In this article we will take a look at the 10 best dividend stocks to buy according to billionaire Richard Chilton. You can skip our detailed analysis of Richard Chilton’s history, investment philosophy, and hedge fund performance, and go directly to the 5 Best Dividend Stocks to Buy According to Billionaire Richard Chilton.
Richard Lockwood Chilton is an American investor, businessman, founder, chairman, and CEO of Chilton Investment Company. Chilton is a finance and economics graduate from Alfred University and worked at Merrill Lynch and Allen & Company before launching Chilton Investment Company in 1992. He has a net worth of around $1.2 billion, and his investment strategies are value-oriented based on fundamental research and disciplined portfolio management.
Based on the latest 13F holdings for the first quarter of 2021, Chilton owns 1 million shares in Microsoft Corporation (NASDAQ: MSFT) after cutting his holding in the company by 10.11% from Q4 2020. Rosenblatt recently initiated coverage on Microsoft Microsoft (NASDAQ:MSFT) with a Buy rating and $301 price target. The firm called Microsoft the “most important software company on the planet.” The firm praised Microsoft’s revenue diversification efforts and said that about 78% of the company’s revenue would be soon coming from recurring sources.
Chilton also has a significant holding in Alphabet Inc. (NASDAQ: GOOG). The company has announced forming an alliance with other tech giants like Apple Inc. (NASDAQ: AAPL) and Amazon.com, Inc. (NASDAQ: AMZN) that will power smart devices and generally make the technology easier to develop and use and more widely accepted. Alphabet Inc. (NASDAQ: GOOG) has also announced that Google Pay, its mobile payment services, will now allow users in the U.S. to send money to India and Singapore. Alphabet Inc. (NASDAQ: GOOG) intends to offer these services in partnership with money transfer companies Western Union and Wise with their features integrated into the Google Pay app. Users will choose to receive their money either through Western Union or Wise.
Chilton owns 1.3 million shares in Amazon.com, Inc. (NASDAQ: AMZN) after reducing his holding by 10.06% from Q4 2020. The company recently won an appeal against the European Commission, which had ordered the company to pay back around $303 million in taxes to Luxembourg. In its ruling, the court noted the commission failed to prove Amazon.com, Inc. (NASDAQ: AMZN) benefited from an illegal tax advantage. Amazon.com, Inc. (NASDAQ: AMZN) has also sold bonds to refinance debt and buy stock to take advantage of the cheap borrowing costs.
But in this article we are going to take a look at some of the best dividend stocks in Richard Chilton’s Q1’2020 portfolio. These stocks include big names like Merck & Co., Inc. (NYSE: MRK), Bristol-Myers Squibb Company (NYSE: BMY), Broadcom Inc. (NASDAQ: AVGO), The Coca-Cola Company (NYSE: KO) and Pfizer Inc. (NYSE: PFE).
Richard Chilton of Chilton Investment Company
Chilton is an exception in an industry that is reeling from losses. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best Dividend Stocks to Buy According to Billionaire Richard Chilton
Here is the list of 10 best dividend stocks to buy according to billionaire Richard Chilton:
10. Bristol-Myers Squibb Company (NYSE: BMY)
Chilton’s Stake Value: $452,000
Percentage of Richard Chilton’s 13F Portfolio: 0.01%
Dividend Yield: 3.05%
No. of Hedge Fund Holders: 131
Bristol-Myers Squibb Company (NYSE: BMY) focuses on discovering, developing, licensing, producing, and marketing biopharmaceutical products around the world. The pharmaceutical company reported $11.1 billion in revenue in its first quarter of 2021, reflecting a 3% growth from Q1 2020. The growth in revenue reflects the company’s sustained growth in sales as well as the advancement of its product pipeline in all its four core therapeutic areas. Bristol-Myers Squibb Company (NYSE: BMY) ranks 10th in the list of best dividend stocks to buy according to billionaire Richard Chilton.
The company has announced a major milestone after the European Medicines Agency (EMA)’s Committee for Medicinal Products for Human Use (CHMP) recommended the approval of Onureg® (azacitidine tablets; CC-486) used as maintenance therapy in adult patients with acute myeloid leukemia (AML).
9. Broadcom Inc. (NASDAQ: AVGO)
Chilton’s Stake Value: $348,000
Percentage of Richard Chilton’s 13F Portfolio: 0.001%
Dividend Yield: 3.27%
No. of Hedge Fund Holders: 59
Broadcom Inc. (NASDAQ: AVGO) is a designer, developer, and supplier of semiconductor infrastructure software solutions.
The company recently announced the launch of its Emulex Gen 7 LPe36000-series Host Bus Adapters (HBAs), the first 64G Fibre Channel HBA in the world. The release makes Broadcom the first company to launch a complete portfolio of products that support an end-to-end 64G data path. The stock ranks 9th in the list of 10 best dividend stocks to buy according to billionaire Richard Chilton.
Broadcom Inc. (NASDAQ: AVGO) recently signed a partnership with Alphabet to integrate Google Cloud services with its platform and products. The partnership will allow businesses to use Broadcom solutions in domains like DevOps, security and deployment through Google Cloud.
Broadcom Inc.’s (NASDAQ: AVGO)’s total revenue in Q1 2021 increased by 14% to $6,655 million from the amount reported in Q1 2020. The company’s GAAP net income stood at $1,378 million, while Adjusted EBITDA was $3,941 million for Q1 2021. Evercore ISI upgraded the company’s stock to “Outperform” from “In Line.”
In its Q1 2021 investor letter, Del Principe O’Brien Financial Advisors highlighted a few stocks and Broadcom Inc. (NASDAQ:AVGO) is one of them. Here is what the fund said:
“We continue to be impressed with the growth of this U.S.-based technology leader. At the time of their IPO in 2009, Broadcom’s reported revenue was just around $1.5 billion. At the end of fiscal year 2020, the company’s reported revenue was nearly $24 billion – that’s 16x growth in 11 years’ time. (See chart below. Source: Broadcom Networking Overview, J.P. Morgan 19th Annual Tech/Auto Forum, January 12, 2021).
This level of growth was achieved in part by Broadcom’s penchant for acquisitions, which we have highlighted in previous letters. Besides their impressive revenue growth and wise capital allocation strategies, we like Broadcom for the wide economic moat they have created through their commitment to research and development ($5 billion in fiscal year 2020) and their extensive intellectual property portfolio, which currently includes more than 23,000 patents. According to Broadcom, 99.9% of all internet traffic crosses at least one of their chips.”
8. The Coca-Cola Company (NYSE: KO)
Chilton’s Stake Value: $6,794,000
Percentage of Richard Chilton’s 13F Portfolio: 0.18%
Dividend Yield: 3.09%
No. of Hedge Fund Holders: 62
The Coca-Cola Company (NYSE: KO) is the world’s leading beverage company that specializes in the production, marketing, and sale of several flavors of nonalcoholic beverages. Recently, Bank of America rated the bonds issued by The Coca-Cola Company (NYSE: KO) at Marketweight. The bank said that Coca Cola is poised for a “swift” rebound in FY21-22 EBITDA. The stock ranks 8th in the list of 10 best dividend stocks to buy according to billionaire Richard Chilton.
Like Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG), Coca Cola is one of the best stocks to buy for long-term in Richard Chilton’s portfolio.
The Coca-Cola Company (NYSE: KO) also reported impressive quarterly results for Q1 2021, with net revenue growing by 5% to $9.0 billion while non-GAAP revenue increased by 6% compared to Q1 2020. During the quarter, the company’s operating margin was 30.2% compared to 27.7% reported in Q1 2020.
7. Merck & Co., Inc. (NYSE: MRK)
Chilton’s Stake Value: $10,198,000
Percentage of Richard Chilton’s 13F Portfolio: 0.28%
Dividend Yield: 3.36%
No. of Hedge Fund Holders: 82
Merck & Co., Inc. (NYSE: MRK) is a U.S. pharmaceutical company that produces and supplies medical products worldwide. The company has experienced significant growth largely driven by growth opportunities in several niches. With this growth, the company projects low to mid-single-digit growth in revenue in 2021. The stock ranks 7th in the list of 10 best dividend stocks to buy according to billionaire Richard Chilton.
Merck & Co., Inc. (NYSE: MRK) has also announced another milestone following the FDA approval of its sBLA for Keytruda (pembrolizumab) as a first-line for gastric cancer treatment. The product will be used in combination with chemotherapy and Herceptin (trastuzumab) for the first-line treatment of patients with gastroesophageal junction adenocarcinoma, metastatic HER2-positive gastric, or locally advanced unresectable.
6. The First of Long Island Corporation (NASDAQ: FLIC)
Chilton’s Stake Value: $2,998,000
Percentage of Richard Chilton’s 13F Portfolio: 0.08%
Dividend Yield: 3.37%
No. of Hedge Fund Holders: 9
The First of Long Island Corporation (NASDAQ: FLIC) has reported an increase in net income from $9.1 million in Q1 2020 to $11.3 million in Q1 2021. EPS in the period increased from $0.38 in Q1 2020 to $0.47 in Q1 2021. The stock ranks 6th in the list of 10 best dividend stocks to buy according to billionaire Richard Chilton. Like Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG), FLIC is one of the best stocks to buy for long-term in Richard Chilton’s portfolio.
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Disclosure: None. 10 Best Dividend Stocks to Buy According to Billionaire Richard Chilton is originally published on Insider Monkey.
