5 Best Dividend Stocks to Buy According to Morgan Stanley’s Quant Screen: In Retrospect

In this article, we will look at the 5 best dividend stocks to buy according to Morgan Stanley’s quant screen and how they have performed in the fourth quarter. If you want to read about similar stocks, you can check out 10 Best Dividend Stocks to Buy According to Morgan Stanley’s Quant Screen: In Retrospect.

5. Comcast Corporation (NASDAQ:CMCSA)

Dividend Yield as of December 28: 3.07%

Quarterly Performance as of December 28: 11.10%

Total Expected Return: 39%

Number of Hedge Fund Holders: 73

Comcast Corporation (NASDAQ:CMCSA) is a global media and technology company. The company is headquartered in Philadelphia, Pennsylvania, and is one of the world’s largest entertainment, media, and communications companies. As of December 28, Comcast Corporation (NASDAQ:CMCSA) has gained 11.10% in the fourth quarter of 2022 and is offering a forward dividend yield of 3.07%. Morgan Stanley analysts expect a further upside of roughly 28% from current levels, and the stock is placed high on our list of the best dividend stocks to buy according to Morgan Stanley’s quant screen.

On December 12, Morgan Stanley analyst Benjamin Swinburne maintained his Overweight rating on Comcast Corporation (NASDAQ:CMCSA). This December, Wells Fargo analyst Steven Cahall upgraded Comcast Corporation (NASDAQ:CMCSA) to Equal Weight from Underweight and raised his price target on the stock to $38 from $30.

At the close of Q3 2022, 73 hedge funds were bullish on Comcast Corporation (NASDAQ:CMCSA) and held collective stakes of $3.98 billion in the company. As of September 30, First Eagle Investment Management is the most prominent investor in Comcast Corporation (NASDAQ:CMCSA) and has disclosed a position worth $928.18 million.

Here is what Diamond Hill Capital had to say about Comcast Corporation (NASDAQ:CMCSA) in its third-quarter 2022 investor letter:

“Other bottom contributors included our long positions in Comcast Corporation (CMCSA) and Wolverine World Wide. Cable company Comcast reported underwhelming quarterly results showing disappointing broadband subscriber growth amid increased competition from fixed wireless, though Comcast’s churn remains near all-time lows. Footwear and apparel company Wolverine World Wide is coping with cost pressures and greater-than-anticipated promotional activity amid a more uncertain macro environment. In addition, consumer spending concerns weighed on investor sentiment toward companies selling more discretionary goods.”

4. AbbVie Inc. (NYSE:ABBV)

Dividend Yield as of December 28: 3.65%

Quarterly Performance as of December 28: 12.19%

Total Expected Return: 42%

Number of Hedge Fund Holders: 80

AbbVie Inc. (NYSE:ABBV) is a global leader in the healthcare and biotech space. The company develops and markets innovative medicines for patients with serious diseases. At the end of Q3 2022, 80 hedge funds were bullish on AbbVie Inc. (NYSE:ABBV) and disclosed positions worth $1.86 billion in the company.

On October 28, AbbVie Inc. (NYSE:ABBV) declared a quarterly cash dividend of $1.48 per share, up 5% from the company’s prior dividend of $1.41. The dividend is payable on February 15 to investors of record on January 3. As of December 28, AbbVie Inc. (NYSE:ABBV) is offering a forward dividend yield of 3.65% and has gained 12.19% since September 30, 2022. Morgan Stanley’s quant screen suggests a further upside of roughly 40% over the next couple of months, and the stock is placed fourth on our list of the best dividend stocks to buy according to Morgan Stanley.

This November, Credit Suisse analyst Trung Huynh started coverage of AbbVie Inc. (NYSE:ABBV) with an Outperform rating and a $170 price target.

As of September 30, Arrowstreet Capital is the largest investor in AbbVie Inc. (NYSE:ABBV) and has a position worth $431.6 million.

Here is what Baron Funds had to say about AbbVie Inc. (NYSE:ABBV) in its third-quarter 2022 investor letter:

“AbbVie Inc. (NYSE:ABBV) is a drug developer best known for Humira, an immunosuppressant that is the best selling drug of all time. Given outsized key product risk (patent cliff and generic launches beginning in 2023), AbbVie has broadened its pipeline, highlighted by its Allergan acquisition. Shares fell on results that missed consensus and indications that legacy franchises were outperforming newer product launches, calling into question AbbVie’s long-term strategy. With promising assets in the pipeline and its robust cash flow profile, we believe AbbVie will grow well into the future.”

3. Diamondback Energy, Inc. (NASDAQ:FANG)

Dividend Yield as of December 28: 6.51%

Quarterly Performance as of December 28: 13.65%

Total Expected Return: 36%

Number of Hedge Fund Holders: 55

Diamondback Energy, Inc. (NASDAQ:FANG) is an independent oil and natural gas company engaged in the acquisition, development, exploration and production of oil and natural gas properties in the Permian Basin in West Texas and New Mexico. As of September 30, Yacktman Asset Management is the top shareholder in Diamondback Energy, Inc. (NASDAQ:FANG) and has a position worth $152 million in the company.

On November 7, Diamondback Energy, Inc. (NASDAQ:FANG) posted earnings for the fiscal third quarter of 2022 in which the company outperformed both EPS and revenue consensus. The company reported an EPS of $6.48 and beat Wall Street estimates by $0.11. The company’s revenue for the quarter amounted to $2.44 billion, up 27.59% year over year and ahead of expectations by $13.55 million.

As of December 28, Diamondback Energy, Inc. (NASDAQ:FANG) has gained 13.65% in the fourth quarter of 2022 and is offering a dividend yield of 6.51%. Morgan Stanley analysts see a further potential upside of roughly 20%. Diamondback Energy, Inc. (NASDAQ:FANG) is one of the best dividend stock picks of Morgan Stanley’s quant screen.

At the close of the third quarter of 2022, 55 hedge funds were long Diamondback Energy, Inc. (NASDAQ:FANG) and held collective stakes of $910.9 million in the company.

2. Philip Morris International Inc. (NYSE:PM)

Dividend Yield as of December 28: 4.95%

Quarterly Performance as of December 28: 15.56%

Total Expected Return: 21%

Number of Hedge Fund Holders: 63

Philip Morris International Inc. (NYSE:PM) is a leading multinational tobacco company, headquartered in New York City, USA. On December 8, Philip Morris International Inc. (NYSE:PM) declared a quarterly cash dividend of $1.27 per common share. The dividend is payable on January 11, to stockholders of record at the close of business on December 22. The stock is offering a forward dividend yield of 4.95%, as of December 28, and has returned 15.56% to investors in the fourth quarter. Morgan Stanley analysts expect a further upside of roughly 5% from current levels.

On November 15, Argus analyst David Coleman upgraded Philip Morris International Inc. (NYSE:PM) to Buy from Hold and reiterated his $110 price target.

At the end of the third quarter of 2022, 63 hedge funds held stakes in Philip Morris International Inc. (NYSE:PM). The total value of these stakes amounted to $4.68 billion. As of September 30, GQG Partners is the top investor in the company and has disclosed a position worth $1.44 billion.

Here is what investment management firm, Coho Partners had to say about Philip Morris International Inc. (NYSE:PM) in its third-quarter 2022 investor letter:

“Coho is not immune to the earnings pressure exerted by a strong USD, although the portfolio on the whole has modestly less foreign revenue exposure relative to the S&P 500 Index. The two most impacted Coho stocks includes Philip Morris International, which essentially derives all of its revenues outside the U.S. Harkening back to Table 1, the decline in Philip Morris earnings for 2022 versus the reported earnings in 2021 is entirely related to the strengthening dollar. On a constant currency basis, Philip Morris’ earnings in 2022 would be up mid to high single digits.”

1. Air Products & Chemicals, Inc. (NYSE:APD)

Dividend Yield as of December 28: 2.09%

Quarterly Performance as of December 28: 31.78%

Total Expected Return: 30%

Number of Hedge Fund Holders: 43

Air Products & Chemicals, Inc. (NYSE:APD) is a global industrial gas and chemicals company, headquartered in Allentown, Pennsylvania. Founded in 1940, Air Products produces, sells, and distributes industrial gases, such as oxygen, nitrogen, argon, and carbon dioxide, as well as specialty gases, chemicals, and equipment. Air Products is a major supplier of liquefied natural gas (LNG) technology and cryogenic equipment for air separation and storage. As of December 28, Air Products & Chemicals, Inc. (NYSE:APD) has gained 31.78% since September 30, 2022, and has beat Morgan Stanley’s total expected return of 30%. The stock is one of the best dividend stocks to buy according to Morgan Stanley’s quant screen.

On November 22, Air Products & Chemicals, Inc. (NYSE:APD) declared a quarterly dividend of $1.62 per share of common stock. The dividend is payable on February 13, to shareholders of record at the close of business on January 3. As of December 28, the stock is offering a forward dividend yield of 2.09%.

This December, Deutsche Bank analyst David Begleiter raised his price target on Air Products & Chemicals, Inc. (NYSE:APD) to $340 from $292 and maintained a Buy rating on the shares.

At the end of Q3 2022, 43 hedge funds were bullish on Air Products & Chemicals, Inc. (NYSE:APD) and held stakes worth $394.2 million in the company. Of those, Adage Capital Management was the top shareholder in the company and disclosed a position worth $52.5 million.

Here is what Matrix Asset Advisors had to say about Air Products and Chemicals, Inc. (NYSE:APD) in its third-quarter 2022 investor letter:

“During the quarter, we started a new position in Air Products and Chemicals, Inc. (NYSE:APD) for accounts with cash to invest. Air Products & Chemicals is a leading global industrial gas company with very stable returns. The company provides industrial gas in bulk liquid and compressed gas forms as well as via onsite dedicated facilities. Because many of its contracts are long-term, the business is less cyclical than many industrial companies while benefiting during economic upswings. Air Products is a leader in hydrogen fueling systems and infrastructure, and the company sees great potential to extend its leadership in the years ahead. APD consistently returns capital to its shareholders through share repurchases and by steadily increasing its dividend. Its current annual dividend of $6.48 per share provides a 2.8% yield on September 30.”

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