In this article, we discuss the 10 dividend stocks in Adage Capital’s Portfolio.
Adage Capital Management is a Boston-based asset management firm co-founded by Phill Gross and Robert Atchinson. The fund was founded in the third quarter of 2001 and has nearly $51 billion under its management. Phill Gross and Robert Atchinson have worked for Harvard Management Company for several years.
Some of the top dividend stocks in the fund’s investment portfolio at the end of the third quarter of 2021 included Exxon Mobil Corporation (NYSE:XOM), The Coca-Cola Company (NYSE:KO), Pfizer Inc. (NYSE:PFE), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT).
Phillip Gross of Adage Capital
Our Methodology
These were picked from the investment portfolio of Adage Capital Management at the end of the September quarter.
Dividend Stocks in Adage Capital’s Portfolio
10. The Procter & Gamble Company (NYSE:PG)
Dividend Yield: 2.14%
Adage Capital Management Stake Value: $363,938,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.71%
Number of Hedge Fund Holders: 69
The Procter & Gamble Company (NYSE:PG) sells branded consumer packaged goods under the brands Gillette, Tide, Pantene, Oral-B, Mr. Clean, and Vicks to name a few. As one of the largest consumer goods providers in the world, The Procter & Gamble Company (NYSE:PG) markets its products in over 180 countries.
As of the end of September 2021, Adage Capital Management owned 2.6 million shares of The Procter & Gamble Company (NYSE:PG) worth around $364 million. Moreover, 69 hedge funds in the database of Insider Monkey held stakes worth $6.41 billion in The Procter & Gamble Company (NYSE:PG) at the end of Q3 2021, compared to 68 the preceding quarter worth $6.93 billion.
Just like Exxon Mobil Corporation (NYSE:XOM), The Coca-Cola Company (NYSE:KO) and Pfizer Inc. (NYSE:PFE), The Procter & Gamble Company (NYSE:PG) is one of the notable dividend stocks in Adage Capital’s portfolio in Q3 2021.
9. Cisco Systems, Inc. (NASDAQ:CSCO)
Dividend Yield: 2.34%
Adage Capital Management Stake Value: $245,410,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.48%
Number of Hedge Fund Holders: 63
Cisco Systems, Inc. (NASDAQ:CSCO) is a technology company that provides networking, security, mobility and wireless, and Internet of Things (IoT) products as well as software support, data center, and cloud computing solutions. Cisco Systems, Inc. (NASDAQ:CSCO) recently acquired American software provider Epsagon Ltd. in October and German enterprise software firm Replex in November.
According to the Q3 filings tracked by Insider Monkey, Adage Capital Management owned 4.5 million shares of Cisco Systems, Inc. (NASDAQ:CSCO) worth $245 million, representing 0.48% of the fund’s total holdings.
Washington-based investment management firm Fisher Asset Management is the biggest shareholder of the California-based company with 22.8 million shares worth $1.24 billion as of the end of the September quarter.
In its Q3 2021 investor letter, ClearBridge Investments mentioned Cisco Systems, Inc. (NASDAQ:CSCO) and discussed its stance on the firm. Here is what the fund said:
“We reinvested a portion of the proceeds into existing holding Cisco Systems, which also has highly valuable technology and an improving secular growth story with its leading position in core networking hardware, as well as in its growing software and services business. Cisco has refocused on winning share in the large and growing hyperscale market and has been investing aggressively in R&D to support growth. We believe Cisco has found new legs after previously ceding some growth opportunities in the cloud while maintaining its strong presence in the carrier and enterprise markets. Cisco boasts a strong balance sheet and accelerating multiyear growth while trading at a modest multiple of earnings.”
8. JPMorgan Chase & Co. (NYSE:JPM)
Dividend Yield: 2.47%
Adage Capital Management Stake Value: $489,853,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.96%
Number of Hedge Fund Holders: 101
During the third quarter of 2021, Adage Capital Management increased its stake in JPMorgan Chase & Co. (NYSE:JPM) by 2%, bringing the fund’s total holdings to nearly $490 million. On the other hand, JPMorgan Chase & Co. (NYSE:JPM) shares rose 2.1% on January 3 as the U.S. Treasury yields ticked up on the first trading day of 2022.
At the end of the third quarter of 2021, 101 hedge funds in the database of Insider Monkey held stakes worth $5.64 billion in JPMorgan Chase & Co. (NYSE:JPM), compared to 108 in the preceding quarter worth $4.93 billion.
On January 5, investment firm Seaport Global kept a Buy rating on JPMorgan Chase & Co. (NYSE:JPM) and increased its price target for the stock to $191.
7. Johnson & Johnson (NYSE:JNJ)
Dividend Yield: 2.47%
Adage Capital Management Stake Value: $428,550,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.84%
Number of Hedge Fund Holders: 88
Pharmaceutical giant Johnson & Johnson (NYSE:JNJ) is one of the dividend stocks in Adage Capital Management’s portfolio in Q3 2021. The fund upped its stake in the New Jersey-based drugmaker by 25%. As of the end of September, Adage Capital owned 2.65 million shares of Johnson & Johnson (NYSE:JNJ) worth $429 million.
In December, Credit Suisse analyst Matt Miksic reiterated an Outperform rating on Johnson & Johnson (NYSE:JNJ) with a price target of $200.
At the end of the September quarter, 88 hedge funds in the database of Insider Monkey held stakes worth $6.87 billion in Johnson & Johnson (NYSE:JNJ).
Some of the dividend stocks investors and market analysts are following in 2022 include Johnson & Johnson (NYSE:JNJ), Exxon Mobil Corporation (NYSE:XOM), The Coca-Cola Company (NYSE:KO) and Pfizer Inc. (NYSE:PFE).
Here is what Vltava Fund has to say about JPMorgan Chase & Co. in its Q3 2021 investor letter:
“While all the previous names could be categorized as founder, continuing, or key shareholders, these last two names fall into the category of hired professional managers. This is actually the most numerous category among the bosses of large companies, but even among them there exist a number of individuals with exceptional long-term track records. In our view, these include also Jamie Dimon and Herman Gref.
We consider JP Morgan to be the strongest, largest, and most profitable bank in the world. It has not always been so, and the fact that it is what it is today can be attributed especially to its CEO Jamie Dimon. Dimon has spent his entire career in banking. He came to JP Morgan in a roundabout way in 2004 after the bank bought Bank One, of which he was CEO at the time. Since early 2006, Dimon has been CEO of the entire JP Morgan.
The quality and strength of JP Morgan under his leadership became fully apparent for the first time in 2008. Not only did JP Morgan help to stabilize the market by taking over the failing Bear Stearns in the spring of that year, but it was the only major US bank that did not require government assistance throughout the Great Financial Crisis and that was highly profitable even in the difficult year of 2008. Today, JP Morgan is even bigger, even more profitable, and even stronger than ever before. Many investors view banks with disdain, but a good bank with good management can be a very good long-term investment. From the time of its merger with Bank One in 2004 through the end of 2020, JP Morgan’s stock has outperformed even the S&P 500 index. The bank has earned a total net profit of USD 330 billion during this period, of which USD 232 billion has been paid out to shareholders in dividends and in share buybacks. I can recommend two books about Jamie Dimon: The House of Dimon and Last Man Standing.”
6. Intel Corporation (NASDAQ:INTC)
Dividend Yield: 2.61%
Adage Capital Management Stake Value: $226,018,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.44%
Number of Hedge Fund Holders: 66
Microchip manufacturer Intel Corporation (NASDAQ:INTC) was recently upgraded by Northland analyst Gus Richard to an Outperform rating from Market Perform. Richard set a $62 price target for the stock.
Intel Corporation (NASDAQ:INTC), one of the world’s largest semiconductor producers, announced a $20 billion standalone foundry business unit in 2021 and had Amazon.com, Inc. (NASDAQ:AMZN) as its first customer.
During the third quarter of 2021, Adage Capital boosted its stake in Intel Corporation (NASDAQ:INTC) by 1%, bringing its total shares to 4.24 million worth $226 million. Among the hedge funds being tracked by Insider Monkey, Washington-based firm First Eagle Investment Management is a leading shareholder in Intel Corporation (NASDAQ:INTC) with over 32 million shares worth more than $1.73 billion.
Andaz Private Investments, in its Q3 2021 investor letter, mentioned Intel Corporation (NASDAQ: INTC) and discussed its stance on the firm. Here is what the fund said:
“Intel (INTC) is trading on a high single digit earnings multiple and is essentially: 1) an oligopolistic foundry set to benefit from large government incentives; and 2) a semiconductor business that is returning to competitiveness after years of being a laggard.”
5. Pfizer Inc. (NYSE:PFE)
Dividend Yield: 2.82%
Adage Capital Management Stake Value: $247,699,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.48%
Number of Hedge Fund Holders: 74
COVID-19 vaccine maker Pfizer Inc. (NYSE:PFE) has been gaining the attention of investors in recent months. On January 3, the New York-based pharmaceutical company received FDA approval for its COVID-19 booster shots for teenagers aged 12 to 15. The CDC also backed Pfizer Inc.’s (NYSE:PFE) booster shot.
Adage Capital Management re-initiated its position in Pfizer Inc. (NYSE:PFE) in the third quarter of 2021 and bought 5.76 million shares of the company worth $248 million. At the end of the third quarter of 2021, 74 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in Pfizer Inc. (NYSE:PFE), up from 67 in the previous quarter worth $2.36 billion.
On January 5, BofA analyst Geoff Meacham upgraded his rating on Pfizer Inc. (NYSE:PFE) to Buy from Neutral and expressed his bullishness on the drugmaker’s COVID-19 pill, Paxlovid. Meacham increased his price target on the stock to $70 from $59.
Saturna Capital, in its Q3 2021 investor letter, mentioned Pfizer Inc. (NYSE:PFE) and discussed its stance on the firm. Here is what the fund said:
“The Fund’s strongest performer during the quarter was pharmaceutical manufacturer Pfizer. The company submitted trial data to the FDA for use of its COVID-19 vaccine for younger children, and it is widely expected that the FDA will approve it. Health authorities also began recommending booster shots of the Pfizer vaccine for select populations, further increasing demand for vaccinations.”
4. The Coca-Cola Company (NYSE:KO)
Dividend Yield: 2.83%
Adage Capital Management Stake Value: $234,393,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.46%
Number of Hedge Fund Holders: 61
Dividend king The Coca-Cola Company (NYSE:KO) is among the dividend-paying stocks in Adage Capital’s portfolio in Q3 2021. Between June and September, the fund increased its stake in the Atlanta-based beverage company by 6%. The Coca-Cola Company (NYSE:KO) accounts for 0.46% of the hedge fund’s total holdings.
Laurent Grandet of Guggenheim Securities is bullish on Coca-Cola Company (NYSE:KO), noting that the beverage company is transitioning into 2022 with a rebounding business. One of the positive insights Grandet shared is how consumers are crowding restaurants faster than expected during the pandemic recovery. The analyst increased his price target for The Coca-Cola Company (NYSE:KO) to $66 from $61.
Berkshire Hathaway is The Coca-Cola Company’s (NYSE:KO) largest shareholder, owning 400 million shares of the company worth $21 billion as of the end of the third quarter of 2021. Overall, 61 funds of the 867 elite funds tracked by Insider Monkey reported owning stakes in The Coca-Cola Company (NYSE:KO) at the end of September 2021.
3. Amgen Inc. (NASDAQ:AMGN)
Dividend Yield: 3.42%
Adage Capital Management Stake Value: $35,988,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 52
Biotech firm Amgen Inc. (NASDAQ:AMGN) grew its revenue in the third quarter of 2021 by 4% to $6.7 billion. Strong sales from the drugmaker’s two osteoporosis medications, Prolia and Evenity, as well as its psoriasis drug, Otezla, aided the company’s sales growth. The three medications generated $1.6 billion in revenue in the third quarter.
At the end of the third quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $1.45 billion in Amgen Inc. (NASDAQ:AMGN), compared to 53 in the preceding quarter worth $1.65 billion.
Here is what ClearBridge Investments has to say about Amgen Inc. (NASDAQ:AMGN) in its Q3 2021 investor letter:
“In health care, Amgen, a biotechnology company, has endured several pipeline setbacks recently, including a slow transition of its Lumakras treatment into first-line lung cancer, a slower than expected development of its treatment for myeloma as well as the company’s asthma treatment Tezepelumab missing its primary endpoint in a Phase III study. We remain positive on the stock, with Amgen’s investments in biosimilars and its pipeline part of our long-term thesis.”
2. International Paper Company (NYSE:IP)
Dividend Yield: 3.95%
Adage Capital Management Stake Value: $23,067,000
Percentage of Adage Capital Management’s 13F Portfolio: 0.04%
Number of Hedge Fund Holders: 30
Another dividend stock in Adage Capital Management’s portfolio is the paper and packaging company International Paper Company (NYSE:IP). During the third quarter of 2021, Adage Capital boosted its stake in the company by 940% bringing its total holdings to 412,492 shares worth $23 million.
The Tennessee packaging company sells industrial packaging, cellulose fibers, and printing paper products internationally. In the third quarter of 2021, International Paper Company (NYSE:IP) had a revenue of $5.71 billion.
International Paper Company (NYSE:IP) was given a Hold rating by Deutsche Bank analyst Kyle White in December, with a price target of $47.
At the end of the third quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $263 million in International Paper Company (NYSE:IP), compared to 31 in the preceding quarter worth $210 million.
1. Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield: 5.54%
Adage Capital Management Stake Value: $512,123,000
Percentage of Adage Capital Management’s 13F Portfolio: 1%
Number of Hedge Fund Holders: 64
Between June and September, the hedge fund boosted its stake in the oil and gas company by 34%. With a stake of 8.7 million shares worth $512 million, Exxon Mobil Corporation (NYSE:XOM) represents 1% of Adage Capital’s portfolio.
Exxon Mobil Corporation (NYSE:XOM) was recently upgraded to Hold from Sell by Truist analyst Neal Dingmann, who is more optimistic in Exxon Mobil’s shareholder return strategy while concurrently decreasing debt.
Here is what Goehring & Rozencwajg Associates has to say about Exxon Mobil Corporation in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects.
According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since the production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
You can also take a look at the 10 Best Money-Making Stocks to Buy Now and 10 Real Estate Dividend Stocks with High Yields.
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Disclosure. None. 10 Dividend Stocks in Adage Capital’s Portfolio is originally published on Insider Monkey.
