Dividend Stock Portfolio: Top 5 Stock Picks By Hedge Funds

3. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 137

Dividend Yield as of November 2: 0.60%

Next on our list of the top contenders for a dividend stock portfolio is Mastercard Incorporated (NYSE:MA), the American payments technology provider. On October 27, Mastercard Incorporated (NYSE:MA) reported its Q3 results, posting earnings per share of $2.68, beating analysts’ estimates by $0.11. The revenue of $5.76 billion climbed 15.47% year-over-year, topping market consensus by $100.06 million. 

On November 1, Mizuho analyst Dan Dolev maintained a Buy recommendation on Mastercard Incorporated (NYSE:MA) but trimmed the firm’s price target on the shares to $380 from $385 following the Q3 results. The analyst lifted 2022 estimates but slashed outer-year expectations.

According to Insider Monkey’s data, 137 hedge funds were bullish on Mastercard Incorporated (NYSE:MA) at the end of June 2022, compared to 136 funds in the preceding quarter. Charles Akre’s Akre Capital Management is the largest stakeholder of the company, with 5.8 million shares valued at $1.85 billion. 

Here is what L1 Capital International specifically said about Mastercard Incorporated (NYSE:MA) in its Q2 2022 investor letter:

“Growth in electronic payments, the continued shift away from cash and cheques, and the provision of additional services such as fraud identification and prevention continue to power Mastercard Incorporated (NYSE:MA)’s growth (Figure 14). In person cross-border transactions are recovering alongside normalization of travel.

Mastercard and Visa (we have invested in both) continue to dominate the electronic payments industry outside of China, utilizing their own multi-faceted networks as well as Government and third-party payments infrastructure to facilitate transactions. Another perfect example of a ‘Noah’s Ark’ industry structure.

Regulation, technological disruption and disintermediation, and geopolitical constraints are perennial issues for consideration, but Mastercard (and Visa) management have repeatedly demonstrated their ability to manage these issues…” (Click here to read the full text)