In this article, we discuss the 5 best dividend stocks to buy according to Traci Lerner’s Chescapmanager. If you want to read our detailed analysis of Lerner’s history and hedge fund performance, go directly to the 10 Best Dividend Stocks to Buy According to Traci Lerner’s Chescapmanager.
5. The TJX Companies, Inc. (NYSE: TJX)
Lerner’s Stake Value: $9,261,000
Percentage of Traci Lerner’s 13F Portfolio: 0.98%
Dividend Yield: 1.52%
Number of Hedge Fund Holders: 63
The TJX Companies, Inc. (NYSE: TJX), collectively with its subsidiaries runs as an off-price clothing and home fashions dealer. The company was founded in 1956 and stands fifth on the list of 10 best dividend stocks to buy according to Traci Lerner’s Chescapmanager. TJX shares have gained 31.88% over the last 12 months.
On May 27, The TJX Companies, Inc. (NYSE: TJX) declared a quarterly dividend of $0.26, in line with the previous. On May 19, the company posted earnings per share for the first quarter of 2021. The company declared earnings of $0.44, beating the market predictions by $0.13. The revenue for the first quarter of 2021 was $10.09 billion, up 128.8% YoY, beating the estimates by $1.48 billion.
The stock accounts for about 0.98% of Chescapmanager LLC portfolio, as the hedge fund owns a $9.26 million stake in the company. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Alkeon Capital Management is the biggest stakeholder of the company with 6.11 million shares, worth $404.36 million.
“We’re pretty happy with the current portfolio and so were not very active during the quarter. Our only consequential decision in the first quarter was to exit the off-price retailer The TJX Companies in January. My prior firm owned TJX for most of the past 20 years and enjoyed appreciation on the order of 20 times the original purchase price.
TJX is a great company, but the growth rate has slowed in recent years and the operating margin has been under pressure, mainly from rising wages for store workers. When the pandemic hit, I bought the stock for GCAM in the belief that if the US fell into a prolonged recession, TJX would be a winner because of its extreme value position.
The US didn’t fall into a prolonged recession. Rather, many consumers are flush with cash thanks to government relief programs. But brick-and-mortar stores are losing out to online competitors for reasons of safety and convenience. TJX has fared much better than most of its competitors during this time and should continue to do so, thanks to its model of buying inventory close to need and reacting to what is happening in the marketplace rather than trying to create hot product. But the stock rose about 50% in the few months we owned it and that increase seemed to price in a complete recovery and more. We sold in early January.”