In this article, we discuss 10 best dividend stocks to buy according to Kenneth A. Moffet’s Hourglass Capital. You can skip our detailed analysis of the hedge fund’s past performance and its investment strategy, and go directly to read 5 Best Dividend Stocks to Buy According to Kenneth A. Moffet’s Hourglass Capital.
Kenneth A. Moffet is a financial advisor and is currently serving as the Managing Principal of Houston-based investment management firm, Hourglass Capital. The hedge fund was founded in 1989 by the Institutional Equity Team, further expanding its investment offerings and advisory services in 2008.
Before joining Hourglass Capital, Moffet honed his investment skills while working as an Executive Director with Morgan Stanley, where he managed over $2 billion worth of client assets. He also worked at Goldman Sachs and used to manage private client accounts in the US and Mexico. Hourglass Capital uses top-down and bottom-up investment approaches while analyzing the true intrinsic value of the companies. The firm pays attention to asset prices and the value of the stocks and tries to benefit from the imbalance created between the market prices and the long-term values of the companies.
In its Q1 2022 investor’ letter, the hedge fund showed confidence in its energy stocks as the Energy sector of the S&P 500 returned 39% in the first quarter, compared with a -4.6% return of the S&P 500. The fund further expects the energy stocks to deliver more as the sector is well-positioned to benefit from the free cash flow growth. Hourglass Capital returned 5.4% in the first quarter of 2022 while delivering a 31.25% return to investors in 2021.
As of Q1 2022, Hourglass Capital holds a 13F portfolio value of over $320 million, up from $298.6 million in the previous quarter. The hedge fund has significant stakes in finance, healthcare, and the basic material sectors. As the tech-heavy NASDAQ is down 24.24% year-to-date, as of the market close of June 2, the hedge fund reduced its position in some of the major blue-chip tech stocks, such as Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT).
Our Methodology:
In this article, we discuss the best dividend stocks in Kenneth A. Moffet’s portfolio. The data mentioned in this list is taken from Hourglass Capital’s 13F portfolio as of Q1 2022.
10 Best Dividend Stocks to Buy According to Kenneth A. Moffet’s Hourglass Capital
10. Continental Resources, Inc. (NYSE:CLR)
Number of Hedge Fund Holders: 20
Dividend Yield as of June 2: 1.62%
Hourglass Capital’s Stake Value: $3,682,000
Continental Resources, Inc. (NYSE:CLR) is an American energy company that specializes in the production and exploration of petroleum and natural gas. The company plans to take advantage of higher crude oil prices as it announced to raise oil production to 200K-210K bbl from 195K-205K in 2022. In Q1 2022, Continental Resources, Inc. (NYSE:CLR) reported revenue of $1.82 billion, up from $1.21 billion recorded during the same period last year.
In April, Continental Resources, Inc. (NYSE:CLR) announced a 22% hike in its quarterly dividend to $0.28 per share, which was the company’s fifth consecutive quarterly increase since 2019. The stock’s dividend yield was recorded at 1.62%, as of the close of June 2. In April Truist appreciated the strong share repurchase program of Continental Resources, Inc. (NYSE:CLR) and believes that the company is well-positioned to take advantage of strong commodity prices. The firm lifted its price target on the stock to $95, with a Buy rating on the shares.
At the end of Q1 2022, Hourglass Capital held shares worth roughly $3.7 million in Continental Resources, Inc. (NYSE:CLR), increasing its position in the company by 14% during the quarter. The company represented 1.15% of Kenneth A. Moffet’s portfolio. The hedge fund paid attention to the energy sector in Q1 while reducing stakes in tech companies such as Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT).
As per Insider Monkey’s Q1 2022 database, 20 hedge funds were bullish on Continental Resources, Inc. (NYSE:CLR), up from 19 in the previous quarter. The consolidated value of these stakes is over $261.4 million. With a stake worth $87 million, D E Shaw held the largest position in the Oklahoma-based company in Q1 2022.
Smead Capital Management mentioned Continental Resources, Inc. (NYSE:CLR) in its Q3 2021 investor letter. Here is what the firm has to say:
“Oil stocks dominated our winners for the quarter. Continental Resources (CLR) rose 21.82% as the stock market had to reprice future cash flows on higher energy prices.”
9. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 60
Dividend Yield as of June 2: 1.79%
Hourglass Capital’s Stake Value: $5,570,000
Hourglass Capital initiated its position in Walmart Inc. (NYSE:WMT) during the first quarter of 2020 with shares worth over $2.7 million. During Q1 2022, the hedge fund purchased additional 4,000 WMT shares worth $737,000, taking its total stake in the company to over $5.57 million. WMT accounted for 1.74% of Kenneth A. Moffet’s portfolio.
At the end of Q1 2022, 60 hedge funds in Insider Monkey’s database reported owning stakes in Walmart Inc. (NYSE:WMT), down from 63 in the previous quarter. The collective value of these stakes is over $6.56 billion.
This February, Walmart Inc. (NYSE:WMT) raised its quarterly dividend by 2% to $0.56 per share, taking its annual dividend to $2.24 per share. The company has been raising dividends consistently for the past 49 years. As of June 2, the stock’s dividend yield stood at 1.79%. This May, BMO Capital lowered its price target on Walmart Inc. (NYSE:WMT) to $165, with an Outperform rating on the shares. The firm expressed concerns about rising food prices but continues to view it as a highly attractive global retailer.
8. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 35
Dividend Yield as of June 2: 2.48%
Hourglass Capital’s Stake Value: $4,701,000
HP Inc. (NYSE:HPQ) currently pays a quarterly dividend of $0.25 per share, having raised it by 29% in November 2021. In the past ten years, the company has raised its dividend at a CAGR of 15.1% and its payout ratio stands at 20.1%. As of June 2, the stock’s dividend yield was recorded at 2.48%.
In fiscal Q2 2022, HP Inc. (NYSE:HPQ) topped market estimates, posting an EPS of $1.08, which beat analysts’ consensus by $0.03. The company’s revenue of $16.49 billion presented a 3.86% year-over-year growth and also surpassed estimates by $299.6 million. Appreciating the company’s commercial and premium PC growth in the fiscal second quarter, Citigroup recently lifted its price target on HP Inc. (NYSE:HPQ) to $40, but kept a Neutral rating on the shares, as the company’s competitor Dell posted much stronger results.
The number of hedge funds tracked by Insider Monkey owning stakes in HP Inc. (NYSE:HPQ) stood at 35 in Q1 2022, declining from 39 funds in the previous quarter. These 35 hedge funds owned a collective stake worth over $4.17 billion, up from $963.4 million worth of stakes held by hedge funds in Q4 2021. Warren Buffett’s Berkshire Hathaway owned the largest stake in the California-based company in Q1 2022, worth roughly $3.8 billion.
At the end of Q1 2022, Hourglass Capital owned 129,510 HPQ shares, valued at over $4.7 million. The company accounted for 1.46% of Kenneth A. Moffet’s portfolio.
7. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Dividend Yield as of June 2: 3.22%
Hourglass Capital’s Stake Value: $7,240,000
Hourglass Capital initiated its position in Chevron Corporation (NYSE:CVX) during the fourth quarter of 2015, purchasing 24,104 shares, worth over $2.1 million. At the end of Q1 2022, the hedge fund held shares worth over $7.2 million in the energy company, which accounted for 2.26% of Kenneth A. Moffet’s portfolio.
In January, Chevron Corporation (NYSE:CVX) raised its quarterly dividend by 6% to $1.42 per share. This marked the company’s 35th consecutive year of dividend growth. The stock’s dividend yield was recorded at 3.22% on June 2. On May 31, Barclays raised its price target on Chevron Corporation (NYSE:CVX) to 196, with an Overweight rating on the shares, appreciating the company’s share repurchase program.
At the end of Q1 2022, 53 hedge funds tracked by Insider Monkey owned stakes in Chevron Corporation (NYSE:CVX), the same as in the previous quarter. The consolidated value of these stakes is roughly $28 billion, compared with $6.5 billion worth of stakes owned by hedge funds in Q4 2021. Warren Buffett, Ken Fisher, and Ken Griffin are some of the major shareholders of the California-based energy company in Q1 2022.
ClearBridge Investments mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm has to say:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
6. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 83
Dividend Yield as of June 2: 3.60%
Hourglass Capital’s Stake Value: $6,559,000
Exxon Mobil Corporation (NYSE:XOM), formed by the merger of Exxon and Mobil in 1999, is an American multinational oil and gas company. Insider Monkey’s Q1 2022 database shows that the company remained popular among hedge funds, with 83 funds holding positions in the company, up from 71 hedge funds in the previous quarter. The collective value of the stakes held by 83 hedge funds stood at over $8.55 billion.
At the end of Q1 2022, Hourglass Capital owned a stake worth over $6.55 million in Exxon Mobil Corporation (NYSE:XOM), buying additional 11,000 XOM shares during the quarter. The company constituted 2.04% of Kenneth A. Moffet’s portfolio. The hedge fund started building its position in the company during the fourth quarter of 2015, with shares worth over $3 million.
On May 31, Barclays raised its price target on Exxon Mobil Corporation (NYSE:XOM) to $111, with an Overweight rating on the shares. The stock is up 47.27% year-to-date, as of the close of June 2, unlike major stocks such as Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), which are delivering negative returns since the beginning of the year.
Exxon Mobil Corporation (NYSE:XOM) holds a 39-year track record of consistent dividend growth. Currently, the company pays a quarterly dividend of $0.88 per share, with a dividend yield of 3.60%, as of June 2.
Saturna Capital mentioned Exxon Mobil Corporation (NYSE:XOM) in its Q4 2021 investor letter. Here is what the firm has to say:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
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Disclosure. None. 10 Best Dividend Stocks to Buy According to Kenneth A. Moffet’s Hourglass Capital is originally published on Insider Monkey.
