In this article, we discuss 10 high dividend stocks picked by billionaire Gabelli.
Mario Gabelli built his reputation as one of Wall Street’s most successful investors when he caught the media and telecommunication wave just as it was blasting off in the 1980s. He founded GAMCO Investors in 1977 and is currently serving as the Chairman and Chief Executive Officer of the firm. The firm includes two businesses, GAMCO Asset Management and Gabelli Funds. As of September 2022, the billionaire’s real-time net worth stands at $1.6 billion, according to Forbes.
From the very beginning, GAMCO Investors seeks to invest in value, growth, ESG-centric, and convertible securities. The firm’s research-driven investment philosophy takes its inspiration from Benjamin Graham and Warren Buffett. Before investing in a company, the fund carries out meticulous research of its fundamentals, balance sheet, earnings, and free cash flow generation. In addition to this, Gabelli has always been fond of investing in different industries which act in accordance with his firm’s investment philosophy. This approach led to the development of the Gabelli Pet Parents Fund, which was founded in 2018. The fund delivered a 53.4% return in 2020 and gained 6.83% since its inception, as reported by Business Insider. The firm’s Gabelli Capital Asset Fund surged 7.90% in the last ten years with its five-year return of 4.3%.
GAMCO Investors’ dividend investment is also worth noticing. The Gabelli Dividend & Income Trust was founded in 2003 with the aim to provide high returns to shareholders. Under stable market conditions, the fund invests at least 80% of its assets in dividend-paying companies. Since its inception, the fund delivered a 7.53% return to shareholders and gained 6.07% in the last five years.
As of the end of Q2 2022, GAMCO Investors’ 13F portfolio had a value of over $9 billion, down from $11 billion in the previous quarter. The hedge fund invested heavily in services, industrial goods, and consumer goods sectors, with technology and healthcare taking up significant portions of its portfolio. Dividend stocks also make up a notable section of the portfolio. Some of the best dividend stocks that the firm had investments in include The Home Depot, Inc. (NYSE:HD), Johnson & Johnson (NYSE:JNJ), and Merck & Co., Inc. (NYSE:MRK). In this article, we will further discuss high dividend stocks picked by billionaire Gabelli.
Our Methodology:
For this list, we selected dividend stocks from GAMCO Investors’ 13F portfolio as of Q2 2022. The stocks mentioned below have dividend yields above 3%, as of September 26.
10. Wells Fargo & Company (NYSE:WFC)
Dividend Yield as of September 26: 3.01%
GAMCO Investors’ Stake Value: $54,407,000
Wells Fargo & Company is a New York-based multinational financial services company that provides banking, investment, and mortgage products and services. In September, Deutsche Bank maintained its Buy rating on the stock with a $60 price target as the firm sees strong loan growth which would lift its net interest income.
GAMCO Investors opened its position in Wells Fargo & Company during the third quarter of 2012 with shares worth over $107.4 million. In Q2 2022, the hedge fund owned roughly 1.4 million WFC shares, worth over $54.4 million. The company represented 0.59% of billionaire Gabelli’s portfolio.
On July 26, Wells Fargo & Company declared a 20% hike in its quarterly dividend to $0.30 per share. This was the company’s second dividend raise this year, which makes it one of the best dividend stocks in GAMCO’s portfolio. As of September 26, the stock’s dividend yield came in at 3.01%.
At the end of Q2 2022, 83 hedge funds tracked by Insider Monkey owned stakes in Wells Fargo & Company, down from 93 a quarter earlier. These stakes hold a collective value of over $5.1 billion. Eagle Capital Management was the company’s leading stakeholder in Q2.
In addition to The Home Depot, Inc., Johnson & Johnson, and Merck & Co., Inc., Wells Fargo & Company is also considered one of the best dividend stocks due to its consistent dividend payments.
9. Myers Industries, Inc. (NYSE:MYE)
Dividend Yield as of September 26: 3.19%
GAMCO Investors’ Stake Value: $73,302,000
Myers Industries, Inc. (NYSE:MYE) is an Ohio-based manufacturing company that specializes in the production of plastics and rubber products. Though the company hasn’t raised its dividends since 2014, it continued making consistent dividend payments over these years. Currently, the company pays a quarterly dividend of $0.135 per share and has a yield of 3.19%, as recorded on September 26.
GAMCO Investors initiated its position in Myers Industries, Inc. with shares worth over $55 million during the third quarter of 2012. At the end of Q2 2022, the firm owned over 3.2 million shares of the company, after reducing its position by 2%. The firm’s total MYE stake amounted to over $73.3 million, which represented 0.8% of its 13F portfolio.
At the end of Q2 2022, 9 hedge funds in Insider Monkey’s database owned stakes in Myers Industries, Inc., compared with 10 in the previous quarter. The collective value of these stakes is over $114 million. Jim Simons and Israel Englander were some of the company’s most prominent stakeholders in Q2.
8. Flowserve Corporation (NYSE:FLS)
Dividend Yield as of September 26: 3.22%
GAMCO Investors’ Stake Value: $44,390,000
Flowserve Corporation (NYSE:FLS) is one of America’s largest suppliers of industrial and environmental machinery. The company also sells products related to chemical and other industries. The company was a part of 13 hedge fund portfolios in Q2 2022, according to Insider Monkey’s data. The stakes owned by these hedge funds hold a consolidated value of over $148.2 million. Among these hedge funds, First Eagle Investment Management had the largest position in the company in Q2.
Flowserve Corporation has been a holding of GAMCO Investors for over a decade now when the hedge fund purchased over $151.6 million worth of stake in the company. At the end of Q2 2022, the fund had over 1.5 million FLS shares, worth over $44.3 million. The company accounted for 0.48% of billionaire Gabelli’s portfolio.
Flowserve Corporation is one of the best dividend stocks in GAMCO’s portfolio as it maintains a 15-year streak of dividend payments. It currently pays $0.20 per share in quarterly dividends, with a dividend yield of 3.22%, as of September 26.
In August, Citigroup raised its price target on Flowserve Corporation to $39 with a Buy rating on the shares. The firm thinks that the company is getting better at managing the current challenging environment and is well-positioned for good margin expansion in 2023.
7. Southwest Gas Holdings, Inc. (NYSE:SWX)
Dividend Yield as of September 26: 3.26%
GAMCO Investors’ Stake Value: $59,553,000
Southwest Gas Holdings, Inc. (NYSE:SWX) is a Nevada-based company that provides natural gas services to its residential, industrial, and commercial customers. In August, BofA raised its price target on the stock to $96 with a Buy rating on the shares, appreciating the company’s ongoing strategic review processes.
On September 21, Southwest Gas Holdings, Inc. declared a quarterly dividend of $0.62 per share, consistent with its previous dividend. The company has been paying dividends to shareholders since its IPO in 1956 and has raised its payouts every year since 2007. This makes it one of the best dividend stocks in Mario Gabelli’s portfolio. As of September 26, the stock’s dividend yield came in at 3.26%.
At the end of Q2 2022, Southwest Gas Holdings, Inc. represented 0.65% of GAMCO Investors’ portfolio. The hedge fund’s total stake in the company amounted to nearly $60 million.
Of the 895 elite funds tracked by Insider Monkey, 30 hedge funds owned investments in Southwest Gas Holdings, Inc. in Q2 2022, up from 29 in the previous quarter. These investments are collectively valued at over $933.4 million. With over 5 million shares, Icahn Capital LP was the company’s leading stakeholder in Q2.
6. Dana Incorporated (NYSE:DAN)
Dividend Yield as of September 26: 3.30%
GAMCO Investors’ Stake Value: $50,497,000
Dana Incorporated (NYSE:DAN) is an American supplier of products used in passenger vehicles. Some of the company’s products include driveshafts, transmissions, thermal, and digital equipment for nearly all kinds of vehicles. GAMCO Investors has been investing in the company since the third quarter of 2012. At the end of Q2 2022, the hedge fund owned nearly 3.6 million shares of the company, worth over $50.4 million. The company represented 0.55% of the firm’s 13F portfolio and is another important holding of the hedge fund alongside some best dividend stocks like The Home Depot, Inc., Johnson & Johnson, and Merck & Co., Inc..
Dana Incorporated resumed its dividends in April 2021, after ceasing its payouts for over a year in recognition of the pandemic of 2020. It currently pays a quarterly dividend of $0.10 per share and has a dividend yield of 3.30%, as recorded on September 26.
In Q2 2022, Dana Incorporated reported revenue of $2.48 billion, up 9.7% from the same period last year. The company’s operating cash flow came in at $121 million, compared with $27 million in the prior-year quarter. Its free cash flow for the quarter stood at $237 million, up from $426 million in Q2 2021. For FY22, the company expects its free cash flow to represent 1.9 to 2.3 percent of sales.
At the end of Q2 2022, 18 hedge funds tracked by Insider Monkey owned stakes in Dana Incorporated, down from 20 in the previous quarter. These stakes hold a collective value of over $363.2 million. Carl Icahn, Chuck Royce, and Cliff Asness were some of the company’s major stakeholders in Q2.
5. International Flavors & Fragrances Inc. (NYSE:IFF)
Dividend Yield as of September 26: 3.35%
GAMCO Investors’ Stake Value: $36,832,000
International Flavors & Fragrances Inc. is an American corporation that produces fragrances and cosmetics and sells them globally. Recently, the company set up a new Nourish Innovation Lab in New Jersey that will enable customers to co-create beverage solutions.
GAMCO Investors started investing in International Flavors & Fragrances Inc. during the third quarter of 2012, with shares worth over $63.6 million. In Q2 2022, the hedge fund owned 309,197 IFF shares, worth over $36.8 million. The company accounted for 0.4% of the firm’s 13F portfolio.
International Flavors & Fragrances Inc. currently pays a quarterly dividend of $0.81 per share and has a yield of 3.35%, as recorded on September 26. The company has been raising its dividends consistently for the past 19 years, coming through as one of the best dividend stocks in Mario Gabelli’s portfolio.
In August, Baird maintained its Outperformed rating on International Flavors & Fragrances Inc. with a $140 price target, as the company’s management is focused on creating a sustainable earnings algorithm, which will be formally launched in December this year.
At the end of June 2022, 34 hedge funds tracked by Insider Monkey owned stakes in International Flavors & Fragrances Inc., up from 33 in the previous quarter. The combined value of these stakes is over $2.78 billion.
4. Comcast Corporation (NASDAQ:CMCSA)
Dividend Yield as of September 26: 3.51%
GAMCO Investors’ Stake Value: $42,474,000
Comcast Corporation (NASDAQ:CMCSA) is an American telecommunications company that offers technology and entertainment solutions to its millions of customers. At the end of Q2 2022, GAMCO Investors boosted its stake in the company by 1%, which takes its total stake to over $42.4 million. The company represented 0.46% of the firm’s 13F portfolio.
In August, Barclays maintained its Equal Weight rating on Comcast Corporation with a $42 price target as the firm started coverage of cable companies.
On July 28, Comcast Corporation declared a quarterly dividend of $0.27 per share, in line with its previous dividend. The company is one of the best dividend stocks in Mario Gabelli’s portfolio as it holds a 14-year streak of dividend growth. In addition to this, it has raised its payouts at a CAGR of 12% in the last five years. As of September 26, the stock’s dividend yield came in at 3.51%.
At the end of Q2 2022, 75 hedge funds tracked by Insider Monkey owned stakes in Comcast Corporation, compared with 78 in the previous quarter. These stakes hold a total value of roughly $5.4 billion. Harris Associates was one of the company’s leading stakeholders in Q2.
3. The Bank of New York Mellon Corporation (NYSE:BK)
Dividend Yield as of September 26: 3.74%
GAMCO Investors’ Stake Value: $87,612,000
The Bank of New York Mellon Corporation (NYSE:BK) is a New York-based investment banking holding company that provides related services to its consumers. The company has been a part of GAMCO Investors’ portfolio since 2012. At the end of Q2 2022, the hedge fund owned over 2.1 million shares in the company, worth over $87.6 million. The company accounted for 0.96% of the fund’s 13F portfolio.
On July 15, The Bank of New York Mellon Corporation hiked its quarterly dividend by 8.8% to $0.37 per share. This marked the company’s 11th consecutive year of dividend growth. The company has been making uninterrupted dividends to shareholders for the past 21 years. As of September 26, the stock’s dividend yield came in at 3.74%.
In August, Deutsche Bank lifted its price target on The Bank of New York Mellon Corporation to $46 and maintained its Hold rating on the shares, as asset managers are seeing growth due to the sector rebound post-pandemic. The firm also highlighted the sector’s strong fundamentals.
At the end of June 2022, 38 hedge funds in Insider Monkey’s database owned stakes in The Bank of New York Mellon Corporation, down from 54 in the previous quarter. These stakes are collectively valued at over $3.6 billion. With over $3 billion worth of stakes, Berkshire Hathaway owned the largest position in the company in Q2.
Ariel Investments mentioned The Bank of New York Mellon Corporation in its Q4 2021 investor letter. Here is what the firm has to say:
“Rising interest rates, after a surprisingly long period of low absolute rates and negative “real” rates, will create a headwind. While there has been much debate about the cause of these low rates, we believe the most important factor has been the $120 billion in monthly federal reserve open market bond purchases and the accumulation of an $8 trillion balance sheet. The former will end, and the latter will shrink. It is not just the Fed that has aggressively purchased bonds, bidding up prices and lowering yields. Bond traders and hedge fund managers have added to positions, confident that being on the same side as the Fed was the wise place to be. Now as the Fed is about to become a seller of bonds rather than a buyer, Wall Street’s “smart money” is likely to follow suit. Against this backdrop, fixed income securities and bond substitutes such as high dividend paying utilities and absolute return hedge funds are substantially overpriced and are not likely to produce attractive returns going forward.
This expectation of a reversion to the mean for interest rates helped 2021 performance, though not as much as we had hoped. The yield on the U.S. 10-year Treasury did indeed increase from +0.92% at the beginning of the year to +1.52% at year-end. An underreported story was the poor performance of bonds last year. The Barclays Aggregate Index declined -1.67% for the year ending December compared to a return of +28.71% for equities as measured by the S&P 500. Interest rates have continued to climb in 2022 with the 10-year Treasury at +1.79% as we go to print. This move higher in rates has contributed to our good, early start to 2022. Smaller positions in The Bank of New York Mellon Corporation (BK) also benefited from higher rates, principally with their ability to invest customer cash.”
2. State Street Corporation (NYSE:STT)
Dividend Yield as of September 26: 4.02%
GAMCO Investors’ Stake Value: $56,437,000
State Street Corporation (NYSE:STT) is a multinational financial service and bank holding company that has operations worldwide. In August, Deutsche Bank raised its price target on the stock to $74 with a Hold rating on the shares, appreciating the company’s strong fundamentals in Q2 earnings. The firm also expects the company to maintain its performance in the next quarter.
At the end of Q2 2022, GAMCO Investors owned 915,436 shares in State Street Corporation, with a total value of over $56.4 million. The company represented 0.61% of the firm’s 13F portfolio.
State Street Corporation holds a strong dividend history as it has been paying consistent dividend payments for the past 24 years. The company also holds a 12-year track record of dividend growth. It currently pays a quarterly dividend of $0.63 per share, with a dividend yield of 4.02%, as of September 26.
The number of hedge funds tracked by Insider Monkey owning stakes in State Street Corporation grew to 41 in Q2 2022, from 29 in the previous quarter. The collective value of these stakes is over $667.6 million. With over 6 million shares, Harris Associates was the largest stakeholder of the Boston-based company in Q2.
1. Telephone and Data Systems, Inc. (NYSE:TDS)
Dividend Yield as of September 26: 4.96%
GAMCO Investors’ Stake Value: $27,115,000
Telephone and Data Systems, Inc. (NYSE:TDS) is a Chicago-based telecommunications service company that provides wireless products and services to its consumers. The company remained famous among elite funds in Q2 2022, as 16 hedge funds in Insider Monkey’s database owned stakes in the company, up from 12 in the previous quarter. These stakes have a total value of nearly $63.6 million.
On August 11, Telephone and Data Systems, Inc. declared a quarterly dividend of $0.11 per share, consistent with its previous dividend. In 2022, the company extended its dividend growth streak to 47 years and its 5-year dividend CAGR stands at 3.22%. As of September 26, the stock’s dividend yield came in at 4.96%.
At the end of Q2 2022, GAMCO Investors owned over 1.7 million shares in the company, after reducing its position in the company by 1%. The fund’s total TDS stake amounted to over $27 million, which represented 0.29% of its 13F portfolio.
You can also take a look at 10 Dividend Aristocrats Under $60 You Can Buy in September and 10 Dividend Stocks to Buy According to Bruce Kovner’s Caxton Associates LP
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This article is originally published at Insider Monkey.
