In this article, we discuss the 9 dividend stocks to buy according to billionaire Dan Loeb’s Third Point.
Daniel Loeb is an American investor, hedge fund manager, and the founder of Third Point Management, a New York-based hedge fund. Third Point follows value-oriented and event-driven investment strategies. Along with this, the hedge fund focuses on delivering risk-adjusted returns with limited market exposure. Loeb is currently serving as the CEO of the firm. According to Forbes, his real-time net worth, as of March 2022, stood at $4 billion.
According to Bloomberg, Dan Loeb grabbed 12th place in the list of top 15 hedge fund managers who collectively earned around $16 billion in 2021. This is the first time Loeb has been added to the list. This complies with the hedge fund’s performance for the year as its Offshore Fund gained 22.7% and Ultra Fund returned 26.9% in 2021. Moreover, since their inception, the annual average returns of the Offshore Fund and Ultra Fund stood at 15.1% and 21.8%, respectively, as reported by Forbes.
In his recent statement, Loeb said that his hedge fund prefers to invest in traditional value tech stocks. He particularly quoted Amazon.com, Inc. (NASDAQ:AMZN), asserting that the stock is trading at a 30% to 40% discount to its present intrinsic value. The hedge fund increased its position in the company by 28%. Moreover, traditional tech stocks, such as Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc. (NASDAQ:GOOG) were two of the major holdings of the hedge fund in the fourth quarter of 2021.
Our Methodology:
In this article, we discuss the best dividend stocks in Dan Loeb’s portfolio. For this list, we took data from Third Point’s 13F portfolio as of Q4 2021.
9 Dividend Stocks to Buy According to Billionaire Dan Loeb’s Third Point
9. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 87
Dividend Yield as of March 4: 0.36%
Third Point’s Stake Value: $954,129,000
Danaher Corporation (NYSE:DHR) is an American company that manufactures products belonging to several different industries. On February 23, the company announced a quarterly dividend of $0.25 per share, showing a 19% growth from its previous dividend. The stock’s dividend yield, as of March 4, stood at 0.36%.
In Q4 2021, Danaher Corporation (NYSE:DHR) was the second-largest holding of Third Point. The hedge fund held a stake worth over $954 million in the company, which accounted for 6.65% of Dan Loeb’s portfolio. Appreciating the company’s Q4 consistent results, in January, Wells Fargo set a $330 price target on Danaher Corporation (NYSE:DHR), with a Sector Perform rating on the shares.
By the end of Q4 2021, the number of hedge funds tracked by Insider Monkey holding stakes in Danaher Corporation (NYSE:DHR) grew significantly to 87, from 74 in the previous quarter. These stakes are valued at $7.37 billion. Fisher Asset Management held the largest stake in the company in Q4, valued at roughly $1.2 billion.
Along with Danaher Corporation (NYSE:DHR), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) are some of the hedge fund’s major holdings in Q4 2021.
ClearBridge Investments mentioned Danaher Corporation (NYSE:DHR) in its Q3 2021 investor letter. Here is what the firm has to say:
“Diversified health care company Danaher, a top contributor in the second quarter, had a strong third quarter as well, posting a strong beat-and-raise driven by COVID-19 testing, a rebound for in-person activity and no impact from variants/renewed shutdowns.”
8. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 82
Dividend Yield as of March 4: 0.58%
Third Point’s Stake Value: $739,703,000
Intuit Inc. (NASDAQ:INTU) is an American software company that specializes in financial software. According to Insider Monkey’s data, hedge fund interest spiked in the company in Q4. 82 hedge funds tracked by Insider Monkey held positions in Intuit Inc. (NASDAQ:INTU) in Q4, up from 64 in the previous quarter. These stakes hold a consolidated value of roughly $8 billion, showing considerable growth from $6.1 billion worth of stakes held by hedge funds in the preceding quarter.
Intuit Inc. (NASDAQ:INTU) currently pays a quarterly dividend of $0.68 per share, with a dividend yield of 0.58%, as of March 4. Though the company’s yield is comparatively low, it has been growing its dividends consistently since 2011. This January, BMO Capital initiated its coverage on Intuit Inc. (NASDAQ:INTU) with an Outperform rating and a $625 price target.
Third Point started investing in Intuit Inc. (NASDAQ:INTU) during the second quarter of 2020 and gradually strengthened its position in the company. In Q4 2021, the hedge fund increased its stake in the company by 5%, equaling roughly $740 million. Intuit Inc. (NASDAQ:INTU) represented 5.16% of Dan Loeb’s portfolio.
L1 Capital mentioned Intuit Inc. (NASDAQ:INTU) in its Q4 2021 investor letter. Here is what the investment management firm has to say:
“We trimmed our investment in Intuit following a period of strong share price performance. Our decision to reduce the size of Intuit’s position in the portfolio was solely due to our views on Intuit’s valuation relative to alternative investment opportunities, and reflects our valuation discipline, even for Quality 1 rated businesses. We would welcome the opportunity to increase our investment in Intuit should the share price fall further from current levels.”
7. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 96
Dividend Yield as of March 4: 1.19%
Third Point’s Stake Value: $396,691,000
In Q4 2021, Third Point increased its stake in UnitedHealth Group Incorporated (NYSE:UNH) by 17% and held stakes worth roughly $400 million. The American healthcare and insurance company constituted 2.76% of Dan Loeb’s portfolio in Q4.
With stakes worth roughly $2 billion, GQG Partners was the largest shareholder of UnitedHealth Group Incorporated (NYSE:UNH) in Q4. Along with this, 96 hedge funds in Insider Monkey’s database held stakes in the company in Q4, up from 95 in the previous quarter. The total value of these stakes is over $13.6 billion.
Appreciating the Q4 results of UnitedHealth Group Incorporated (NYSE:UNH), which fell in line with the company’s guidance, in January, Raymond James raised its price target on the stock to $540, while maintaining a Strong Buy rating on the shares. In 2021, UnitedHealth Group Incorporated (NYSE:UNH) grew its quarterly dividend by 16% at $1.45 per share. The stock’s dividend yield stood at 1.19%, as recorded on March 4. The company maintains a 12-year streak of consistent dividend growth.
Third Point Management mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2021 investor letter. Here is what the firm has to say:
“UnitedHealth is one of the largest healthcare companies in the world and a market leader in both its insurance and healthcare services (Optum) businesses. We initiated our position during the 2020 Presidential election at a time of heightened political and regulatory uncertainty.
We believe under its new CEO, Andrew Witty, UnitedHealth can not only preserve its market dominance and sustain industry-leading growth rates across most of its key segments but also enter new healthcare services markets. Witty is known as a mission-driven CEO who clearly articulates his view that providing high-quality, affordable health care services is a social good. He receives consistently high marks from former colleagues, and we believe that his leadership approach will ballast and even strengthen UNH’s already impressive management and employee ranks. The insurance and services businesses are synergistic and complementary, which entrenches United’s critical role in care financing, access, and management. This dynamic gives us confidence in the durability of United’s market leadership…” (Click here to see the full text)
6. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 50
Dividend Yield as of March 4: 1.22%
Third Point’s Stake Value: $518,188,000
Accenture plc (NYSE:ACN) is an Ireland-based multinational information technology company. This January, Goldman Sachs initiated its coverage on the stock with a Neutral rating and a $446 price target. The firm expected the company to benefit from increased IT services spending and also appreciated its management and execution.
In 2021, Accenture plc (NYSE:ACN) hiked its quarterly dividend by 10% at $0.97 per share, with a dividend yield of 1.22%, as of March 4. The company maintains a 16-year track record of consistent dividend growth. In Q4 2021, Accenture plc (NYSE:ACN) was the latest acquisition of Third Point, as the hedge fund started building its position in the company with stakes worth over $518 million. The company accounted for 3.61% of Dan Loeb’s portfolio. Besides Accenture plc (NYSE:ACN), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) are some other major blue-chip holdings of Third Point in Q4.
By the end of Q4 2021, 50 hedge funds tracked by Insider Monkey reported owning stakes in Accenture plc (NYSE:ACN), down from 56 in the previous quarter. These stakes hold a consolidated value of over $5.1 billion.
Polen Capital mentioned Accenture plc (NYSE:ACN) in its Q3 2021 investor letter. Here is what the firm has to say:
“Accenture continue to perform well as the business has grown through the pandemic. Accenture has benefited as businesses around the world have sought a trusted partner to enable their digital transformation. Those leading in the new world are accelerating investment, while those lagging are investing to close the gap. These are two great examples of the pandemic accelerating trends that were already in motion, making leaders more resilient.”
5. CF Industries Holdings, Inc. (NYSE:CF)
Number of Hedge Fund Holders: 58
Dividend Yield as of March 4: 1.38%
Third Point’s Stake Value: $88,084,000
CF Industries Holdings, Inc. (NYSE:CF), an American manufacturing company, experienced a positive hedge fund sentiment in Q4 2021, as 58 hedge funds tracked by Insider Monkey held stakes in the company, up from 49 in the previous quarter. The total worth of these stakes is over $1.54 billion.
CF Industries Holdings, Inc. (NYSE:CF) currently pays a quarterly dividend of $0.30 per share, with a dividend yield of 1.38%, as of March 4. In Q4 2021, Third Point held a stake worth over $88 million in CF Industries Holdings, Inc. (NYSE:CF), after increasing its position by 25%. The company represented 0.61% of Dan Loeb’s 13F portfolio.
On February 28, Piper Sandler’s analyst, Charles Neivert, presented a constructive view of nitrogen markets. Given this, the analyst raised its price target on CF Industries Holdings, Inc. (NYSE:CF) to $88, with an Overweight rating on the shares.
4. DuPont de Nemours, Inc. (NYSE:DD)
Number of Hedge Fund Holders: 56
Dividend Yield as of March 4: 1.72%
Third Point’s Stake Value: $267,431,000
DuPont de Nemours, Inc. (NYSE:DD) is an American company that provides tech-based solutions to its consumers. On February 8, the company announced a 10% increase in its quarterly dividend at $0.33 per share. The stock’s dividend yield, as recorded on March 4, stood at 1.72%. Moreover, DuPont de Nemours, Inc. (NYSE:DD) paid over $0.3 billion in dividends to shareholders through 2021.
Appreciating the company’s balanced execution, in February, Mizuho raised its price target on DuPont de Nemours, Inc. (NYSE:DD) to $101, with a Buy rating on the shares. In Q4 2021, Third Point increased its stake in DuPont de Nemours, Inc. (NYSE:DD) by 12% and held shares worth over $267.4 million. The company accounted for 1.86% of Dan Loeb’s portfolio.
By the end of Q4 2021, 56 hedge funds tracked by Insider Monkey held stakes in DuPont de Nemours, Inc. (NYSE:DD), valued at roughly $2 billion. In comparison, 51 hedge funds held stakes in the company in the preceding quarter, worth $1.5 billion. 40 North Management held the largest position in DuPont de Nemours, Inc. (NYSE:DD) in Q4, with stakes worth $454.3 million.
Rhizome Partners mentioned DuPont de Nemours, Inc. (NYSE:DD) in its Q1 2021 investor letter. Here is what the firm has to say:
“We have written extensively about the anticipated DuPont’s Reverse Morris Trust merger with International Flavors and Fragrances (IFF) in January of 2021. During the quarter, DuPont shares traded up significantly in anticipation of the deal. We tendered about 40% of our DuPont shares for IFF and received about half of the allocation due to pro-ration. Investors are finally starting to appreciate DuPont’s effort to cut costs, streamline operations, and spin off companies into pure-play companies that trade at higher multiples. We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as DuPont.”
3. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders: 46
Dividend Yield as of March 4: 2.01%
Third Point’s Stake Value: $108,505,000
EQT Corporation (NYSE:EQT), an American energy company, is one of the recent acquisitions of Third Point in Q4. The hedge fund started building its position in the company with a stake worth over $108.5 million. The company accounted for 0.75% of Dan Loeb’s portfolio.
In 2021, EQT Corporation (NYSE:EQT) temporarily suspended its dividends to prioritize its debt repayment. However, in February, the company announced the reinstatement of its quarterly dividend at $0.125 per share. As of March 4, the stock’s dividend yield stood at 2.01%. In January, Truist set a $31 price target on EQT Corporation (NYSE:EQT), with a Buy rating on the shares, as the firm raised its oil price targets for 2022 and 2023.
The number of hedge funds tracked by Insider Monkey holding stakes in EQT Corporation (NYSE:EQT) declined to 46 in Q4, from 57 in the preceding quarter. The total value of these stakes is over $1.21 billion.
2. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 80
Dividend Yield as of March 4: 2.29%
Third Point’s Stake Value: $100,660,000
This January, Cowen raised its price target on Comcast Corporation (NASDAQ:CMCSA), an American tech company, to $64 and appreciated the company’s free cash flow and growth after the pandemic. The firm maintained an Outperform rating on the shares.
First Eagle Investment Management was the largest shareholder of Comcast Corporation (NASDAQ:CMCSA) in Q4, holding a stake worth roughly $1.5 billion. Overall, 80 hedge funds tracked by Insider Monkey held stakes in the company in Q4, up from 75 in the previous quarter. The total value of these stakes is over $8.6 billion.
In January, Comcast Corporation (NASDAQ:CMCSA) announced an 8% increase in its quarterly dividend at $0.27 per share, with a dividend yield of 2.29%, as recorded on March 4. This marked the company’s 14th consecutive year of dividend growth. Third Point started building its position in Comcast Corporation (NASDAQ:CMCSA) during the fourth quarter of 2021, with shares worth over $100.6 million. The company represented 0.7% of Dan Loeb’s portfolio.
Artisan Partners mentioned Comcast Corporation (NASDAQ:CMCSA) in its Q4 2021 investor letter. Here is what the firm has to say:
“Comcast is the leading broadband cable company in North America and a global content producer. Comcast and other cable companies are seeing decreased net subscriber additions as they are lapping tough comparisons from a year ago when net additions were high earlier in the pandemic. Interestingly, churn remains at record low levels—a positive metric that speaks to cable’s value proposition. For Comcast, an additional headwind is a delayed recovery in its theme parks business due to the ongoing pandemic. Additionally, increased investment in 5G by wireless competitors may be weighing on shares. However, 5G is not currently competitive with cable, and based on the economics of 5G capex, it’s unlikely to be competitive for many years, if ever. Cable continues to have a competitive advantage with respect to network speeds and reliability. High recurring revenue, pricing power and low capital intensity make for a powerful economic model that contribute to Comcast’s free cash flow generation, allowing the company to play offense with regards to capital allocation. In summary, Comcast is a well-financed business with a wide competitive moat, that trades cheaply at under 13X our estimate of normalized earnings.”
1. The AES Corporation (NYSE:AES)
Number of Hedge Fund Holders: 41
Dividend Yield as of March 4: 2.95%
Third Point’s Stake Value: $139,725,000
In Q4 2021, Third Point Capital increased its stake significantly by 54% in The AES Corporation (NYSE:AES), an American energy company. The hedge fund held shares worth roughly $140 million in the company, which accounted for 0.97% of Dan Loeb’s portfolio.
The AES Corporation (NYSE:AES) currently pays a quarterly dividend of $0.158 per share, having raised it by 5% in December 2021. The stock’s dividend yield stood at 2.95%, as of March 4. This January, Morgan Stanley raised its price target on The AES Corporation (NYSE:AES) to $32, while keeping an Overweight rating on the shares.
At the end of Q4 2021, 41 hedge funds tracked by Insider Monkey held stakes in The AES Corporation (NYSE:AES), down from 47 in the previous quarter. These stakes hold a consolidated value of over $1.5 billion.
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Disclosure. None. 10 Dividend Stocks to Buy According to Billionaire Dan Loeb’s Third Point is originally published on Insider Monkey.
