In this article, we discuss 5 best dividend stocks to buy according to Kenneth A. Moffet’s Hourglass Capital. If you want to read our detailed analysis of the hedge fund’s past performance and its investment strategy, go directly to read 10 Best Dividend Stocks to Buy According to Kenneth A. Moffet’s Hourglass Capital.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 76
Dividend Yield as of June 2: 3.86%
Hourglass Capital’s Stake Value: $14,326,000
An American biopharmaceutical company, AbbVie Inc. (NYSE:ABBV) was the largest holding of Hourglass Capital in the first quarter of 2022. The hedge fund owned 88,371 ABBV shares, after increasing its position in the company by 2% during the quarter. The shares are valued at over $14.3 million, representing 4.47% of Kennet A. Moffet’s portfolio.
In February, AbbVie Inc. (NYSE:ABBV) declared a quarterly dividend of $1.41 per share. The company raised its dividend in October 2021 by 9%. The company has raised its dividend for consecutive 50 years, including its years as Abbott’s subsidiary before 2013. Moreover, since 2013, AbbVie Inc. (NYSE:ABBV) has increased its dividend by 250%. The stock’s dividend yield came to be recorded at 3.86%.
In its May investors’ note, Wells Fargo mentioned that from 2023 to 2028, the firm sees the sales of AbbVie Inc. (NYSE:ABBV) growing at a CAGR of 5%-11%, versus a consensus of 2%-4%. In view of this, the firm lifted its price target on the stock to $200 while maintaining an Overweight rating on the shares.
At the end of Q1 2022, 76 hedge funds tracked by Insider Monkey reported owning a $3.66 billion worth of collective stake in AbbVie Inc. (NYSE:ABBV). In comparison, 82 hedge funds held positions in the company in the previous quarter, with stakes valued at over $3.74 billion. Arrowstreet Capital was the largest shareholder of the company, holding stakes worth over $754 million.
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”