In this article, we discuss 10 dividend stocks in Clint Carlson’s portfolio.
Clint Carlson’s Carlson Capital reported above-average returns in 2021, gaining 13.3%, compared with an average hedge fund return of 10% during the year. The hedge fund now manages $1.5 billion in assets.
Clint Carlson founded Carlson Capital in 1993 with the sole objective of following a multi-strategy approach to investing. Before founding Carlson Capital, Mr. Carlson worked as the head of risk arbitrage at Bass Brothers and also co-managed the risk arbitrage fund at Maxxam Group and affiliate companies from 1985 to 1988. He is currently serving as the President and the Chief Investment Officer of the hedge fund. The fund sustained its performance since its inception, returning 39% in 2010 with a $1 billion bet on distressed mortgage bonds, as reported by Wall Street Journal. The firm’s Black Diamond Arbitrage Fund follows one of the multidimensional approaches of the hedge fund and invests in merger opportunities. In 2021, it returned 8.4% to shareholders, with over $666 million in assets. Despite the challenges faced by the hedge fund, it reported a good start in 2022, as its flagship fund, Double Black Diamond, returned 3.94% in April, with $600 million in assets.
As of Q1 2022, Carlson Capital holds a 13F portfolio valued at over $1.47 billion, down from $1.73 billion in the previous quarter. The hedge fund made major investments in technology, finance, services, and basic material sectors. Some of the hedge fund’s major holdings include Bank of America Corporation (NYSE:BAC), Morgan Stanley (NYSE:MS), and Dell Technologies Inc. (NYSE:DELL).
Clint Carlson of Carlson Capital
Our Methodology:
In this article, we discuss the best dividend stocks in Clint Carlson’s portfolio. The data used in this list has been derived from Carlson Capital’s 13F portfolio, as of Q1 2022.
Clint Carlson’s Carlson Capital Portfolio: 10 Dividend Stock Picks
10. Cerner Corporation (NASDAQ:CERN)
Number of Hedge Fund Holders: 64
Dividend Yield as of May 29: 1.14%
Carlson Capital’s Stake Value: $77,187,000
Cerner Corporation (NASDAQ:CERN) is an American technology company that supplies health information technology services, devices, and hardware to consumers. The company’s products are used in over 27,000 facilities around the world. In Q1 2022, the company posted an EPS of $0.89, which beat the analysts’ expectations by $0.02. However, its revenue of $1.43 billion missed estimates by $40 million.
Carlson Capital initiated its position in Cerner Corporation during the fourth quarter of 2021, with shares worth over $44 million. At the end of Q1 2022, the hedge fund owned shares worth over $77 million in the company, buying additional 350,000 shares during the quarter. Cerner Corporation was the second-largest holding of Carlson Capital and represented 5.28% of its 13F portfolio.
In December 2021, Cerner Corporation increased its quarterly dividend by 23% to $0.27 per share. The stock’s dividend yield, as of May 29, stood at 1.14%. The company initiated a dividend in 2019 and has raised it twice since. Unlike major stocks such as Bank of America Corporation, Morgan Stanley, and Dell Technologies Inc., Cerner Corporation’s performance has been stable, returning 2.8% in 2022 so far.
At the end of March 31, 64 hedge funds tracked by Insider Monkey reported owning stakes in Cerner Corporation, up from 61 in the previous quarter. These stakes hold a consolidated value of over $4 billion, showing considerable growth from $2.9 billion worth of stakes held by hedge funds in Q4 2021.
9. Wintrust Financial Corporation (NYSE:WTFC)
Number of Hedge Fund Holders: 28
Dividend Yield as of May 29: 1.55%
Carlson Capital’s Stake Value: $17,638,000
Wintrust Financial Corporation (NYSE:WTFC), an American financial holding company, was the latest addition to Carlson Capital’s portfolio. The hedge fund started building its position in the company with 189,800 shares, valued at over $17.6 million. The company accounted for 1.2% of Clint Carlson’s portfolio.
Insider Monkey’s Q1 2022 database shows that Carlson Capital isn’t the only hedge fund that initiated its position in Wintrust Financial Corporation, as the number of hedge funds owning stakes in the company grew to 28, from 24 in the previous quarter. These stakes hold a consolidated value of over $314.5 million. Fisher Asset Management was the largest shareholder of the Illinois-based company in Q1 2022, with shares worth over $60.4 million.
Wintrust Financial Corporation currently pays a quarterly dividend of $0.34 per share, having raised it by 9.7% in January this year. The stock’s dividend yield was recorded at 1.55% on May 29.
This April, UBS lifted its price target on Wintrust Financial Corporation to $95, with a Neutral rating on the shares, as the company reported a 9% loan growth in its first-quarter results.
8. Diamondback Energy, Inc. (NASDAQ:FANG)
Number of Hedge Fund Holders: 47
Dividend Yield as of May 29: 1.83%
Carlson Capital’s Stake Value: $9,020,000
Diamondback Energy, Inc. (NASDAQ:FANG) is an American energy company that specializes in the exploration of hydrocarbon. The company is also focused on the acquisition and development of oil and natural gas reserves.
In May, Diamondback Energy, Inc. announced a 16.7% hike in its quarterly dividend to $0.70 per share. The stock’s dividend yield stood at 1.83%, as of the close of May 28. Along with this, the company also declared a variable cash dividend of $2.35 per share for the first quarter of 2022.
In Q1 2022, Diamondback Energy, Inc. posted revenue of $2.41 billion, reflecting a 104% year-over-year growth. The company’s Q1 results have the analysts confident about its cash returns in 2022 and considering this, in May, Barclays upgraded Diamondback Energy, Inc. to Overweight, while lifting the stock’s price target to $162. At the end of Q1 2022, Carlson Capital owned a stake worth over $9 million in Diamondback Energy, Inc., which represented 0.61% of Clint Carlson’s portfolio.
At the end of Q1 2022, 47 hedge funds tracked by Insider Monkey reported owning stakes in Diamondback Energy, Inc., up from 45 in the previous quarter. These stakes hold a consolidated value of over $887 million, compared with a $572.4 million worth of stake held by hedge funds in Q4 2021.
Miller Value Partners mentioned Diamondback Energy, Inc. in its Q4 2021 investor letter. Here is what the firm has to say:
“Diamondback Energy (FANG) returned 14.4% in the quarter as oil price rose and fell during the quarter ending the period largely in the same place that it started. The company reported strong 3Q results beating on the top and bottom line. The company reported revenue of $1.9B beating consensus of $1.5B with EPS of $2.94 beating expectations for $2.79. The beat was driven by a combination of higher volumes, higher realizations, and efficiency gains. The company increased its total production guidance for the year to 370-372mboe/d1 (up from 363-370mboe/d) while lowering Capital Expenditure (CAPEX) guidance for the second time this year to $1.49-1.53B. The company raised the dividend for the third time this year to $2/share annually while authorizing a new $2B share repurchase program. Starting in 4Q21, the company plans to return 50% of Free Cash Flow to shareholders through the base dividend and a combination of buybacks and special dividends. Finally, the CEO Travis Stice announced plans to reduce methane emissions by 70% as part of the firm’s ESG initiative.”
7. Brunswick Corporation (NYSE:BC)
Number of Hedge Fund Holders: 37
Dividend Yield as of May 29: 1.83%
Carlson Capital’s Stake Value: $8,760,000
Brunswick Corporation (NYSE:BC) is an American company that manufactures and develops a wide range of products, especially in the marine industry. In Q1 2022, the company reported solid results, posting an EPS of $2.53, which beat the market estimates by $0.20. The company’s revenue of $1.7 billion presented a 19% growth from the same period last year.
Carlson Capital initiated its position in Brunswick Corporation during Q1 2022, with shares worth over $8.7 million. The company accounted for 0.59% of Clint Carlson’s portfolio. In April, Raymond James lifted its price target on Brunswick Corporation to $123, with an Outperform rating on the shares, highlighting the company’s solid quarterly earnings.
In February, Brunswick Corporation announced a 9% growth in its quarterly dividend to $0.365 per share. This was the company’s tenth consecutive year of dividend growth. As of May 29, the stock’s dividend yield stood at 1.83%.
The number of hedge funds tracked by Insider Monkey holding positions in Brunswick Corporation declined to 37 in Q1 2022, from 42 in the previous quarter. These stakes hold a consolidated value of over $1.1 billion. Among these hedge funds, Cantillon Capital Management was the company’s largest stakeholder, owning shares worth roughly $333.5 million.
6. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 93
Dividend Yield as of May 29: 2.18%
Carlson Capital’s Stake Value: $24,565,000
Carlson Capital resumed building its position in Wells Fargo & Company during the fourth quarter of 2021, after dumping off its entire stake in the company a quarter earlier. At the end of Q1 2022, the hedge fund owned over half a million shares in Wells Fargo & Company, valued at over $24.5 million.
In April, Barclays raised its price target on Wells Fargo & Company to $64, with an Overweight rating on the shares as the company raised its loan growth and net interest income outlook for 2022. In January, Wells Fargo & Company announced a 25% hike in its quarterly dividend to $0.25 per share. The stock’s dividend yield, as of May 29, stood at 2.18%.
Like Bank of America Corporation and Morgan Stanley, Wells Fargo & Company is a notable stock gaining investors’ attention these days.
At the end of March 31, 93 hedge funds in Insider Monkey’s database held stakes in Wells Fargo & Company, valued at over $6.8 billion. In comparison, 94 hedge funds held stakes in the company in the previous quarter, worth over $6.1 billion. Theleme Partners owned the largest stake in the company in Q1 2022, worth over $884.7 million.
Davis Funds mentioned Wells Fargo & Company in its Q4 2021 investor letter. Here is what the firm has to say:
“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Wells Fargo.”
5. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 99
Dividend Yield as of May 29: 2.27%
Carlson Capital’s Stake Value: $11,426,000
Bank of America Corporation was one of the latest additions to Carlson Capital’s portfolio in Q1. The hedge fund initiated a position in the company with shares worth roughly $11.5 million. The company constituted 0.78% of Clint Carlson’s portfolio.
The number of hedge funds tracked by Insider Monkey holding positions in Bank of America Corporation grew to 99 in Q1 2022, from 84 in the previous quarter. The total value of these stakes is roughly $45.5 billion. Warren Buffett’s Berkshire Hathaway was one of the largest shareholders of the North Carolina-based company, with a stake worth over $41.6 billion.
Bank of America Corporation currently pays a quarterly dividend of $0.21 per share, with a dividend yield of 2.27%, as of May 29. The company raised its quarterly dividend last year in June by 17%. In May, Oppenheimer appreciated the consistent dividends of Bank of America Corporation and set a $50 price target on the stock, while maintaining an Outperform rating on the shares.
Miller Value Partners mentioned Bank of America Corporation in its Q1 2022 investor letter. Here is what the firm has to say:
“There are many times when volatility and beta give false signals. Banks outperformed in the post-tech bubble bear market of the early 2000s. At the market peak prior to the financial crisis (when risk was the highest in those names!), Bank of America (NYSE:BAC) had a 0.9x beta (based on the trailing 5 years) suggesting its “risk” was below the market’s. Wrong! It massively underperformed in the financial crisis. Realized beta over the 5 years from the pre-crisis’ 2006 peak measured 2.3x.
A much better indicator of actual risk, both before and after the financial crisis, was the quality of the balance sheet and risk-taking appetite. Beta is backwards looking and non-stationary. Relying on it underestimated risk going into the financial crisis and overestimated coming out of it (its beta has continued to fall over the past decade).
We care greatly about risk. We spend a significant amount of time thinking about the risks to our investments. We measure risk as permanent impairment of capital, which means the prices and values don’t bounce back. Business fundamentals determine risk.”
4. First Horizon Corporation (NYSE:FHN)
Number of Hedge Fund Holders: 44
Dividend Yield as of May 29: 2.60%
Carlson Capital’s Stake Value: $29,128,000
First Horizon Corporation (NYSE:FHN), an American bank holding company, remained popular among hedge funds in Q1 2022, as 44 hedge funds in Insider Monkey’s database held positions in the company, up from 24 in the previous quarter. The consolidated value of these stakes is over $1.05 billion, showing significant growth from a $170.6 million worth of stake held by hedge funds in Q4 2021.
In Q1 2022, First Horizon Corporation posted an EPS of $0.38 in Q1 2022, surpassing expectations by $0.03. However, the company’s revenue of $704 million missed estimates by $3.92 million. The company currently pays a quarterly dividend of $0.15 per share, with a dividend yield of 2.60%, as of May 29. First Horizon Corporation has not raised its dividend since 2020, however, the company sustained its dividend payments over the years.
Carlson Capital initiated its position in First Horizon Corporation during the first quarter of 2022, purchasing over 1.2 million shares, worth over $29 million. The company accounted for 1.99% of Clint Carlson’s portfolio.
3. PNM Resources, Inc. (NYSE:PNM)
Number of Hedge Fund Holders: 37
Dividend Yield as of May 29: 2.93%
Carlson Capital’s Stake Value: $19,573,000
PNM Resources, Inc. (NYSE:PNM) is a New Mexico-based energy and electric services company. In Q1 2022, the company reported earnings above consensus, posting an EPS of $0.50, beating expectations by $0.12. The company generated revenue of $444.12 million versus the estimates of $382 million.
Carlson Capital resumed building its position in PNM Resources, Inc. during the fourth quarter of 2020, after pulling off its entire stakes in 2011. At the end of Q1 2022, the hedge fund owned a roughly $20 million worth of stake in the company, which represented 1.33% of Clint Carlson’s portfolio.
Along with Carlson Capital, 37 hedge funds in Insider Monkey’s database held stakes in PNM Resources, Inc. in Q1 2022, up from 32 in the previous quarter. The collective value of these stakes is over $876.4 million.
In February, PNM Resources, Inc. announced a 6% hike in its quarterly dividend to $0.3475 per share. The stock’s dividend yield, as of May 29, came to be recorded at 2.93%.
2. The PNC Financial Services Group, Inc. (NYSE:PNC)
Number of Hedge Fund Holders: 49
Dividend Yield as of May 29: 3.43%
Carlson Capital’s Stake Value: $25,674,000
The PNC Financial Services Group, Inc. (NYSE:PNC) is an American bank holding company and financial services corporation. The company has been paying dividends to shareholders consecutively for the past 30 years, compared with a sector average of 13 years. In April, The PNC Financial Services Group, Inc. announced a quarterly dividend of $1.50 per share, presenting a 20% growth from its previous dividend. The stock’s dividend yield stood at 3.43%, as of the close of May 29.
Carlson Capital increased its position in The PNC Financial Services Group, Inc. by 28% during the first quarter of 2022. The hedge fund owned 139,193 shares in the company, valued at over $25.6 million. The company represented 1.75% of Clint Carlson’s portfolio. In May, Wolfe Research set a $177 price target on The PNC Financial Services Group, Inc., with an Outperform rating on the shares.
As per Insider Monkey’s Q1 2022 database, 49 hedge funds held positions in The PNC Financial Services Group, Inc., with stakes valued at roughly $1.5 billion. In comparison, 40 hedge funds owned stakes in the Pennsylvania-based company in the previous quarter, worth over $663 million.
1. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 74
Dividend Yield as of May 29: 5.21%
Carlson Capital’s Stake Value: $14,655,000
Though AT&T Inc. surpassed analysts’ estimates in its subscribers’ growth in the first quarter of 2022, its revenue of $38.1 billion missed the market estimates by $190 million. However, the telecommunications company reported a 5% year-over-year growth in its services revenue at $14.7 billion, driven by subscribers’ growth.
In March, AT&T Inc. announced a quarterly dividend of $0.2775 per share, after it acquired a position in Warner Bros. Discovery. The company maintains a 35-year track record of consistent dividend growth. As of the close of May 29, the stock’s dividend yield was recorded at 5.21%.
At the end of Q1 2022, 74 hedge funds tracked by Insider Monkey were bullish on AT&T Inc., up from 70 in the previous quarter. The collective value of these stakes is over $4 billion. With a stake worth over $678.5 million, Arrowstreet Capital owned the largest position in the Texas-based company in Q1 2022.
In April, Goldman Sachs initiated its coverage on AT&T Inc. with a $23 price target and a Buy rating on the shares, highlighting the company’s communications-focused business model.
At the end of Q1 2022, Carlson Capital owned a stake worth over $14.6 million in AT&T Inc., after purchasing roughly half a million additional shares in the company during the quarter. The company accounted for 1% of Clint Carlson’s portfolio.
Weitz Investment Management mentioned AT&T Inc. in its Q4 2021 investor letter. Here is what the firm has to say:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
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This article is originally published at Insider Monkey.
