In this article, we discuss 11 best Vanguard stocks to buy now. If you want to see the top 5 Vanguard holdings, click 5 Best Vanguard Stocks to Buy Now.
The Vanguard S&P 500 ETF invests in the S&P 500 Index, which consists of the largest 500 American companies. The fund aims to replicate the performance of the S&P 500, essentially targeting the overall U.S. stock returns. Vanguard S&P 500 ETF offers an expense ratio of 0.03% as of April 29. The fund’s 1-year returns as of March 31 stood at 15.59%, closely tracking the bench returns of 15.65%.
Investing in a total of 506 stocks, The Vanguard S&P 500 ETF’s portfolio is concentrated in the information technology, communication services, healthcare, financials, consumer discretionary, and industrials sectors. The top ten holdings comprise 30.40% of the total securities as of March 31. The Vanguard S&P 500 ETF offers a quarterly distribution to shareholders, and the last dividend of $1.3737 per share was paid on March 29.
Some of the most notable stocks owned by the Vanguard fund include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), among others discussed in detail below.
Photo by Mohamed Hadji on Unsplash
Our Methodology
We used The Vanguard S&P 500 ETF’s portfolio for the period ending March 31, 2022 for this analysis, picking the fund’s top 11 stock picks. We have mentioned Vanguard’s stake in each holding and the hedge fund sentiment around the stocks.
Best Vanguard Stocks to Buy Now
11. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 107
Percentage of Vanguard’s Stake: 1.04%
JPMorgan Chase & Co. (NYSE:JPM) is an American multinational financial services corporation based in New York, operating through the Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management segments. At the end of March 2022, Vanguard owned 64.6 million shares of JPMorgan Chase & Co. (NYSE:JPM), worth $8.81 billion, representing 1.04% of the total portfolio.
On April 13, JPMorgan Chase & Co. (NYSE:JPM) reported earnings for Q1 2022, posting an EPS of $2.63, falling short of analysts’ estimates by $0.08. The $30.72 billion revenue outperformed market consensus by $318.51 million.
Oppenheimer analyst Chris Kotowski upgraded JPMorgan Chase & Co. (NYSE:JPM) on May 3 to Outperform from Perform with a $167 price target. According to the analyst, loan growth and higher interest rates are good for banks, and even amid a recession, the banking industry “would handle it better than any recession in history”. As per Kotowski’s valuation model, JPMorgan Chase & Co. (NYSE:JPM) has over 30% upside potential in the upcoming 12 to 18 months.
Among the hedge funds tracked by Insider Monkey, 107 funds placed long calls on JPMorgan Chase & Co. (NYSE:JPM) at the end of December 2021, compared to 101 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management owned the biggest stake in the company, with a position worth $1.17 billion.
In addition to Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), elite investors are pouring into JPMorgan Chase & Co. (NYSE:JPM).
Here is what Ariel Investments has to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q4 2021 investor letter:
“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.
“In our view, inflation will not just be a 2021 phenomenon.”
Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”
10. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Percentage of Vanguard’s Stake: 1.21%
Johnson & Johnson (NYSE:JNJ) is an American healthcare company that operates via the Consumer Health, Pharmaceutical, and Medical Devices segments. Vanguard owned over 57.5 million shares of Johnson & Johnson (NYSE:JNJ) at the end of March 2022, worth $10.20 billion, representing 1.21% of the total holdings.
Johnson & Johnson (NYSE:JNJ) on April 19 reported earnings for the first fiscal quarter of 2022, posting an EPS of $2.67, beating market consensus by $0.10. Revenue for the period grew 4.95% year-over-year to $23.43 billion, falling short of analysts’ predictions by $192.16 million.
On April 19, Johnson & Johnson (NYSE:JNJ) declared a $1.13 per share quarterly dividend, a 6.6% increase from its prior dividend of $1.06. The dividend is payable on June 7, for shareholders of record on May 24. Johnson & Johnson (NYSE:JNJ)’s dividend yield on May 11 stood at 2.56%.
Citi analyst Joanne Wuensch raised the price target on Johnson & Johnson (NYSE:JNJ) to $210 from $203 and reiterated a Buy rating on the shares on April 20. The company’s Q1 results reflected a recovery across the business balanced by expense and currency headwinds, the analyst told investors, and the core business “seems to be gaining its footing with forward commentary fairly robust”.
According to Insider Monkey’s Q4 data, 83 hedge funds were bullish on Johnson & Johnson (NYSE:JNJ), with collective stakes worth $7.3 billion, compared to 88 funds in the last quarter, holding stakes in the company valued at $6.8 billion. Terry Smith’s Fundsmith LLP is the leading shareholder of Johnson & Johnson (NYSE:JNJ), with 7.2 million shares worth $1.2 billion.
9. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 96
Percentage of Vanguard’s Stake: 1.24%
UnitedHealth Group Incorporated (NYSE:UNH) was incorporated in 1977 and is based in Minnesota, operating as a diversified healthcare company. It provides healthcare services, health insurance, and pharmacy benefits. Vanguard, as of Q1 2022, held 20.5 million UnitedHealth Group Incorporated (NYSE:UNH) shares worth $10.50 billion, representing 1.24% of the total portfolio.
UnitedHealth Group Incorporated (NYSE:UNH) announced its financial results for Q1 on April 19, posting earnings per share of $5.49, beating consensus estimates by $0.14. Revenue for the period grew 14.18% year-over-year to $80.15 billion, topping analysts’ predictions by $1.38 billion.
On April 18, Deutsche Bank analyst George Hill raised the price target on UnitedHealth Group Incorporated (NYSE:UNH) to $549 from $482 and reiterated a Buy rating on the shares. According to the analyst, UnitedHealth Group Incorporated (NYSE:UNH) posted another solid beat in Q1 on the top and bottom line, with both Optum and UnitedHealth segments reporting double digit growth.
According to Insider Monkey’s Q4 database, 96 hedge funds placed long calls on UnitedHealth Group Incorporated (NYSE:UNH), with combined stakes of $13.6 billion, compared to 95 funds in the last quarter, holding stakes in the company valued at $11.70 billion. Rajiv Jain’s GQG Partners held the leading position in UnitedHealth Group Incorporated (NYSE:UNH), with 3.85 million shares worth $1.93 billion.
Here is what Wedgewood Partners has to say about UnitedHealth Group Inc. (NYSE:UNH) in its Q1 2022 investor letter:
“UnitedHealth Group contributed to performance during the quarter as the Company’s long term, mid-teens earnings growth algorithm remained intact. Further, as political wrangling in the U.S. continues unabated, we suspect investors have become more confident that little will be done on the legislative front to derail the status quo between private health insurance and Medicare/Medicaid. COVID trends continue to ebb throughout the healthcare system; however, there is a sustainable benefit to the cost structure of U.S. healthcare – particularly related to virtual care. Virtual care is not only becoming more acceptable but is now preferred by many patients and care providers which should lead to less overhead (e.g., office space) that can be reinvested.”
8. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 224
Percentage of Vanguard’s Stake: 1.33%
Meta Platforms, Inc. (NASDAQ:FB), a social media tech giant and perhaps the biggest multiverse firm, is one of the top holdings of Vanguard. Vanguard S&P 500 ETF owns 50.5 million Meta Platforms, Inc. (NASDAQ:FB) shares as of March 31, worth $11.2 billion, representing 1.33% of the total securities.
On April 27, Meta Platforms, Inc. (NASDAQ:FB) reported earnings for the first fiscal quarter 2022, posting an EPS of $2.72, beating consensus estimates by $0.21. Revenue for the period grew 6.64% year-over-year but fell short of analysts’ predictions by almost $314 million.
MKM Partners analyst Rohit Kulkarni on April 28 reiterated a Buy recommendation on Meta Platforms, Inc. (NASDAQ:FB) but lowered the price target on the shares to $295 from $315. The company’s Q1 results were “mixed” and its Q2 guidance was “soft”, however, the post-earnings rally reflects a “collective sigh of relief” that Meta Platforms, Inc. (NASDAQ:FB) has navigated multiple headwinds such as TikTok, Apple privacy/signal loss, and the impact from Russian ban, the analyst told investors.
According to Insider Monkey’s fourth quarter database, Meta Platforms, Inc. (NASDAQ:FB) was found in the public stock portfolios of 224 hedge funds, with combined stakes valued at approximately $32 billion. Boykin Curry’s Eagle Capital Management is a prominent stakeholder of the company, with a position worth $2.35 billion.
Here is what ClearBridge Investments All Cap Growth Strategy has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter:
“Facebook shares derated following fourth-quarter earnings results and first-quarter revenue guidance that was weaker than expected. We knew going into Facebook’s latest reporting period that Apple’s (NASDAQ:AAPL) iOS14 privacy changes (measurement, loss of signal) would have a near-term impact on earnings, but competition in the social media space (primarily from TikTok) further catalyzed multiple compression in the stock. While TikTok is a competitive threat and Apple’s privacy changes have impacted the industry, we believe these risks are manageable and Facebook retains a number of advantages around user scale, advertiser scale, new product development and sophistication of its digital advertising technology that are not being valued at current levels.”
7. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 108
Percentage of Vanguard’s Stake: 1.67%
Vanguard holds a $14.1 billion stake in Berkshire Hathaway Inc. (NYSE:BRK-B) as of March 31, representing 1.67% of the total investments. Berkshire Hathaway Inc. (NYSE:BRK-B) is an American diversified conglomerate chaired by Warren Buffett, operating in the insurance, freight rail transportation, and utility sectors worldwide via its subsidiaries.
According to Insider Monkey’s fourth quarter database, 108 hedge funds held long positions in Berkshire Hathaway Inc. (NYSE:BRK-B), collectively holding stakes worth $19.3 billion, compared to 106 funds in the third quarter, holding stakes in the company valued at $19.4 billion. Bill & Melinda Gates Foundation Trust is the leading shareholder of Berkshire Hathaway Inc. (NYSE:BRK-B), with 33.6 million shares worth more than $10 billion.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), institutional investors are piling into Berkshire Hathaway Inc. (NYSE:BRK-B).
6. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 110
Percentage of Vanguard’s Stake: 1.76%
NVIDIA Corporation (NASDAQ:NVDA) was incorporated in 1993 and is headquartered in Santa Clara, California, providing graphics, computing, and networking solutions worldwide. Vanguard owns 54.6 million shares of NVIDIA Corporation (NASDAQ:NVDA) as of Q1 2022, worth about $15 billion, representing 1.76% of the total holdings.
On May 3, Morgan Stanley analyst Joseph Moore resumed coverage of NVIDIA Corporation (NASDAQ:NVDA) with an Equal Weight rating and a $217 price target. The analyst noted that while NVIDIA Corporation (NASDAQ:NVDA) remains one of the best growth names in the semiconductor industry, he is worried about deceleration in gaming and the stock’s high valuation versus rivals. He sees a “significant deceleration” in gaming that should lead to a “modestly challenging” 2023 for NVIDIA Corporation (NASDAQ:NVDA), compensated partly by its “robust” data center presence.
NVIDIA Corporation (NASDAQ:NVDA) gained significant popularity among elite investors. According to Insider Monkey’s Q4 database, 110 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), up from 83 funds in the prior quarter. Israel Englander’s Millennium Management held a significant position in the company, owning close to 4 million shares worth $1.14 billion.
Here is what RiverPark Long/Short Opportunity Fund has to say about NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2022 investor letter:
“Nvidia is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming- focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44% and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.
We expect future growth to remain robust as NVDA chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”
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Disclosure: None. 11 Best Vanguard Stocks to Buy Now is originally published on Insider Monkey.
