In this article, we will look at the 5 favorite dividend aristocrats of journalist investor, Jim Cramer. If you want to explore more dividend aristocrats that Cramer is recommending to own for the second half of 2022, you can also read Jim Cramer’s 10 Favorite Dividend Aristocrats.
5. General Dynamics Corporation (NYSE:GD)
Number of Hedge Fund Holders: 42
Dividend Yield as of September 12: 2.24%
Cramer likes General Dynamics Corporation (NYSE:GD) and sees the stock benefitting from the political turmoil in Europe. He is confident about the company’s leadership that “knows what’s needed in a less secure world”. General Dynamics Corporation (NYSE:GD) boasts a track record of 27 consecutive years of growing its dividends and has a 5-year dividend CAGR of 8.90%, with a payout ratio of 41.5%.
On August 3, General Dynamics Corporation (NYSE:GD) declared a quarterly cash dividend of $1.26 per share. The dividend is payable on November 10 to investors of record at the close of business on October 7. As of September 12, the stock is offering a forward dividend yield of 2.24% and the company has free cash flows of $4.83 billion.
This August, RBC Capital analyst Ken Herbert initiated coverage of General Dynamics Corporation (NYSE:GD) with a $275 price target and an Outperform rating. The analyst noted that investing in General Dynamics Corporation (NYSE:GD) is investing in “a leading global brand at an attractive valuation”.
At the end of the second quarter of 2022, 42 hedge funds were long General Dynamics Corporation (NYSE:GD) with stakes worth $7.7 billion. As of June 30, Longview Asset Management owns over 30 million shares of General Dynamics Corporation (NYSE:GD) and is the largest shareholder in the company.
Here is what Oakmark Fund had to say about General Dynamics Corporation (NYSE:GD) in its second-quarter 2022 investor letter:
“Finally, General Dynamics Corporation (NYSE:GD)’s defense business enabled the stock to resist the bear market’s downward pressure. We eliminated the position to fund more attractive holdings.”
4. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 45
Dividend Yield as of September 12: 2.63%
Jim Cramer is bullish on Caterpillar Inc. (NYSE:CAT) and noted that the stock is undervalued. As of September 12, Caterpillar Inc. (NYSE:CAT) has a trailing twelve-month PE ratio of 15.4 and is offering a forward dividend yield of 2.63%, which the company supports with free cash flows of more than $3 billion.
On August 2, Caterpillar Inc. (NYSE:CAT) announced earnings for the second quarter of fiscal 2022. The company reported earnings per share of $3.18 and beat EPS estimates by $0.16. The company’s revenue for the quarter amounted to $14.25 billion, up 10.5% year over year.
On August 31, Baird analyst Mircea Dobre reiterated his buy-side Outperform rating and $224 price target on Caterpillar Inc. (NYSE:CAT).
At the close of Q2 2022, 45 hedge funds held stakes in Caterpillar Inc. (NYSE:CAT) worth 3.25 billion. Of those, Fisher Asset Management was the leading shareholder with stakes of roughly $1.34 billion. The investment covers 0.94% of Ken Fisher’s 13F portfolio.
Here is what Diamond Hill Capital had to say about Caterpillar Inc. (NYSE:CAT) in its first-quarter 2022 investor letter:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
3. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 60
Dividend Yield as of September 12: 2.84%
The Coca-Cola Company (NYSE:KO) is a “textbook defensive stock” according to Jim Cramer. The journalist investor thinks the stock offers protection for investors in a slowing economy. The Coca-Cola Company (NYSE:KO) has been growing its dividends for roughly 60 years and boasts a 5-year dividend CAGR of 3.62% and a payout ratio of 70.5%.
On July 21, The Coca-Cola Company (NYSE:KO) declared a quarterly cash dividend of $0.44 per share of the company’s common stock. The dividend is payable on October 3 to investors of record on September 16. As of September 12, the stock is offering a forward dividend yield of 2.84%, which the company backs with free cash flows of $10 billion.
On July 26, The Coca-Cola Company (NYSE:KO) announced earnings for the second quarter of fiscal 2022. The company reported earnings per share of $0.70 and beat estimates by $0.03. The company generated a revenue of $11.3 billion and beat expectations by $737 million.
This September, HSBC analyst Carlos Laboy raised his price target on The Coca-Cola Company (NYSE:KO) to $76 from $72 and reiterated a Buy rating on the shares. The analyst noted that the company has new revenue drivers in Latin American markets.
At the close of Q2, 60 hedge funds were bullish on The Coca-Cola Company (NYSE:KO) with stakes worth $28.3 billion. As of June 30, Berkshire Hathaway owns 400 million shares of The Coca-Cola Company (NYSE:KO) and is the largest investor in the company. The investment covers 8.38% of Warren Buffett’s 13F portfolio.
2. Federal Realty Investment Trust (NYSE:FRT)
Number of Hedge Fund Holders: 24
Dividend Yield as of September 12: 4.26%
Jim Cramer likes Federal Realty Investment Trust (NYSE:FRT) because of the REIT’s portfolio of mixed-use suburban properties, which the journalist investor sees as recession-proof. Cramer also noted that he likes the stock’s dividend yield, which as of September 12, sits at 4.26%.
On August 4, Federal Realty Investment Trust (NYSE:FRT) announced earnings for the fiscal second quarter of 2022. The company reported funds from operations of $1.65 and beat expectations by $0.16. The company’s revenue for the quarter amounted to $286.8 million, up 14.3% year over year, and outperformed Wall Street estimates by $13 million.
Shortly after its earnings release, Federal Realty Investment Trust (NYSE:FRT) declared a quarterly cash dividend of $1.08 per share up 1% from its prior dividend of $1.07. The dividend is payable on October 17 to shareholders of record on September 22.
On August 22, Truist analyst Ki Bin Kim revised his price target on Federal Realty Investment Trust (NYSE:FRT) to $120 from $125 and maintained a Hold rating on the shares.
At the end of the second quarter of 2022, 24 hedge funds were long Federal Realty Investment Trust (NYSE:FRT) and held stakes worth $199.8 million in the company.
1. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 19
Dividend Yield as of September 12: 4.45%
Jim Cramer is bullish on the monthly dividend company Realty Income Corporation (NYSE:O) because the REIT’s primary clients include drugstores, departmental stores, and dollar stores among others. He likes the stock’s high dividend yield, which as of September 12 sits at 4.45%.
On August 16, Realty Income Corporation (NYSE:O) declared a monthly cash dividend of $0.2475 per share. The dividend is payable on September 15 to investors of record at the close of business on September 1. As of September 12, Realty Income Corporation (NYSE:O) has free cash flows of roughly $2 billion to support its monthly dividends.
Wall Street is bullish on Realty Income Corporation (NYSE:O). On June 22, Credit Suisse analyst Tayo Okusanya initiated coverage of Realty Income Corporation (NYSE:O) with a buy-side Outperform rating and a $75 price target. On June 30, Jefferies analyst Jonathan Petersen revised his price target on Realty Income Corporation (NYSE:O) to $78 from $81 and maintained a Buy rating on the shares.
At the end of Q2, 19 hedge funds were eager on Realty Income Corporation (NYSE:O) and held stakes worth $200.7 million in the company. Of those, Zimmer Partners was the most prominent investor with stakes worth $51 million.
You can also take a look at Jim Cramer’s Top 10 Stock Picks for 2022 and 10 Best Jim Cramer Stocks To Buy Today.
