In this article, we will take a look at the 5 most promising dividend stocks according to analysts. To see more such companies, go directly to 15 Most Promising Dividend Stocks According to Analysts.
5. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 55
One-Year Average Price Estimate: $70
Oil company Devon Energy Corporation (NYSE:DVN) is one of the most promising dividend stocks according to analysts. In February, Devon Energy Corporation (NYSE:DVN) declared a quarterly dividend of $0.20 per share, which was an 11.1% increase from the previous dividend of $0.18. Forward dividend yield came in at 1.25%. The new dividend was payable on March 31.
During the fourth quarter, Devon Energy Corporation (NYSE:DVN)’s adjusted EPS came in at $1.66, missing estimates by $0.09. Revenue in the quarter increased by 0.7% on a YoY basis to reach $4.3 billion, beating estimates by $10 million.
At the end of the last quarter of 2022, 55 hedge funds tracked by Insider Monkey reported having stakes in Devon Energy Corporation (NYSE:DVN). The net worth of these stakes was about $824 million. The most notable stakeholder of Devon Energy Corporation (NYSE:DVN) was Donald Yacktman’s Yacktman Asset Management with a $173 million stake.
4. Chesapeake Energy Corporation (NYSE:CHK)
Number of Hedge Fund Holders: 58
One-Year Average Price Estimate: $119
Chesapeake Energy Corporation (NYSE:CHK) is one of the most promising dividend stocks according to analysts. Chesapeake Energy Corporation (NYSE:CHK) had announced a $1.29 per common share to be paid in March 2023. During the fourth quarter, Chesapeake Energy Corporation (NYSE:CHK)’s adjusted EPS came in at $4.22, beating estimates by $1.32.
As of the end of the last quarter of 2022, 58 hedge funds had stakes in Chesapeake Energy Corporation (NYSE:CHK), according to Insider Monkey’s proprietary database of 943 hedge funds.
Carillon Tower Advisers made the following comment about Chesapeake Energy Corporation (NASDAQ:CHK) in its Q3 2022 investor letter:
“Chesapeake Energy Corporation (NASDAQ:CHK), a natural gas exploration and production company, emerged from bankruptcy with little fanfare in 2021, despite having rid itself of its debt burden and onerous pipeline contracts. The company was able to make two large acquisitions at very reasonable prices within its core producing areas, allowing for scale and cost savings. Then in 2022, natural gas prices began to rise well above expectations, increasing the value of Chesapeake’s large natural gas resources and production and contributing to its outperformance.”
3. Fidelity National Information Services, Inc. (NYSE:FIS)
Number of Hedge Fund Holders: 64
One-Year Average Price Estimate: $81.71
Financial and technology services company Fidelity National Information Services, Inc. (NYSE:FIS) ranks 3rd in our list of the most promising dividend stocks according to analysts.
In February, Fidelity National Information Services, Inc. (NYSE:FIS) declared a quarterly dividend of $0.52 per share, a whopping 10.6% increase from the prior dividend of $0.47. The dividend was payable on March 24 to shareholders of record as of March 10.
At the end of the fourth quarter of 2022, 64 hedge funds had stakes in Fidelity National Information Services, Inc. (NYSE:FIS).
Diamond Hill Large Cap Strategy made the following comment about Fidelity National Information Services, Inc. (NYSE:FIS) in its Q4 2022 investor letter:
“In addition to SVB Financial and V.F. Corporation, we eliminated our positions in financial services technology company Fidelity National Information Services, Inc. (NYSE:FIS) and media and technology company Comcast Corporation (NASDAQ:CMCSA). Several reasons factored into our decision to sell Fidelity National Information Services, including board and leadership changes, a strategic review, and a cooperation agreement with activist shareholder D.E. Shaw (and discussions with JANA Partners).”
2. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 70
One-Year Average Price Estimate: $113.52
In January, CVS Health Corporation (NYSE:CVS) declared a quarterly dividend of $0.605 per share, which was bump from the previous dividend of $0.55. CVS Health Corporation (NYSE:CVS)’s one-year average price target set by analysts is $113.52, which shows a strong upside potential from current levels. At the end of the fourth quarter of 2022, 70 hedge funds out of the 943 funds had stakes in CVS Health Corporation (NYSE:CVS). The total worth of these stakes was $2.1 billion. The biggest hedge fund stakeholder of CVS Health Corporation (NYSE:CVS) was Cliff Asness’ AQR Capital Management which had a $396 million stake in the company.
Here is what Vltava Fund has to say about CVS Health Corporation (NYSE:CVS) in its Q3 2022 investor letter:
“CVS is a leader in the provision of healthcare services in the USA. It has three main businesses: an enormous network of pharmacies, a health insurance company, and “prescription benefit management”, which is a kind of intermediary between insurance companies and pharmacies. This is the result of large acquisitions over the past 15 years – most notably of Caremark (2007) and Aetna (2018). The markets had deemed its acquisition of health insurer Aetna too expensive (and we agree), so CVS stock then fell into disfavour for a few years.
We took advantage of this in the summer of 2020 and brought the stock into our portfolio at a time when its price was pressed down still further by the coronavirus pandemic. CVS is a giant. It has revenues of USD 300 billion, making it one of the largest companies in the world. It is a relatively stable and highly profitable company with strong free cash flow. Over the past few years, CVS has focused primarily on reducing debt.
This is already much lower than it had been after the Aetna acquisition, and most of the cash is now likely to go to shareholders through share buybacks or be used for smaller acquisitions to grow the company further. CVS trades at about 11 times annual earnings, which is a very appealing valuation given the expected future growth in profitability and overall modest cyclicality in its business.”
1. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 100
One-Year Average Price Estimate: $40.43
Bank of America Corporation (NYSE:BAC) is one of the most promising dividend stocks according to analysts. Bank of America Corporation (NYSE:BAC)’s client base is expected to increase as customer flock to major banks to deposit their money amid the SVB collapse. In February, Bank of America Corporation (NYSE:BAC) declared a quarterly dividend of $0.22 per share, in line with the previous dividend. Forward dividend yield at the time came in at 2.45%. The dividend is payable on March 31 to shareholders of record as of March 3.
At the end of the fourth quarter of 2022, 100 hedge funds out of the 943 funds tracked by Insider Monkey had stakes in Bank of America Corporation (NYSE:BAC).
Ariel Investment made the following comment about Bank of America Corporation (NYSE:BAC) in its Q3 2022 investor letter:
“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”
You can also take a peek at 12 Small Cap Stocks with Insider Buying and 12 Best EV Stocks To Buy For 2023.
