In this article, we discuss 10 dividend stocks to buy according to Tom Russo’s Gardner Russo & Gardner. You can skip the latest developments of the hedge fund and our detailed analysis of Russo’s investment philosophy, and go directly to read 5 Best Dividend Stocks According to Tom Russo’s Gardner Russo & Gardner.
Tom Russo, one of the most famous value investors and managing partner at Gardner Russo & Gardner, expressed concerns about the market volatility in his interview in February 2022. He maintained that the financial instability has put investors at a risk, who now have to choose the winning stocks from the underperforming ones. In the same interview, Russo also talked about his position in Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-B), the company he has been investing in since 1983 as it offered attractive value to investors. As the company fights inflation and higher interest rates, Russo still maintains a bullish view of the stock as it promises to maximize long-term returns to shareholders.
Tom Russo joined Gardner Russo & Gardner as a partner in 1989 and became the Managing Member of the firm in 2014. His hedge fund manages over $10.4 billion in 13F securities as of the first quarter of 2022. Russo invests in companies with stable cash flows and strong balance sheets. His hedge fund also prefers to invest in family-owned public companies. According to Russo, these companies are well-positioned to resist criticism and offer significant investment exposure to shareholders. He derives his investment strategy from Warren Buffett, preferring the value and price of stocks while investing. During the financial crisis of 2008, his hedge fund invested heavily in European companies that offered a huge discount to investors. At that time, his portfolio comprised 70% of the European companies, as reported by CNBC. Following these strategies, he managed to beat the S&P 500 index by 4.7% annually between 1984 and 2011.
As of Q1 2022, Tom Russo’s hedge fund invested heavily in the finance, consumer goods, and services sector, with healthcare, industrial goods, and technology making up the smaller portions of the portfolio. Some of the hedge fund’s major holdings include Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Mastercard Incorporated (NYSE:MA).
Our Methodology:
In this article, we discuss the best dividend stocks in Tom Russo’s portfolio. The data used in this list is taken from Gardner Russo & Gardner’s 13F portfolio as of Q1 2022.
10 Best Dividend Stocks According to Tom Russo’s Gardner Russo & Gardner
10. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 69
Dividend Yield as of May 30: 1.23%
Gardner Russo & Gardner’s Stake Value: $7,521,000
American Express Company (NYSE:AXP) is an American credit card service company that issues personal, small business, and corporate credit cards to consumers. In Q1 2022, the company reported a 121% year-over-year growth in its travel and entertainment spending after suffering losses for two years due to the pandemic-related lockdown.
American Express Company (NYSE:AXP) maintains a 30-year dividend streak with occasional dividend increases. In March, the company announced a 20% hike in its quarterly dividend to $0.52 per share. As of May 30, the stock’s dividend yield was recorded at 1.23%. Unlike major blue-chip tech stocks like Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Mastercard Incorporated (NYSE:MA), American Express Company (NYSE:AXP) is trading in the green in 2022 so far.
Gardner Russo & Gardner started investing in American Express Company (NYSE:AXP) during the fourth quarter of 2010 with shares worth roughly $4 million. At the end of Q1 2022, the hedge fund owned a stake worth over $7.5 million in the company, which accounted for 0.07% of Tom Russo’s portfolio. As the company showed growth in consumer activity in the first quarter of 2022, RBC Capital raised its price target on American Express Company (NYSE:AXP) to $200, with a Sector Perform rating on the shares.
At the end of Q1 2022, 69 hedge funds tracked by Insider Monkey reported owning stakes in American Express Company (NYSE:AXP), up from 64 in the previous quarter. The consolidated value of these stakes is over $33.1 billion. With a stake worth over $28 billion, Berkshire Hathaway held the largest position in the New York-based company in Q1 2022.
9. McCormick & Company, Incorporated (NYSE:MKC)
Number of Hedge Fund Holders: 34
Dividend Yield as of May 30: 1.59%
Gardner Russo & Gardner’s Stake Value: $4,713,000
McCormick & Company, Incorporated (NYSE:MKC) is an American food company that manufactures, markets, and distributes different food products, including spices, condiments, and other flavoring products. In Q1 2022, McCormick & Company, Incorporated (NYSE:MKC) saw a 3% year-over-year growth in its sales and further expects the sales to grow by 3% to 5% in FY22 versus the estimates of 3.84%.
At the end of Q1 2022, Gardner Russo & Gardner owned a stake worth over $4.7 million in McCormick & Company, Incorporated (NYSE:MKC), after reducing its position in the company by 2%. The company represented 0.04% of Tom Russo’s portfolio.
The number of hedge funds tracked by Insider Monkey owning stakes in McCormick & Company, Incorporated (NYSE:MKC) grew to 34 in Q1 2022 from 25 in the previous quarter. The collective value of these stakes is roughly $1.8 billion.
McCormick & Company, Incorporated (NYSE:MKC) currently pays a quarterly dividend of $0.37 per share, raising it by 8.8% in November 2021. The company has been paying dividends to shareholders for the past 97 years while maintaining a 36-year track record of consistent dividend growth. The stock’s dividend yield, as of May 30, stood at 1.59%.
ClearBridge Investments mentioned McCormick & Company, Incorporated (NYSE:MKC) in its Q3 2021 investor letter. Here is what the firm has to say:
“Within consumer staples, we sold out of Unilever, a great company and sustainability leader that we believe faces margin headwinds as it invests to promote growth, and replaced it with McCormick, a leader in food seasonings and flavors. McCormick is a high-quality business that has lagged recently due to the negative COVID-19 impacts on the business, which provided us with an attractive entry point. The company is also levered to the healthy eating trend, as seasonings are a healthier substitute for sugar and fat.”
8. Crane Holdings Co. (NYSE:CR)
Number of Hedge Fund Holders: 26
Dividend Yield as of May 30: 1.97%
Gardner Russo & Gardner’s Stake Value: $8,051,000
Crane Holdings Co. (NYSE:CR) is an American manufacturing company that specializes in industrial products. The company announced its Q1 2022 results on April 25, reporting revenue of $801 million, which reflected a 3% growth from the same period last year. Following its first-quarter results, Stifel set a $134 price target on Crane Holdings Co. (NYSE:CR), with a Buy rating on the shares.
Gardner Russo & Gardner initiated its position in Crane Holdings Co. (NYSE:CR) during the fourth quarter of 2010, with shares worth over $8 million. At the end of Q1 2022, the hedge fund owned 74,356 shares in the company, valued at over $8.05 million. The company constituted 0.07% of Tom Russo’s portfolio.
In April, Crane Holdings Co. (NYSE:CR) declared a quarterly dividend of $0.47 per share, having raised it by 9% in January. The stock’s dividend yield came to be recorded at 1.97% on May 30.
GAMCO Investors was the largest shareholder of Crane Holdings Co. (NYSE:CR) in Q1 2022, owning a $161.3 million worth of stake. Overall, 26 hedge funds in Insider Monkey’s Q1 2022 database held positions in the company, up from 25 in the previous quarter. The consolidated value of these stakes is over $287 million.
7. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 89
Dividend Yield as of May 30: 2.34%
Gardner Russo & Gardner’s Stake Value: $5,006,000
Union Pacific Corporation (NYSE:UNP), an American transport company, announced a 10% hike in its quarterly dividend in May to $1.30 per share. The company has paid dividends on its common stock for 123 consecutive years. The stock’s dividend yield came to be recorded at 2.34% on May 30.
Gardner Russo & Gardner owned stakes worth over $5 million in Union Pacific Corporation (NYSE:UNP) at the end of Q1 2022, after increasing its position by 1%. The company represented 0.04% of Tom Russo’s portfolio.
In addition to Gardner Russo & Gardner, 89 hedge funds in Insider Monkey’s database held stakes in Union Pacific Corporation (NYSE:UNP) in Q1 2022, up from 59 in the previous quarter. These stakes hold a collective value of $7 billion, compared with $5.6 billion worth of stakes held by hedge funds in Q4 2021.
Appreciating the improved service of Union Pacific Corporation (NYSE:UNP), in April, UBS raised its price target on the stock to $285, while maintaining a Strong Buy rating on the shares.
ClearBridge Investments mentioned Union Pacific Corporation (NYSE:UNP) in its Q4 2021 investor letter. Here is what the firm has to say:
“Despite these mixed emerging growth results, the ClearBridge Global Growth Strategy outperformed the benchmark due to resilience among our secular and structural growth holdings. These consistent growers were complemented by solid contributions from structural holdings including Union Pacific.”
6. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 78
Dividend Yield as of May 30: 2.45%
Gardner Russo & Gardner’s Stake Value: $228,293,000
In Q1 2022, Comcast Corporation (NASDAQ:CMCSA) reported strong earnings, posting broadband revenue of $6 billion, up 8% from the same period last year. The company’s total sales amounted to over $31 billion, presenting a 14% year-over-year growth. Despite solid quarterly and FY21 results, the telecommunications company has lost 12.9% of its value in 2022 so far, just like Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Mastercard Incorporated (NYSE:MA), which are also down in 2022.
As per Insider Monkey’s Q1 2022 database, 78 hedge funds owned stakes in Comcast Corporation (NASDAQ:CMCSA), worth over $7.1 billion. In comparison, 80 hedge funds held positions in the company in the previous quarter, with stakes valued at over $8.6 billion.
In January, Comcast Corporation (NASDAQ:CMCSA) announced an 8% increase in its quarterly dividend to $0.27 per share. This marked the company’s 14th consecutive year of dividend growth. The stock’s dividend yield stood at 2.45%, as of the close of May 30. Appreciating the free cash flow growth of Comcast Corporation (NASDAQ:CMCSA), in April, Morgan Stanley set a $55 price target on the stock, with an Overweight rating on the shares.
Gardner Russo & Gardner initiated its position in Comcast Corporation (NASDAQ:CMCSA) during the fourth quarter of 2010, buying shares worth $659,000. The hedge fund has increased its position over time in the company, owning roughly 5 million CMCSA shares at the end of Q1 2022, valued at over $228.2 million. Comcast Corporation (NASDAQ:CMCSA) represented 2.19% of Tom Russo’s portfolio.
ClearBridge Investments mentioned Comcast Corporation (NASDAQ:CMCSA) in its Q4 2021 investor letter. Here is what the firm has to say:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Comcast was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
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Disclosure. None. 10 Best Dividend Stocks According to Tom Russo’s Gardner Russo & Gardner is originally published on Insider Monkey.
