Below we present the list of 5 Best November Dividend Stocks To Buy. For our methodology and a more comprehensive list please see the 10 Best November Dividend Stocks To Buy.
5. Citizens Financial Group Inc (NYSE:CFG)
Number of Hedge Fund Shareholders: 43
November 16 Dividend Payout: $0.42
Despite its dividend growth stalling in 2021, Citizens Financial Group Inc (NYSE:CFG) has boosted its dividend at a 22.4% CAGR over the last five years, raising it by 350% since 2016. That’s pushed the stock’s yield up to a strong 4.1%, which is still comfortably supported by a 33% payout ratio.
Higher interest rates helped Citizens Financial Group Inc (NYSE:CFG) grow its net interest income and net interest margin during Q3 as the company beat revenue and EPS estimates. Its $2.18 billion in revenue beat estimates by $50 million, while its underlying EPS of $1.30 topped consensus by $0.08. Bank stocks have generally performed poorly this year over fears of how they’ll perform during a recession, but as this isn’t a bank-driven recession per se as it largely was in 2008-2009, those fears may be overblown.
Hedge fund ownership of Citizens Financial Group Inc (NYSE:CFG) has risen for three straight quarters, hitting its highest level in two years during Q2. Nonetheless, smart money ownership remains well below 2015 levels. Ken Griffin’s Citadel Investment Group made a major addition to its CFG holding during Q2, ending the quarter with 2.28 million shares.
4. CF Industries Holdings, Inc. (NYSE:CF)
Number of Hedge Fund Shareholders: 52
November 30 Dividend Payout: $0.40
CF Industries Holdings, Inc. (NYSE:CF)’s dividend doesn’t jump off the page, boasting just a 1.51% yield and a 5-year CAGR of just 3.13%. But after remaining flat for five years, the ammonia producer was able to boost its dividend by 33% this year thanks to enjoying its most profitable year ever in 2021. Thanks to soaring ammonia prices, CF Industries’ average product price jumped by 74% last year, which pushed its free cash flow to $2.17 billion, nearly triple what it was a year earlier. With just a 9% payout ratio and strong demand for its products, the next few years could be good ones for CF’s dividend.
Hedge fund ownership of CF Industries Holdings, Inc. (NYSE:CF) jumped by 34% between the third quarter of 2021 and the first quarter of 2022, hitting an all-time high. However, there was a big smart money sell off of the stock during Q2, with a 21% net decline in the number of funds long CF. Crispin Odey’s Odey Asset Management Group and Jonathan Dawson’s Southport Management were among the funds selling off CF Industries during Q2.
Chartwell Investment Partners also sold off its CF Industries Holdings, Inc. (NYSE:CF), fearing that potential capacity additions would drag down nitrogen pricing, as revealed in the fund’s Q2 2022 investor letter:
“We sold the full position in fertilizer company CF Industries, which also had a 20%+ YTD return (through 6/30), as we had concerns that the company would announce capacity additions, which would negatively impact nitrogen pricing.”
3. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Shareholders: 55
November 25 Dividend Payout: $0.53
Thanks to a 14.4% CAGR over the past five years, Starbucks Corporation (NASDAQ:SBUX)’s dividend is becoming one to watch for investors, with a yield that now stands at 2.43%. Its dividend growth has slowed somewhat over the past few years as the company’s payout ratio pushes 62%, but Starbucks’ 11-year run of dividend growth shouldn’t be in jeopardy any time soon.
The company expects its Reinvention plan, which aims to invest $450 million in existing stores to improve their efficiency and better tailor them to their existing markets, to help grow non-GAAP EPS growth by as much as 20% in the coming years.
Hedge fund ownership of Starbucks Corporation (NASDAQ:SBUX) has trended down over the past two years after peaking during the first quarter of 2020, just as the pandemic was hitting. There’s been a 22% drop in the number of smart money managers long SBUX since then. Ray Dalio’s Bridgewater Associates has added to its SBUX position every quarter since Q3 2020 and owned 3.24 million shares as of June 30.
RiverPark Wedgewood Fund exited its Starbucks Corporation (NASDAQ:SBUX) position in Q2 and laid out some of the challenges the company has faced since the pandemic hit in its Q2 2022 investor letter:
“We exited our position in Starbucks during the second quarter. We do not mind admitting that there was a heated internal debate over this position, as there were several conflicting issues to weigh in our decision. Before the pandemic, we had been quite happy with the Company’s execution and the stock’s performance, and we were likewise happy with strategic decisions made during and immediately after the initial pandemic-related lockdowns in 2020, as we have written previously.
Despite our appreciation for the Company’s execution during this period, it was dealing with some concerning issues. First, as a business reliant upon stores being open, the Company faced continuing risks from rolling pandemic-related lockdowns, particularly in China, which is the Company’s second largest and fastest-growing market. A second and related issue was employee illness; even as stores were open, various pandemic waves (Omicron, for example) caused many employees to miss shifts, making it very difficult and expensive for Starbucks to keep its stores staffed properly…”
2. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Shareholders: 58
November 25 Dividend Payout: $0.22
The Charles Schwab Corporation (NYSE:SCHW)’s dividend is another one that’s growing fast, rising at a CAGR of 20.9% over the last five years. While its yield of 1.1% doesn’t pop off the page, the company’s 22% payout ratio indicates its dividend could be grown at a sustained pace in the years to come.
As with Citizens Financial, growing net interest income was also a big boon for Charles Schwab during Q2, as the company’s revenue rose by 13% year-over-year. The financial services company expects to perform even better in Q3, driving revenue to as much as 19% year-over-year.
The Charles Schwab Corporation (NYSE:SCHW) is an under-the-radar stock that hedge funds love, as it ranked as their 44th most popular stock at the end of Q1. Ownership of the stock did slip by 11% during Q2, but many of the company’s biggest bulls added to their positions during the quarter, including David Blood and Al Gore’s Generation Investment Management and John Armitage’s Egerton Capital Limited.
The RiverPark Large Growth Fund was impressed with The Charles Schwab Corporation (NYSE:SCHW)’s Q2 performance, as it discussed in its Q3 2022 investor letter:
“SCHW reported solid 2Q business metrics in July, with revenue up 13% year over year, and net income up 42% year over year. Schwab and TD Ameritrade (which Schwab acquired in October 2020) have been the leading share gainers in the discount brokerage industry over the last decade, with both generating substantial organic asset growth while also growing operating margins and remaining amongst the price leaders on all products. With these two businesses now combined, revenue and expense synergies should accelerate in 2023, and we believe the company will be in an even stronger position to gather assets and drive long-term margins and free cash flow in the years to come. Moreover, the combination of steadily rising short-term rates (which should benefit net interest income), plus acquisition synergies from the AMTD deal, gives us confidence that SCHW is poised to generate continued double-digit earnings growth for the foreseeable future.”
1. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Shareholders: 82
November 23 Dividend Payout: $0.51
Topping the list of best dividend stocks to buy in November is another investment bank, Citigroup Inc. (NYSE:C). Citigroup has one of the most intriguing dividends on the market right now, with a yield that has reached 4.42% coupled with an outstanding five-year CAGR of 20.59%. Should that growth rate persist, the stock’s yield could be pushing 7% within a couple of years barring a subsequent equivalent rise in the stock price (which of course would also be fine for shareholders).
Citigroup’s transformation plan under new CEO Jane Fraser is well underway, with as many as 10,000 employees working on it. The company has sold or is in the process of several of its international consumer banking units, with the intention of focusing on its wealth management, payments, and investment banking operations. The company expects to be able to deliver a return of tangible equity of between 11% and 12% in the years to come, compared to an 8.2% mark in Q3 of this year.
Citigroup Inc. (NYSE:C) was the 29th most popular stock among hedge funds during Q2, though ownership of the investment banking giant remains well below historical levels. Warren Buffett maintained the largest position in C during Q2, owning a sizable 55.2 million shares worth $2.54 billion at the end of the quarter.
The Diamond Hill Long-Short Fund shared its thoughts on Citigroup Inc. (NYSE:C)’s Q1 share price drop (they fell by 16% during the quarter) in its Q1 2022 investor letter:
“Shares of Citigroup declined in the quarter as investors became increasingly negative on capital markets activity. The company is also continuing to divest certain consumer banking geographies which may be dilutive to earnings in the near term.”
For more of the latest companies worth considering for your portfolio, check out the 15 Biggest Indian Companies by Market Cap and 15 Biggest Internet Companies in the World.
Disclosure: None.
