5 Dividend Stocks Billionaire Mario Gabelli Loves

3. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 84

Dividend Yield as of May 20: 2.48%

GAMCO Investors has maintained a position in Bank of America Corporation (NYSE:BAC) for roughly over a decade, since Q3 2012. As of March 31, Mario Gabelli’s hedge fund owns over 1.18 million shares of Bank of America Corporation (NYSE:BAC) which amounts to a stake of $48.96 million.

Gamco Investors is not the only hedge fund bullish on Bank of America Corporation (NYSE:BAC). Insider Monkey found 84 hedge funds bullish on the company at the end of Q4 2021. The total stakes of these funds amounted to $47.87 billion, up from $46.48 billion in the prior quarter with 72 positions. The hedge fund sentiment for the stock is positive.

Miller Value Partners mentioned Bank of America Corporation (NYSE:BAC) in its “Opportunity Equity” first quarter 2022 investor letter. Here is what they said:

“There are many times when volatility and beta give false signals. Banks outperformed in the post-tech bubble bear market of the early 2000s. At the market peak prior to the financial crisis (when risk was the highest in those names!), Bank of America (NYSE:BAC) had a 0.9x beta (based on the trailing 5 years) suggesting its “risk” was below the market’s. Wrong! It massively underperformed in the financial crisis. Realized beta over the 5 years from the pre-crisis’ 2006 peak measured 2.3x.

A much better indicator of actual risk, both before and after the financial crisis, was the quality of the balance sheet and risk-taking appetite. Beta is backwards looking and non-stationary. Relying on it underestimated risk going into the financial crisis and overestimated coming out of it (its beta has continued to fall over the past decade).

We care greatly about risk. We spend a significant amount of time thinking about the risks to our investments. We measure risk as permanent impairment of capital, which means the prices and values don’t bounce back. Business fundamentals determine risk.”