In this article we will take a look at the 10 best dividend stocks to buy according to billionaire Richard Chilton.
Richard Lockwood Chilton is an American investor, businessman, founder, chairman, and CEO of Chilton Investment Company. Chilton is a finance and economics graduate from Alfred University and worked at Merrill Lynch and Allen & Company before launching Chilton Investment Company in 1992. He has a net worth of around $1.2 billion, and his investment strategies are value-oriented based on fundamental research and disciplined portfolio management.
Based on the latest 13F holdings for the first quarter of 2021, Chilton owns 1 million shares in Microsoft Corporation (NASDAQ: MSFT) after cutting his holding in the company by 10.11% from Q4 2020. Rosenblatt recently initiated coverage on Microsoft Microsoft with a Buy rating and $301 price target. The firm called Microsoft the “most important software company on the planet.” The firm praised Microsoft’s revenue diversification efforts and said that about 78% of the company’s revenue would be soon coming from recurring sources.
Chilton also has a significant holding in Alphabet Inc. (NASDAQ: GOOG). The company has announced forming an alliance with other tech giants like Apple Inc. (NASDAQ: AAPL) and Amazon.com, Inc. (NASDAQ: AMZN) that will power smart devices and generally make the technology easier to develop and use and more widely accepted. Alphabet Inc. (NASDAQ: GOOG) has also announced that Google Pay, its mobile payment services, will now allow users in the U.S. to send money to India and Singapore. Alphabet Inc. intends to offer these services in partnership with money transfer companies Western Union and Wise with their features integrated into the Google Pay app. Users will choose to receive their money either through Western Union or Wise.
Chilton owns 1.3 million shares in Amazon.com, Inc. after reducing his holding by 10.06% from Q4 2020. The company recently won an appeal against the European Commission, which had ordered the company to pay back around $303 million in taxes to Luxembourg. In its ruling, the court noted the commission failed to prove Amazon.com, Inc. benefited from an illegal tax advantage. Amazon.com, Inc. has also sold bonds to refinance debt and buy stock to take advantage of the cheap borrowing costs.
But in this article we are going to take a look at some of the best dividend stocks in Richard Chilton’s Q1’2020 portfolio. These stocks include big names like Merck & Co., Inc., Bristol-Myers Squibb Company (NYSE: BMY), Broadcom Inc. (NASDAQ: AVGO), The Coca-Cola Company (NYSE: KO) and Pfizer Inc. (NYSE: PFE).
Richard Chilton of Chilton Investment Company
Chilton is an exception in an industry that is reeling from losses. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best Dividend Stocks to Buy According to Billionaire Richard Chilton
Here is the list of 10 best dividend stocks to buy according to billionaire Richard Chilton:
10. Bristol-Myers Squibb Company (NYSE: BMY)
Chilton’s Stake Value: $452,000
Percentage of Richard Chilton’s 13F Portfolio: 0.01%
Dividend Yield: 3.05%
No. of Hedge Fund Holders: 131
Bristol-Myers Squibb Company focuses on discovering, developing, licensing, producing, and marketing biopharmaceutical products around the world. The pharmaceutical company reported $11.1 billion in revenue in its first quarter of 2021, reflecting a 3% growth from Q1 2020. The growth in revenue reflects the company’s sustained growth in sales as well as the advancement of its product pipeline in all its four core therapeutic areas. Bristol-Myers Squibb Company ranks 10th in the list of best dividend stocks to buy according to billionaire Richard Chilton.
The company has announced a major milestone after the European Medicines Agency (EMA)’s Committee for Medicinal Products for Human Use (CHMP) recommended the approval of Onureg® (azacitidine tablets; CC-486) used as maintenance therapy in adult patients with acute myeloid leukemia (AML).
9. Broadcom Inc. (NASDAQ: AVGO)
Chilton’s Stake Value: $348,000
Percentage of Richard Chilton’s 13F Portfolio: 0.001%
Dividend Yield: 3.27%
No. of Hedge Fund Holders: 59
Broadcom Inc. is a designer, developer, and supplier of semiconductor infrastructure software solutions.
The company recently announced the launch of its Emulex Gen 7 LPe36000-series Host Bus Adapters (HBAs), the first 64G Fibre Channel HBA in the world. The release makes Broadcom the first company to launch a complete portfolio of products that support an end-to-end 64G data path. The stock ranks 9th in the list of 10 best dividend stocks to buy according to billionaire Richard Chilton.
Broadcom Inc. recently signed a partnership with Alphabet to integrate Google Cloud services with its platform and products. The partnership will allow businesses to use Broadcom solutions in domains like DevOps, security and deployment through Google Cloud.
Broadcom Inc.’s (NASDAQ: AVGO)’s total revenue in Q1 2021 increased by 14% to $6,655 million from the amount reported in Q1 2020. The company’s GAAP net income stood at $1,378 million, while Adjusted EBITDA was $3,941 million for Q1 2021. Evercore ISI upgraded the company’s stock to “Outperform” from “In Line.”
In its Q1 2021 investor letter, Del Principe O’Brien Financial Advisors highlighted a few stocks and Broadcom Inc. (NASDAQ:AVGO) is one of them. Here is what the fund said:
“We continue to be impressed with the growth of this U.S.-based technology leader. At the time of their IPO in 2009, Broadcom’s reported revenue was just around $1.5 billion. At the end of fiscal year 2020, the company’s reported revenue was nearly $24 billion – that’s 16x growth in 11 years’ time. (See chart below. Source: Broadcom Networking Overview, J.P. Morgan 19th Annual Tech/Auto Forum, January 12, 2021).
This level of growth was achieved in part by Broadcom’s penchant for acquisitions, which we have highlighted in previous letters. Besides their impressive revenue growth and wise capital allocation strategies, we like Broadcom for the wide economic moat they have created through their commitment to research and development ($5 billion in fiscal year 2020) and their extensive intellectual property portfolio, which currently includes more than 23,000 patents. According to Broadcom, 99.9% of all internet traffic crosses at least one of their chips.”
8. The Coca-Cola Company (NYSE: KO)
Chilton’s Stake Value: $6,794,000
Percentage of Richard Chilton’s 13F Portfolio: 0.18%
Dividend Yield: 3.09%
No. of Hedge Fund Holders: 62
The Coca-Cola Company is the world’s leading beverage company that specializes in the production, marketing, and sale of several flavors of nonalcoholic beverages. Recently, Bank of America rated the bonds issued by The Coca-Cola Company at Marketweight. The bank said that Coca Cola is poised for a “swift” rebound in FY21-22 EBITDA. The stock ranks 8th in the list of 10 best dividend stocks to buy according to billionaire Richard Chilton.
Like Microsoft Corporation, Amazon.com, Inc. and Alphabet Inc., Coca Cola is one of the best stocks to buy for long-term in Richard Chilton’s portfolio.
The Coca-Cola Company also reported impressive quarterly results for Q1 2021, with net revenue growing by 5% to $9.0 billion while non-GAAP revenue increased by 6% compared to Q1 2020. During the quarter, the company’s operating margin was 30.2% compared to 27.7% reported in Q1 2020.
7. Merck & Co., Inc. (NYSE: MRK)
Chilton’s Stake Value: $10,198,000
Percentage of Richard Chilton’s 13F Portfolio: 0.28%
Dividend Yield: 3.36%
No. of Hedge Fund Holders: 82
Merck & Co., Inc. is a U.S. pharmaceutical company that produces and supplies medical products worldwide. The company has experienced significant growth largely driven by growth opportunities in several niches. With this growth, the company projects low to mid-single-digit growth in revenue in 2021. The stock ranks 7th in the list of 10 best dividend stocks to buy according to billionaire Richard Chilton.
Merck & Co., Inc. has also announced another milestone following the FDA approval of its sBLA for Keytruda (pembrolizumab) as a first-line for gastric cancer treatment. The product will be used in combination with chemotherapy and Herceptin (trastuzumab) for the first-line treatment of patients with gastroesophageal junction adenocarcinoma, metastatic HER2-positive gastric, or locally advanced unresectable.
6. The First of Long Island Corporation (NASDAQ: FLIC)
Chilton’s Stake Value: $2,998,000
Percentage of Richard Chilton’s 13F Portfolio: 0.08%
Dividend Yield: 3.37%
No. of Hedge Fund Holders: 9
The First of Long Island Corporation (NASDAQ: FLIC) has reported an increase in net income from $9.1 million in Q1 2020 to $11.3 million in Q1 2021. EPS in the period increased from $0.38 in Q1 2020 to $0.47 in Q1 2021. The stock ranks 6th in the list of 10 best dividend stocks to buy according to billionaire Richard Chilton. Like Microsoft Corporation, Amazon.com, Inc. and Alphabet Inc., FLIC is one of the best stocks to buy for long-term in Richard Chilton’s portfolio.
5. Pfizer Inc. (NYSE: PFE)
Chilton’s Stake Value: $212,000
Percentage of Richard Chilton’s 13F Portfolio: 0.001%
Dividend Yield: 3.96%
No. of Hedge Fund Holders: 63
Pfizer Inc. is a global pharmaceutical company specializing in the discovery, development, production, marketing, distribution, and sale of biopharmaceutical products around the world.
The company recently announced strong results for Q1 2021, with $14.6 billion in revenue representing a whopping 42% growth from the same period in 2020. This revenue does not include the $3.5 billion sales from BNT162b2.
In anticipation of strong contribution from the solid performance of BNT162b2 as well as the strong performance of the business in general, the company has raised its guidance ranges for revenue, adjusted cost of sales, adjusted R&D expenses, and adjusted diluted EPS.
Pfizer Inc. has also requested the Medicines and Healthcare products Regulatory Agency (MHRA), the U.K.’s medical regulator, to approve its COVID-19 vaccine for use in young teenagers. The company has since submitted efficacy data for the jab that targets 12 to 15-year-olds. The vaccine is expected to be approved well before the end of July, thanks to MHRA’s fast-track review process.
4. AbbVie Inc. (NYSE: ABBV)
Chilton’s Stake Value: $798,000
Percentage of Richard Chilton’s 13F Portfolio: 0.02%
Dividend Yield: 4.53%
No. of Hedge Fund Holders: 83
AbbVie Inc. (NYSE: ABBV) is a specialist in discovering, developing, producing, and selling pharmaceuticals worldwide. In its financial results for Q1 2021, the company reported net revenues of $13.010 billion on a GAAP Basis, representing a 51.0% increase compared to a reported basis. Adjusted net revues during the quarter amounted to $13 billion.
Allergan Aesthetics, a subsidiary of AbbVie Inc., has signed an agreement to acquire Soliton and its Rapid Acoustic Pulse device called RESONICTM, which recently received clearance from the U.S. Food and Drug Administration (FDA).
RESONICTM is a non-invasive treatment for short-term improvement in the appearance of cellulite. The deal is expected to bolster the Allergan Aesthetics’ Body Contouring treatment portfolio that already has a number of products like CoolSculpting® Elite.
The Committee for Medicinal Products for Human Use (CHMP) of the EMA has adopted a positive opinion for AbbVie Inc.’s Venclyxto (venetoclax), which is used together with hypomethylating agents in the treatment of newly diagnosed acute myeloid leukemia (AML) in adult patients who cannot be subjected to intensive chemotherapy. The European Commission is set to give the final determination on Venclyxto combination therapy in the first half of 2021. AbbVie and Roche are developing Venetoclax.
3. Exxon Mobil Corporation (NYSE: XOM)
Chilton’s Stake Value: $297,000
Percentage of Richard Chilton’s 13F Portfolio: 0.001%
Dividend Yield: 5.74%
No. of Hedge Fund Holders: 63
Exxon Mobil Corporation (NYSE: XOM) is a U.S. company that deals with the exploration and production of crude oil products in the United States and worldwide. It operates through Upstream, Downstream, and Chemical segments. The stock ranks 3rd in the list of best dividend stocks to buy based on Richard Chilton’s Q1’2021 portfolio.
The Iraq government recently requested to buy 32.7% of the company’s stake in West Qurna 1, one of the largest oilfields in Iraq. The company is selling its stake in the oil fields in order to reduce the massive debt accumulated in 2020.
A consortium made up of Exxon Mobil Corporation, Royal Dutch Shell, Air Liquide, and Air Products has been granted subsidies amounting to $2.4 billion by the Dutch government to set up what could become the largest carbon capture and storage projects in the world. The group requested the subsidies to put up the project expected to capture carbon produced by refineries and factories in the Rotterdam port area. The captured CO2 will be stored in empty Dutch gas fields in the North Sea.
Exxon Mobil Corporation announced $2.7 billion, or $0.64 per share, earnings for Q1 2021 compared to a loss of $610 million reported in Q1 2020. The company’s capital and exploration expenditures during the quarter amounted to $3.1 billion, which is a drop of $4 billion from Q1 2020. The Q1 2021 results included unfavorable identified items of $31 million, or $0.01 per share, assuming dilution.
Harding Loevner, in its Q1 2021 investor letter, mentioned Exxon Mobil Corporation (NYSE: XOM). Here is what Harding Loevner has to say about Exxon Mobil Corporation in its letter:
“We felt that our remaining energy holding, ExxonMobil, with its stronger balance sheet, was in a better position to ride out the cyclical slump in oil demand and even perhaps take advantage of it by investing counter-cyclically. While ExxonMobil does plan to increase capital expenditure, we’ve been disappointed in its regrettable failure to address ongoing emission trends, which reflects poorly on management’s foresight. As a result, we sold our ExxonMobil holdings.”
2. Blackstone Mortgage Trust, Inc. (NYSE: BXMT)
Chilton’s Stake Value: $1,690,000
Percentage of Richard Chilton’s 13F Portfolio: 0.04%
Dividend Yield: 8.13%
No. of Hedge Fund Holders:
Blackstone Mortgage Trust, Inc. (NYSE: BXMT) has reported its results for Q1 2021, with CEO Stephen D. Plavin saying the results demonstrated the strong momentum the company has put in place it drives its revenue. The company closed $1.7 billion in new loans during the quarter and grew its loan portfolio by around $700 million. Plavin says the company will continue to leverage its strong balance sheet to position the company to capture the next wave of investment opportunities.
Blackstone Mortgage Trust, Inc. has completed the $3.4 billion acquisition of a best‐in‐class portfolio of lab office buildings from a Brookfield Asset Management real estate fund. Together, the buildings have a cumulative space of 2.3 million square feet.
1. Enterprise Products Partners L.P. (NYSE: EPD)
Chilton’s Stake Value: $2,119,000
Percentage of Richard Chilton’s 13F Portfolio: 0.05%
Dividend Yield: 7.78%
No. of Hedge Fund Holders: 30
Enterprise Products Partners L.P. (NYSE: EPD) specializes in the provision of midstream energy services to producers and consumers of energy products like crude oil, natural gas, natural gas liquids (NGLs), refined products, and petrochemicals.
Enterprise Products Partners L.P. has released its financial results for Q1 2021 with net income from common unitholders amounting to $1.3 billion or $0.61 per share. This is a drop from the $1.4 billion net income reported in the same period in 2020. The reduction in net income is attributed to $66 million, or $0.03 per fully diluted unit, in non-cash asset impairment charges.
You can also take a peek at 14 Best European Dividend Stocks To Buy and 15 Very High Yield Dividend Stocks Worth Checking Out.
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Best Healthcare Dividend Stocks
- 10 Extreme Dividend Stocks with Huge Upside
- 10 Blue Chip Dividend Stocks Hedge Funds Are Buying
This article is originally published at Insider Monkey.
