In this article, we discuss 5 dividend stocks to buy according to billionaire Louis Bacon. If you want to read our detailed analysis of Moore Global Investments’ performance, go directly to read 10 Dividend Stocks to Buy According to Billionaire Louis Bacon.
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. (NYSE:CAT) 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. (NYSE:CAT) 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. (NYSE:CAT) 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. (NYSE:CAT), 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. (NYSE:CAT) 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. (NYSE:FIS) 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. (NYSE:FIS) 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. (NYSE:FIS), 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. (NYSE:FIS) 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 (NYSE:UNM) 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 (NYSE:UNM). 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. (NYSE:ALLY) 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. (NYSE:ALLY) 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. (NYSE:ALLY), 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. (NYSE:ALLY) 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 (NYSE:ALL) 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 (NYSE:ALL) 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 (NYSE:ALL), 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
