes hold a consolidated value of over $28.6 billion.
ClearBridge Investments mentioned The Coca-Cola Company in its Q4 2021 investor letter. Here is what the firm has 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.”
1. JPMorgan Chase & Co. (NYSE:JPM)
Dividend Yield as of May 20: 3.41%
Number of Hedge Fund Holders: 107
Chilton Investment Company’s Stake Value: $1,715,000
JPMorgan Chase & Co. is an American multinational investment bank and financial services company headquartered in New York. In its Q1 2022 financial results, the company generated a revenue of $30.7 billion, which beat analysts’ estimates by $170 million.
JPMorgan Chase & Co. has been increasing its annual dividends for the past 12 years consecutively. Recently, the company increased its annual dividend in 2021 by 11.1%, which takes its quarterly dividend to $1.00 per share. The stock’s dividend yield was recorded at 3.41%, as of May 20. In Q1 2022, Chilton Investment Company held a stake worth over $1.7 million in JPMorgan Chase & Co., which represented 0.04% of Richard Chilton’s portfolio.
In April, Piper Sandler appreciated the underlying fundamental trends of JPMorgan Chase & Co. and raised its price target on the stock to $170, while maintaining an Overweight rating on the shares.
Of the 900+ elite funds tracked by Insider Monkey, 107 hedge funds held stakes in JPMorgan Chase & Co. as of the end of December 2021. These stakes hold a collective value of over $6.5 billion. In comparison, 101 hedge funds held stakes in the New York-based company in the previous quarter, worth $5.6 billion.
ClearBridge Investments mentioned JPMorgan Chase & Co. in its Q4 2021 investor letter. Here is what the firm has to say:
“Our energy and financials holdings kept pace in the 2021 rally. In financials, JPMorgan benefited from strong economic growth, a rise in Treasury yields, and a benign credit environment.”
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This article is originally published at Insider Monkey.
