In this article, we discuss the 10 best dividend stocks according to Thomas Steyer’s Farallon Capital. You can skip our detailed analysis of the hedge fund and its recent developments, and go directly to read 5 Best Dividend Stocks According to Thomas Steyer’s Farallon Capital.
Thomas Steyer’s investment career started as soon as he graduated from Yale University in 1979. He founded Farallon Capital in 1986 and ran the hedge fund for 26 years. In 2012, he left the fund to focus more on politics and climate.
As of January 2022, Steyer’s real-time net worth stands at $1.4 billion.
Steyer’s investment philosophy takes its inspiration from Warren Buffett, who also believes that consistency is crucial when managing a diversified portfolio. As mentioned before, Steyer shifted his focus to environment-related issues as soon as he announced his retirement from Farallon Capital. His first step in this regard was the formation of NextGen Climate in 2012, whose main aim was to prevent climate disasters.
In 2020, Steyer announced the launch of a climate investment fund, Galvanize Climate Solutions, that will focus on decarbonization efforts. Along with this, the fund will also expand on the Movement Capitalism, which will be used to address the climate crisis. As of Q3 2021, Farallon Capital has a portfolio value of over $19.7 billion. The hedge fund invests in services, healthcare, and technology, among other sectors. In this article, we will focus on the dividend stocks in Farallon Capital’s portfolio. Some of those are Microsoft Corporation (NASDAQ:MSFT), Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and AbbVie Inc. (NYSE:ABBV).
Our Methodology:
In this article, we will mention some of the top dividend stocks in Farallon Capital’s portfolio. We considered the hedge fund’s 13F portfolio for this list. Along with this, we also paid attention to the hedge fund sentiment for each stock, analysts’ ratings and basic dividend policy of each company.
10. Ready Capital Corporation (NYSE:RC)
Number of Hedge Fund Holders: 13
Dividend Yield as of January 9: 10.49%
Ready Capital Corporation (NYSE:RC) is an American real estate investment trust that specializes in real estate-related investments. In Q3 2021, Farallon Capital holds shares worth $18 million in the company, which accounted for 0.09% of the hedge fund’s portfolio.
On December 14, Ready Capital Corporation (NYSE:RC) declared a quarterly dividend of $0.42 per share. The stock’s current dividend yield stands at 10.40%. Due to rising interest rates, recently, B. Riley raised its price target on Ready Capital Corporation (NYSE:RC) to $18, while maintaining a Buy rating on the shares.
At the end of Q3 2021, 13 hedge funds tracked by Insider Monkey reported owning stakes in Ready Capital Corporation (NYSE:RC), up from 11 in the previous quarter. The total value of these stakes is over $45.7 million.
Like famous stocks, such as Microsoft Corporation (NASDAQ:MSFT), Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and AbbVie Inc. (NYSE:ABBV), Ready Capital Corporation (NYSE:RC) is one of the most notable dividend stocks in Farallon Capital’s portfolio.
9. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 81
Dividend Yield as of January 9: 4.18%
An American biopharmaceutical company, AbbVie Inc. (NYSE:ABBV) is one of the recent acquisitions of Farallon Capital in Q3, which owns shares worth roughly $60 million. The company accounted for 0.26% of Farallon Capital’s portfolio.
On October 29, AbbVie Inc. (NYSE:ABBV) announced a 9% increase in its dividend at $1.41 per share, with a dividend yield of 4.18%. Since 2013, the company has increased its quarterly dividend by over 250% and has reported a 19.7% annual average increase in its dividend in the past five years. In Q3, AbbVie Inc. (NYSE:ABBV) posted an EPS of $3.33, beating estimates by $0.11. Keeping AbbVie Inc. (NYSE:ABBV) as one of its top picks in 2022, Mizuho lifted its price target on the stock to $154, while maintaining a Buy rating on the shares.
With shares worth $4.1 billion, 81 hedge funds tracked by Insider Monkey held positions in AbbVie Inc. (NYSE:ABBV) in Q3, down from 82 in the previous quarter. Warren Buffett’s Berkshire Hathaway was the company’s largest stakeholder in Q3, owning shares worth over $1.5 billion.
Miller Howard Investments mentioned AbbVie Inc. (NYSE:ABBV) in its Q3 2021 investor letter. Here is what the firm has to say:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”
8. The Sherwin-Williams Company (NYSE:SHW)
Number of Hedge Fund Holders: 44
Dividend Yield as of January 9: 0.68%
The Sherwin-Williams Company (NYSE:SHW) is an American company that manufactures and distributes paints, coatings, and other related products. Farallon Capital started investing in the company during the first quarter of 2019. In Q3 2021, The Sherwin-Williams Company (NYSE:SHW) accounted for 1.37% of Farallon Capital’s portfolio.
At the end of Q3 2021, 44 hedge funds tracked by Insider Monkey were bullish on The Sherwin-Williams Company (NYSE:SHW), down from 49 in the previous quarter. These stakes hold a consolidated value of over $1.57 billion. With shares worth roughly $324 million, Chilton Investment Company remained the company’s largest shareholder in Q3.
On October 20, The Sherwin-Williams Company (NYSE:SHW) announced a quarterly dividend of $0.55 per share, showcasing a 125% year-over-year growth. Moreover, the company has maintained a 42-year streak of consistent dividend growth, becoming one of the best stocks for dividend investors. Recently, BMO Capital lifted its price target on The Sherwin-Williams Company (NYSE:SHW) to $355, while keeping an Outperform rating on the shares, expecting improvement in the company’s supply chain issues.
Like Microsoft Corporation (NASDAQ:MSFT), Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and AbbVie Inc. (NYSE:ABBV), The Sherwin-Williams Company (NYSE:SHW) remained a popular dividend stocks among elite money managers in 2021.
7. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 143
Dividend Yield as of January 9: 0.69%
Visa Inc. (NYSE:V) saw a decline in the number of hedge funds having stakes in it. As of Q3 2021, 143 hedge funds tracked by Insider Monkey held stakes in the company, down from 162 in the previous quarter. These stakes hold a consolidated value of over $26.1 billion.
Currently, Visa Inc. (NYSE:V) offers a small dividend yield of 0.69% to investors but the company maintains a 14-year record of consistent dividend growth. On October 26, the company announced a 17% growth in its dividend at $0.375 per share. Recently, Mizuho set a $220 price target on Visa Inc. (NYSE:V), with a Neutral rating on the shares.
In Q3 2021, Farallon Capital held over 1.2 million shares in Visa Inc. (NYSE:V), valued at roughly $277 million. The company represented 1.4% of the hedge fund’s portfolio.
L1 Capital mentioned Visa Inc. (NYSE:V) in its Q3 2021 investor letter. Here is what the firm has to say:
“In our view, the payment network company, Visa, remains very well positioned to participate in an ever-expanding market for electronic payments. In time, ‘Buy now, Pay Later’ may have a modest impact on Visa’s transaction volumes, however, in aggregate, we believe it will have the greater effect of supporting growth in electronic payments more broadly. In the nearer term, we believe the recovery in international travel as the world gradually normalizes and learns to live with COVID-19 will be materially positive for Visa’s financial performance. eCommerce will also remain a positive key driver for Visa growth.”
6. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 50
Dividend Yield as of January 9: 2.65%
Broadcom Inc. (NASDAQ:AVGO) is an American semiconductor company that also offers network, wireless, and software services to its consumers. Farallon Capital started investing in the company during the fourth quarter of 2020, with shares worth $272.7 million. In Q3 2021, Broadcom Inc. (NASDAQ:AVGO) accounted for 1.59% of the hedge fund’s portfolio.
On December 9, Broadcom Inc. (NASDAQ:AVGO) announced a quarterly dividend of $4.10 per share, presenting a 14% increase from its prior dividend. The stock’s current dividend yield stands at 2.65%, twice the S&P 500’s yield of 1.3%. In fiscal Q4 2021, Broadcom Inc. (NASDAQ:AVGO) posted an EPS of $7.81, which beat analysts’ consensus by $0.04. Presenting a positive outlook on the semiconductor industry in 2022, recently, Piper Sandler lifted its price target on the stock to $750, while keeping an Overweight rating on the shares.
In Q3 2021, Broadcom Inc. (NASDAQ:AVGO) experienced a positive hedge fund sentiment as 50 hedge funds tracked by Insider Monkey were bullish on the company, up from 47 in the preceding quarter. These stakes are valued at over $2.7 billion.
Broadcom Inc. (NASDAQ:AVGO) is gaining ground among dividend investors, in addition to famous stocks like Microsoft Corporation (NASDAQ:MSFT), Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and AbbVie Inc. (NYSE:ABBV).
Miller Howard Investments mentioned Broadcom Inc. (NASDAQ:AVGO) in its Q3 2021 investor letter. Here is what the firm has to say:
“Technology remains important in our portfolios, although the sector weights have come down over the past year. We now hold Broadcom (AVGO) of which have strong growth prospects, yet attractive valuations in our view. Unlike many younger tech companies, we believe our holdings should significantly benefit from an upturn in the economy.”
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Disclosure. None. 10 Best Dividend Stocks According to Thomas Steyer’s Farallon Capital is originally published on Insider Monkey.
