In this article, we discuss 10 dividend stocks to buy according to Steve Cohen’s Point72 Asset Management.
Steve Cohen founded Point72 Asset Management in 2014, utilizing his 25-year investment business experience. The hedge fund invests in multiple asset classes and strategies globally, with the main focus on long/short investing business. Cohen follows a defensive stock-picking strategy and invests in safe sectors that provide a hedge against the slumping market. As of August, he has a net worth of over $17.4 billion, according to Forbes. Moreover, his hedge fund reported over $24.4 billion in assets under management.
Point72 Asset Management uses top-down analysis to develop policies and strategies and carry capital allocation process. Along with this, the firm analyses the market situation from various angles to regulate the level of risks in individual portfolios and the firm as well. In the past years, Point72 Asset Management delivered strong results to shareholders, ending 2021 with a 9.2% gain. Cohen’s hedge fund remained on a sound financial footing in 2020 as well, gaining 16% during the year. In addition to this, Cohen’s personal earnings amounted to over $1.4 billion that year, according to Institutional Investor.
At the end of Q1 2022, Point72 Asset Management had a 13F portfolio valued at over $25 billion, in line with its value in the previous quarter. The hedge fund made investments in several sectors, with services and healthcare sectors taking up the major portion of the portfolio. In addition to this, the fund also had significant investments in dividend stocks like The Coca-Cola Company (NYSE:KO), Merck & Co., Inc. (NYSE:MRK), and Johnson & Johnson (NYSE:JNJ). In view of this, we will discuss the best dividend stocks to buy according to Steve Cohen’s Point72 Asset Management.
Steven Cohen of Point72 Asset Management
Our Methodology:
For this article, we considered data from Point72 Asset Management’s Q1 2022 13F portfolio. The stocks are ranked according to their stake value in the hedge fund’s portfolio.
Dividend Stocks to Buy According to Steve Cohen’s Point72 Asset Management
10. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of August 5: 2.63%
Point72 Asset Management’s Stake Value: $106,568,000
Johnson & Johnson (NYSE:JNJ) is an American pharmaceutical industry company that specializes in medical devices and other consumer products. Steve Cohen’s hedge fund started investing in the company during the fourth quarter of 2016 with shares worth over $28 million. During Q1 2022, the hedge fund bought an additional stake worth over $104.3 million, boosting its position in the company massively by 4,534%. The hedge fund’s total stake in the company amounted to over $106.5 million, which represented 0.42% of Steve Cohen’s portfolio.
Johnson & Johnson (NYSE:JNJ) has a long history of dividends, raising its dividends consecutively for the past 60 years. It pays a quarterly dividend of $1.13 per share, with a yield of 2.63%, as of August 5.
Following the company’s Q2 2022 results, Citigroup set a $201 price target on Johnson & Johnson (NYSE:JNJ) in July and maintained a Buy rating on the shares.
The number of hedge funds tracked by Insider Monkey owning stakes in Johnson & Johnson (NYSE:JNJ) stood at 83 in Q1 2022, consistent with the previous quarter’s hedge fund positions. The stakes are collectively valued at over $7.4 billion. With over 6.6 million shares, Arrowstreet Capital was the company’s leading stakeholder in Q1.
In addition to Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), Merck & Co., Inc. (NYSE:MRK) are also some major dividend stocks in Steve Cohen’s portfolio in Q1.
9. Entergy Corporation (NYSE:ETR)
Dividend Yield as of August 5: 3.40%
Point72 Asset Management’s Stake Value: $131,799,000
Entergy Corporation (NYSE:ETR) is a Louisiana-based nuclear electric power generation company that specializes in the production and retail distribution of electric power in the US.
Entergy Corporation (NYSE:ETR) currently pays a quarterly dividend of $1.01 per share, with a dividend yield of 3.40%, as of August 5. The company maintains a 7-year track record of consistent dividend growth and its 5-year dividend CAGR came in at 2.84%.
Entergy Corporation (NYSE:ETR) was one of the latest acquisitions of Point72 Asset Management. The hedge fund started its position with over 1.12 million ETR shares, worth nearly $131.8 million.
In light of the devastating hurricanes in 2020 and 2021, Mizuho lowered its price target on Entergy Corporation (NYSE:ETR) to $123, expecting the company to harden its system against damaging storms. However, the firm maintained its Buy rating on the stock.
At the end of Q1 2022, 29 hedge funds in Insider Monkey’s database owned stakes in Entergy Corporation (NYSE:ETR), up from 27 a quarter earlier. These stakes are collectively valued at $856.8 million.
8. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of August 5: 2.76%
Point72 Asset Management’s Stake Value: $132,691,000
Steve Cohen’s hedge fund owned over 2.1 million shares in The Coca-Cola Company (NYSE:KO) in Q1 2022, with a total value of nearly $132.7 million. The multinational beverage company has been in the hedge fund’s portfolio since the first quarter of 2015. In Q1 2022, the company represented 0.52% of Steve Cohen’s portfolio.
The Coca-Cola Company (NYSE:KO) holds one of the longest track records of dividend growth in the market, boosting its payouts consecutively for the past 60 years. The company offers a quarterly dividend of $0.44 per share, with a yield of 2.76%, as of August 5.
In July, JPMorgan called The Coca-Cola Company (NYSE:KO) one of the best defensive names due to its growth momentum and set a $70 price target on the stock, with an Overweight rating on the shares.
Warren Buffett’s Berkshire Hathaway owned 400 million shares in The Coca-Cola Company (NYSE:KO), worth $24.8 billion, becoming the company’s leading stakeholder in Q1. Overall, 64 hedge funds in Insider Monkey’s database owned stakes in the Georgia-based company, with a total value of over $29 billion.
ClearBridge Investments mentioned The Coca-Cola Company (NYSE:KO) in its Q4 2021 investor letter. Here is what the firm had to say:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
7. Fidelity National Information Services, Inc. (NYSE:FIS)
Dividend Yield as of August 5: 1.95%
Point72 Asset Management’s Stake Value: $147,427,000
Fidelity National Information Services, Inc. (NYSE:FIS) is a Florida-based multinational corporation that specializes in financial technology and offers other financial services. On July 21, the company declared a quarterly dividend of $0.47 per share, raising it by 21% in January. This was the company’s 11th consecutive year of dividend growth with a 5-year CAGR of 8.9%. As of August 5, the stock’s dividend yield came in at 1.95%.
Point72 Asset Management started building its position in Fidelity National Information Services, Inc. (NYSE:FIS) during the second quarter of 2014, with stakes worth over $4.4 million. In Q1 2022, the hedge fund purchased additional 658,800 FIS shares, increasing its position in the company by 88%. The fund’s total stake in the company stood at $147.4 million in Q1, which represented 0.58% of Steve Cohen’s portfolio.
In June, Evercore ISI upgraded Fidelity National Information Services, Inc. (NYSE:FIS) to Outperform and also raised the stock’s price target to $135.
At the end of Q1 2022, 68 hedge funds in Insider Monkey’s database owned stakes in Fidelity National Information Services, Inc. (NYSE:FIS), valued at roughly $4 billion. In the previous quarter, 75 hedge funds held investments in the company, with a total value of nearly $4.9 billion.
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.”
6. Broadcom Inc. (NASDAQ:AVGO)
Dividend Yield as of August 5: 2.97%
Point72 Asset Management’s Stake Value: $167,645,000
An American semiconductor company, Broadcom Inc. (NASDAQ:AVGO) holds an 11-year track record of consistent dividend growth. The company pays a quarterly dividend of $4.10 per share, with a yield of 2.97%, as of August 5. In its fiscal Q2 2022, the company paid $1.7 billion in dividends, which represented 50% of its free cash flow.
In Q1 2022, Point72 Asset Management owned 266,239 shares in Broadcom Inc. (NASDAQ:AVGO), valued at over $167.6 million. The hedge fund increased its position in the company by 1,506%. The company accounted for 0.66% of Steve Cohen’s portfolio.
Appreciating the company’s positive fundamental strength across the majority of its sectors, Deutsche Bank set a $635 price target on Broadcom Inc. (NASDAQ:AVGO) in July, with a Buy rating on the shares.
At the end of Q1 2022, 71 hedge funds in Insider Monkey’s database presented a bullish stance on Broadcom Inc. (NASDAQ:AVGO), up from 62 in the previous quarter. The combined value of these stakes is nearly $5.5 billion.
Just like famous dividend stocks like The Coca-Cola Company (NYSE:KO), Merck & Co., Inc. (NYSE:MRK), and Johnson & Johnson (NYSE:JNJ), Broadcom Inc. (NASDAQ:AVGO) is also one of the most prominent dividend stocks for income investors.
ClearBridge Investments mentioned Broadcom Inc. (NASDAQ:AVGO) in its Q4 2021 investor letter. Here is what the firm has to say:
“However, ClearBridge portfolio companies are responding by supporting their workforces and showing resilience in adapting and thriving. Semiconductor companies ClearBridge owns and engages with have been successful in advancing vaccinations in their global supply chains. In Malaysia, for example, Broadcom has taken part in PIKAS, a public-private partnership vaccination program focusing on the workforce in critical manufacturing sectors. By the summer of 2021 Broadcom was able to get over 90% of workers in its Penang factory at least one dose of vaccine, and roughly 73% fully vaccinated. Companies in the program also pay the administration cost for vaccinations including cases where the employee is no longer employed by the company before full immunization of the employee.”
5. Target Corporation (NYSE:TGT)
Dividend Yield as of August 5: 2.59%
Point72 Asset Management’s Stake Value: $168,714,000
An American big-box store company, Target Corporation (NYSE:TGT) was one of the recent holdings of Point72 Asset Management. The hedge fund initiated its position in the company with 794,997 shares, valued at over $168.7 million. The company accounted for 0.66% of Steve Cohen’s portfolio.
In June, Target Corporation (NYSE:TGT) raised its dividend for the 51st consecutive year, which takes its quarterly dividend to $1.08 per share. In Q1 2022, the company spent $424 million in dividend payments, up 32.4% from the same period last year. As of August 5, the stock’s dividend yield came in at 2.59%.
On August 1, Wells Fargo upgraded Target Corporation (NYSE:TGT) to Overweight and also raised its price target on the stock to $195. The firm appreciated the company’s earnings recovery after the pandemic.
As per Insider Monkey’s Q1 2022 database, 50 hedge funds owned stakes in Target Corporation (NYSE:TGT), up from 49 a quarter earlier. The collective value of stakes owned by hedge funds stood at nearly $3 billion. Jim Simons, Israel Englander, and Ken Griffin were some of the company’s major stakeholders in Q1.
4. ConocoPhillips (NYSE:COP)
Dividend Yield as of August 5: 3.35%
Point72 Asset Management’s Stake Value: $198,113,000
ConocoPhillips (NYSE:COP) is a Texas-based multinational company that is engaged in the production and exploration of hydrocarbon. The company paid $3.3 billion to shareholders in Q2 2022, $1 billion of which was paid in dividends. It currently pays a quarterly dividend of $0.46 per share, with a yield of 3.35%, as of August 5. Though the company has not raised its dividends consecutively, it has been making dividend payments continuously since 1993.
Point72 Asset Management started building its position in ConocoPhillips (NYSE:COP) during the first quarter of 2015, owning stakes worth over $3 million. In Q1 2022, the hedge fund increased its position in the company by 231%, purchasing an additional stake worth over $154.7 million. The company represented 0.78% of Steve Cohen’s portfolio.
In July, MKM Partners initiated its coverage of ConocoPhillips (NYSE:COP) with a Buy rating and a $110 price target, appreciating the company’s high returns of capital to shareholders.
ConocoPhillips (NYSE:COP) was a popular stock among elite funds in Q1 2022, as shown by Insider Monkey’s data. At the end of Q1, 67 hedge funds owned stakes in the company, growing from 56 in the previous quarter. These stakes are collectively valued at over $2.58 billion.
Diamond Hill Capital mentioned ConocoPhillips (NYSE:COP) in its Q1 2022 investor letter. Here is what the firm has to say:
“We redeployed capital into ConocoPhillips (NYSE:COP), which was trading at a discount to our estimate of intrinsic value and is well positioned over the long run due to its low-risk asset base.”
3. Analog Devices, Inc. (NASDAQ:ADI)
Dividend Yield as of August 5: 1.72%
Point72 Asset Management’s Stake Value: $235,722,000
Analog Devices, Inc. (NASDAQ:ADI) is a Norwood-based semiconductor company that specializes in data conversion, power management technology, and signal processing. In Q1 2022, Point72 Asset Management owned 1.2 million shares in the company, boosting its position by 363% during the quarter. The hedge fund’s total stake in the company amounted to $235.7 million, which made up 0.93% of Steve Cohen’s portfolio.
On May 18, Analog Devices, Inc. (NASDAQ:ADI) announced a quarterly dividend of $0.76 per share, consistent with its previous dividend. The company has a strong dividend history, raising its dividends 19 times in the past 18 years. Moreover, the company has been paying dividends for 73 consecutive quarters, with a cumulative value of over $8 billion. As of August 5, the stock’s dividend yield stood at 1.72%.
In July Goldman Sachs expressed concerns for the semiconductor industry due to the current supply chain issues. In view of this, the firm lowered its price target on the stock but maintained a Buy rating on the shares.
At the end of Q1 2022, 67 hedge funds tracked by Insider Monkey owned stakes in Analog Devices, Inc. (NASDAQ:ADI), down from 72 in the previous quarter. The combined value of these stakes is over $4.8 billion. Among these hedge funds, Egerton Capital Management was the company’s leading stakeholder in Q1.
Madison Funds mentioned Analog Devices, Inc. (NASDAQ:ADI) in its Q3 2021 investor letter. Here is what the firm has to say:
“At its 2017 investor day, Analog Device’s VP of Automotive, Mark Gill, described how the company’s content on well-equipped electric vehicles was $600 per car compared to $250 per car for the traditional 2017 internal combustion engine car. Since then, Analog has highlighted the success of its EV battery management systems (BMS) product nearly every quarter. The BMS product is hardware and software that manages the power into and out of the battery systems. It’s the brains of the operation. Analog says it’s on its fifth generation BMS product, that it has the no. 1 market share in high voltage products, and that it is on 5 of the top 10 selling EVs. While we think that the BMS product is just 1 to 1.5% of Analog Devices, Inc. (NASDAQ:ADI)’s product mix, we think that it could add nearly a point of revenue growth per year to the company’s top-line given the expected ramp in EV production. This is a material amount of growth atop an already nicely growing company revenue line.”
2. FedEx Corporation (NYSE:FDX)
Dividend Yield as of August 5: 1.94%
Point72 Asset Management’s Stake Value: $240,357,000
FedEx Corporation (NYSE:FDX) is a Tennessee-based multinational transport company that offers e-commerce and related services to consumers. The company has been raising its dividends consistently for the past 21 years and has a 5-year CAGR of 13.4%. It pays a quarterly dividend of 1.15 per share, with a dividend yield of 1.94%, as of August 5.
Point72 Asset Management started investing in FedEx Corporation (NYSE:FDX) during the third quarter of 2014, purchasing shares worth over $39 million. The hedge fund increased its stake in the company by 139% in Q1 2022, taking its total value to over $240.3 million. The company accounted for 0.95% of Steve Cohen’s portfolio.
In June, BofA raised its price target on FedEx Corporation (NYSE:FDX) to $287 with a Buy rating on the shares, highlighting the company’s earnings improvement.
At the end of Q1 2022, 52 hedge funds in Insider Monkey’s database owned stakes in FedEx Corporation (NYSE:FDX), compared with 64 a quarter earlier. The collective value of these stakes is over $1.78 billion.
1. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of August 5: 3.18%
Point72 Asset Management’s Stake Value: $293,903
An American pharmaceutical company, Merck & Co., Inc. (NYSE:MRK) was the third largest holding of Point72 Asset Management in Q1 2022. The hedge fund owned over 3.5 million MRK shares, increasing its position in the company by 6,769% during the quarter. Its total stake in the company stood at nearly $294 million, which represented 1.16% of Steve Cohen’s portfolio.
On July 26, Merck & Co., Inc. (NYSE:MRK) declared a quarterly dividend of $0.69 per share, in line with its previous dividend. The company holds an 11-streak of consistent dividend growth and has not slashed its dividend since 1985. As of August 5, the stock’s dividend yield came in at 3.18%.
Appreciating the company’s Q2 2022 earnings beat, Barclays raised its price target on Merck & Co., Inc. (NYSE:MRK) to $101, with an Overweight rating on the shares.
As per Insider Monkey’s data, the elite funds’ interest in Merck & Co., Inc. (NYSE:MRK) increased in Q1 2022, with the company becoming a part of 84 hedge fund portfolios, up from 80 in the previous quarter. These hedge funds owned stakes worth over $5.8 billion in the New Jersey-based company.
Sound Shore Fund mentioned Merck & Co., Inc. (NYSE:MRK) in its recently-published Q2 2022 investor letter. Here is what the firm has to say:
“On the positive side, a number of our health care names outperformed, including drug maker Merck & Co. Benefitting from a best in class research and development team, Merck’s progress is being fueled by the impressive growth of its immunooncology cancer drug, Keytruda. The stock remains attractive at less than 12 times 2023 earnings.”
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Disclosure. None. 10 Dividend Stocks to Buy According to Steve Cohen’s Point72 Asset Management is originally published on Insider Monkey.
