In this article, we discuss 10 dividend stocks to buy according to billionaire Louis Bacon.
Louis Bacon founded Moore Global Investments in 1989 and is currently serving as the chairman and principal investment manager of the firm. The investment management firm mainly invests in private equity markets and global financial markets. As of August 2022, Bacon has a net worth of over $1.6 billion.
Bacon is one of the most prominent traders on Wall Street and specializes in macro trading. His investment strategy involves betting on currencies, bonds, and commodities while analyzing global political and economic conditions. He made large profits during the crash in Japanese stocks in 1990 and Black Wednesday in 1992 when the UK Government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism.
In 2019, Bacon privatized three of his multi-manager flagship funds, returning assets to outside investors. The step was taken due to intense competition for trading talent and the negative results of these funds over the years. However, these funds returned a total of over $19 billion in profits to its shareholders. Returning external money lifted the returns of the fund, which ended 2020 with a 70% return, according to a report by the Financial Times.
As of the end of Q1 2022, Moore Global Investments’ 13F portfolio was valued at nearly $4 billion, down from $5 billion in the previous quarter. The hedge fund invested in a wide range of sectors during the quarter, with technology making up the major portion of the portfolio. Some of the fund’s major holdings are Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN). In this article, we will discuss dividend stocks in Louis Bacon’s portfolio.
Louis Bacon Moore of Moore Capital
Our Methodology:
These stocks are picked from the Q1 portfolio of billionaire Louis Bacon’s hedge fund.
Dividend Stocks to Buy According to Billionaire Louis Bacon
10. Comcast Corporation (NASDAQ:CMCSA)
Dividend Yield as of August 8: 2.82%
Moore Global Investments’ Stake Value: $9,216,000
Comcast Corporation (NASDAQ:CMCSA) is an American telecommunications company that provides internet and home phone services. In Q2 2022, the company reported $6.3 billion in operating cash flow, up from $6.1 billion during the same period last year. The company generated $3.1 billion in free cash flow and paid $1.2 billion in dividends during the quarter, which shows that its FCF is enough for dividend payments. It ended the quarter with $6.8 billion available in cash and cash equivalents.
Comcast Corporation holds a 14-year track record of consistent dividend growth. The company pays a quarterly dividend of $0.27 per share, with a yield of 2.82%, as of August 8.
At the end of Q1 2022, Moore Global Investments owned 196,836 shares in Comcast Corporation, reducing its position in the company by 15%. The hedge fund’s total stake in the company amounted to over $9.2 million, which represented 0.23% of Louis Bacon’s portfolio.
At the end of Q1 2022, 78 hedge funds in Insider Monkey’s database owned stakes in Comcast Corporation, down from 80 a quarter earlier. These stakes are collectively valued at over $7 billion. Among these hedge funds, First Eagle Investment Management owned the largest stake in the company in Q1.
Comcast Corporation is down 24.5% year-to-date, just like major tech stocks, such as Apple Inc., Alphabet Inc., and Amazon.com, Inc., which have also lost their value in 2022 so far.
ClearBridge Investments mentioned Comcast Corporation in its Q4 2021 investor letter. Here is what the firm had to say:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Comcast was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
9. Lockheed Martin Corporation (NYSE:LMT)
Dividend Yield as of August 8: 2.63%
Moore Global Investments’ Stake Value: $10,911,000
Lockheed Martin Corporation (NYSE:LMT) is an American aerospace company that specializes in defense and information security. Moore Global Investments started building its position in the company during the third quarter of 2012, with shares worth over $1 million. In Q1 2022, the hedge fund bought an additional stake worth over $6.6 million, boosting its position in the company by 108%. The company accounted for 0.27% of Louis Bacon’s portfolio.
Lockheed Martin Corporation has been paying dividends to shareholders consistently since 1996 while maintaining a 19-year track record of dividend growth. The company pays a quarterly dividend of $2.80 per share, with a yield of 2.63%, as of August 8.
In July, Susquehanna lifted its price target on Lockheed Martin Corporation to $539 with a Positive rating on the shares, expecting the company to maintain growth in domestic and international defense spending.
The number of hedge funds tracked by Insider Monkey owning stakes in Lockheed Martin Corporation grew to 56 in Q1 2022, from 42 in the previous quarter. The collective value of these stakes is over $2.44 billion.
Ariel Investments mentioned Lockheed Martin Corporation in its Q3 2021 investor letter. Here is what the firm has to say:
“Conversely, leading global defense contractor Lockheed Martin Corporation (LMT) was the greatest detractor over the trailing one-year period due to pared back F-35 delivery plans and weaker than expected 2022 sales guidance. Nonetheless, we remain confident in LMT’s positioning as they continue to secure a steady stream of lucrative contracts and benefit from a sizeable backlog. Looking ahead, management is focused on driving innovation, underscored by the pending acquisition of Aerojet Rocketdyne enabling vertical integration in propulsion systems for space and missile defense. At today’s valuation, LMT is currently trading at a 32% discount to our estimate of private market value.”
8. The Mosaic Company (NYSE:MOS)
Dividend Yield as of August 8: 1.15%
Moore Global Investments’ Stake Value: $14,963,000
An American agricultural corporation, The Mosaic Company (NYSE:MOS) announced a quarterly dividend of $0.15 per share in May, raising it by 33%. This was the company’s third consecutive year of dividend growth. As of August 8, the stock’s dividend yield came in at 1.15%.
The Mosaic Company is one of the latest acquisitions of Moore Global Investments. The hedge fund initiated its position in the company with 225,000 shares, worth nearly $15 million. The company represented 0.38% of Louis Bacon’s portfolio.
In August, Citigroup upgraded The Mosaic Company to Buy while lifting its price target to $61. The firm expects the agricultural stocks to perform well in a slowing economic environment.
The Mosaic Company was a popular buy among elite funds in Q1 2022, as 66 hedge funds tracked by Insider Monkey owned stakes in the company, up from 46 in the previous quarter. These stakes hold a value of over $1.5 billion. Soroban Capital Partners was the company’s leading stakeholder in Q1.
Carillon Tower Advisers mentioned The Mosaic Company in its Q1 2022 investor letter. Here is what the firm has to say:
“Despite a rally near the end of the quarter, major equity indexes closed lower as fear of U.S. Federal Reserve (FED) balance sheet tapering, interest rate hikes, and war in Ukraine sent the bulls into retreat. Supply chains eased for some goods, but remained challenged for many commodities including energy, agriculture, and fertilizer due to war and general scarcity, and also in many consumer products as semiconductors remained in short supply. Potash and phosphate fertilizer producer Mosaic (NYSE:MOS) performed strongly as war exacerbated already short supplies of key oil and gas exploration.”
7. Northrop Grumman Corporation (NYSE:NOC)
Dividend Yield as of August 8: 1.45%
Moore Global Investments’ Stake Value: $15,299,000
Northrop Grumman Corporation (NYSE:NOC) is a Virginia-based aerospace company that specializes in defense technology. In Q1 2022, Moore Global Investments increased its stake in the company by 389%, purchasing additional 27,208 shares. The hedge fund’s total stake in the company amounted to nearly $15.3 million, which represented 0.38% of Louis Bacon’s portfolio.
On May 18, Northrop Grumman Corporation declared a quarterly dividend of $1.73 per share, up 10% from its previous dividend. The company has been growing its dividend consistently for the past 18 years, bringing its annual dividend to $6.92 per share in 2022, from $1.60 per share in 2003. As of August 8, the stock’s dividend yield was recorded at 1.45%.
In July, Susquehanna lifted its price target on Northrop Grumman Corporation to $530 while maintaining a Positive rating on the shares.
At the end of Q1 2022, 39 hedge funds in Insider Monkey’s database owned stakes in Northrop Grumman Corporation, up from 33 in the previous quarter. The total value of these stakes came in at $940.3 million.
LRT Capital Management mentioned Northrop Grumman Corporation in its Q2 2022 investor letter. Here is what the firm has to say:
“Based in Virginia, Northrop Grumman is one of the world’s largest defense contractors with annual revenue of more than $30 billion. The company operates in a cozy oligopoly, that after decades of consolidation the US defense market is now controlled by five large companies: The Boeing Company, General Dynamics Corporation, Lockheed Martin Corporation, Northrop Grumman Corporation, and Raytheon Technologies Corporation. (Click here to see the full text)
6. FedEx Corporation (NYSE:FDX)
Dividend Yield as of August 8: 1.96%
Moore Global Investments’ Stake Value: $15,340,000
FedEx Corporation (NYSE:FDX), an American transport company, raised its quarterly dividend by 53% in June to $1.15 per share. This was the company’s 21st consecutive year of dividend growth. In the last five years, the company has raised its dividend at a CAGR of 13.4%. Its dividends are safe for the future as well, as its free cash flow generation has remained stable over the years. As of August 8, the stock’s dividend yield came in at 1.96%.
In Q1 2022, Moore Global Investment owned 66,296 FDX shares, with a total value of over $15.3 million. The hedge fund trimmed its position in the company by 7% during the quarter and has been investing in the company since 2011. FedEx Corporation represented 0.38% of Louis Bacon’s portfolio in Q1.
In June, BofA raised its price target on FedEx Corporation to $287 with a Buy rating on the shares, presenting a positive outlook on the stock.
As per Insider Monkey’s Q1 2022, 52 hedge funds owned stakes in FedEx Corporation worth over $1.78 billion. In the previous quarter, 64 hedge funds held positions in the Tennessee-based company, with stakes valued at over $2.4 billion. Ken Griffin, Steve Cohen, and Israel Englander were some of the prominent stakeholders of the company in Q1.
In addition to major tech stocks like Apple Inc., Alphabet Inc., and Amazon.com, Inc., FedEx Corporation is also one of Louis Bacon’s prominent holdings in Q1.
5. Caterpillar Inc. (NYSE:CAT)
Dividend Yield as of August 8: 2.59%
Moore Global Investments’ Stake Value: $15,637,000
Caterpillar Inc. (NYSE:CAT) designs and manufactures machinery, engines, and other products for its consumers. It also provides insurance-related services through a dealer network. Moore Global Investments sold off its $11.2 million worth of stake in the company during the fourth quarter of 2021 and resumed its position in Q1 2022. The hedge fund purchased 70,178 CAT shares, valued at over $15.6 million. The company represented 0.39% of Louis Bacon’s portfolio.
In the first half of 2022, Caterpillar Inc. generated $2.5 billion in free cash flow and paid over $600 million in dividends during this time. The company’s solid financials confirm that it is well-positioned to raise its dividends in the coming years as well. On June 8, Caterpillar Inc. announced an 8% hike in its quarterly dividend to $1.20 per share. This was the company’s 28th year of dividend growth with an 89-year history of uninterrupted dividend payments. As of August 8, the stock’s dividend yield stood at 2.59%.
Following the company’s strong quarterly results, Credit Suisse raised its price target on Caterpillar Inc. in August to $236 with an Outperform rating on the shares.
At the end of March 2022, 54 hedge funds in Insider Monkey’s database were bullish on Caterpillar Inc., up from 53 in the previous quarter. The stakes owned by these hedge funds are collectively valued at over $4 billion.
Diamond Hill Capital mentioned Caterpillar Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
4. Fidelity National Information Services, Inc. (NYSE:FIS)
Dividend Yield as of August 8: 1.93%
Moore Global Investments’ Stake Value: $16,334,000
Fidelity National Information Services, Inc. (NYSE:FIS) is a Florida-based corporation that provides a wide range of financial products and services. Moore Global Investments opened its position in the company during the fourth quarter of 2011, purchasing shares worth $266,000. In Q1 2022, the hedge fund owned 162,659 FIS shares, with a total value of over $16.3 million. The company accounted for 0.41% of Louis Bacon’s portfolio.
On July 21, Fidelity National Information Services, Inc. declared a quarterly dividend of $0.47 per share, consistent with its previous dividend. The company maintains an 11-year track record of consistent dividend growth, with a 5-year dividend CAGR of 9.35%. The stock’s dividend yield was recorded at 1.93% on August 8.
In August, Mizuho lowered its price target on Fidelity National Information Services, Inc. to $120 as the company’s management guided down fiscal year organic revenue growth. However, the firm maintained its Buy rating on the stock.
As of the end of Q1 2022, 68 hedge funds tracked by Insider Monkey reported owning stakes in Fidelity National Information Services, Inc., down from 75 in the previous quarter. The stakes owned by hedge funds are collectively valued at nearly $4 billion. With over 9.4 million shares, Select Equity Group was the company’s leading stakeholder in Q1.
Weitz Investment Management mentioned Fidelity National Information Services, Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“Other fiscal-year detractors included Fidelity National Information Services (NYSE:FIS). FIS has been our most disappointing investment in the Covid era. Unlike Meta, the stock trades well below our average cost. The business itself has been relatively durable, but the stock certainly has not. While the core elements of our bullish thesis remain firmly intact, hindsight tells us that we could have waited for a better entry point. From today’s stock price, which is what matters now, we think the risk/reward balance is favorable.”
3. Unum Group (NYSE:UNM)
Dividend Yield as of August 8: 3.68%
Moore Global Investments’ Stake Value: $19,662,000
Unum Group (NYSE:UNM) is a Tennessee-based insurance company that provides financial insurance products to industries. On July 15, the company announced a quarterly dividend of $0.33 per share, raising it by 10% in May. The company has raised its dividends 13 years in a row with an 11.5% dividend growth rate in the last 10 years. As of August 8, the stock’s dividend yield came in at 3.68%.
Unum Group was one of the latest holdings of Moore Global Investments. The hedge fund opened its position in the company with 623,999 shares, valued at over $19.6 million. The company represented 0.49% of Louis Bacon’s portfolio.
At the end of Q1 2022, 30 hedge funds tracked by Insider Monkey owned $323.5 million worth of combined stakes in Unum Group. Two Sigma Advisors was the largest stakeholder of the insurance company in Q1, owning shares worth over $63.2 million.
2. Ally Financial Inc. (NYSE:ALLY)
Dividend Yield as of August 8: 3.68%
Moore Global Investments’ Stake Value: $29,903,000
Ally Financial Inc. (NYSE:ALLY) is a Michigan-based bank holding company that also provides financial services to its customers. In Q1 2022, Moore Global Investments reduced its position in the company by 41%, selling off a stake worth over $25 million. The hedge fund’s total stake in the company amounted to roughly $30 million, which represented 0.76% of Louis Bacon’s portfolio.
Ally Financial Inc. pays a quarterly dividend of $0.30 per share, with a dividend yield of 3.68%, as of August 8. The company has grown its dividends consistently for the past five years at a CAGR of 26%.
Appreciating the company’s Q2 results, Deutsche Bank set a $55 price target on Ally Financial Inc. in July while maintaining a Buy rating on the shares.
At the end of Q1 2022, 49 hedge funds tracked by Insider Monkey held investments in Ally Financial Inc., up from 48 in the previous quarter. The stakes owned by hedge funds have a consolidated value of over $2.4 billion.
Oakmark Funds mentioned Ally Financial Inc. in its Q2 2022 investor letter. Here is what the firm has to say:
“As for Ally Financial, fears of a recession drove the stock price down more than 20% for the period, but business fundamentals have remained strong and the shares now trade for just a mid-single-digit multiple of current earnings. We believe today’s price ignores the funding cost improvements and well-capitalized nature of Ally’s balance sheet. We continue to own both investments given their significant discounts to our estimates of business value.”
1. The Allstate Corporation (NYSE:ALL)
Dividend Yield as of August 8: 2.91%
Moore Global Investments’ Stake Value: $32,411,000
An American insurance company, The Allstate Corporation (NYSE:ALL) holds a 14-year streak of consistent dividend growth. The company has raised its dividend at a CAGR of 18.8% in the past five years. It pays a quarterly dividend of $0.85 per share, with a yield of 2.91%, recorded on August 8.
Moore Global Investments has been investing in The Allstate Corporation since 2011. In Q1 2022, the fund trimmed its position in the company by 10%, taking its total ALL stake to over $32.4 million. The company accounted for 0.82% of Louis Bacon’s portfolio.
In May, Citigroup initiated its coverage of The Allstate Corporation with a $159 price target and a Buy rating on the shares. The firm believes that the life sector offers an attractive entry point due to higher interest rates.
At the end of Q1 2022, 44 hedge funds held positions in The Allstate Corporation, up from 40 in the previous quarter, according to Insider Monkey’s database. These hedge funds held collective investments in the company worth over $1 billion. AQR Capital Management was the company’s leading shareholder in Q1, owning a stake worth over $380.8 million.
You can also take a look at John Allison’s Unio Capital Portfolio: 10 Dividend Stocks and 10 Dividend Stocks to Buy According to Lee Munder Capital Group
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This article is originally published at Insider Monkey.
