5 Best 5% Dividend Stocks To Buy According To Hedge Funds

1. Chesapeake Energy Corporation (NASDAQ:CHK)

Number of Hedge Fund Holders: 70
Dividend Yield as of November 28: 9.74%

Chesapeake Energy Corporation (NASDAQ:CHK) is an American exploration and production company with headquarters in Oklahoma. On November 11, the company declared a 36.2% growth in its quarterly dividend to $3.16 per share. As of November 28, the stock has a dividend yield of 9.74%.

In October, Jefferies initiated its coverage on Chesapeake Energy Corporation (NASDAQ:CHK) with a Buy rating and a $150 price target. The firm gave a positive view of the energy transition companies.

In Q3 2022, Chesapeake Energy Corporation (NASDAQ:CHK) reported an EPS of $5.06, which surpassed estimates by $0.58. The company’s operating cash flow came in at $1.3 billion and generated $773 million in adjusted free cash flow. It also returned $1.9 billion to shareholders in dividends and share repurchases during the quarter, which makes it one of the best dividend stocks on our list.

Of the 920 hedge funds tracked by Insider Monkey, 70 funds owned stakes in Chesapeake Energy Corporation (NASDAQ:CHK) in Q3 2022, up from 67 in the previous quarter. These stakes are worth over $4.1 billion collectively.

Miller Value Partners mentioned Chesapeake Energy Corporation (NASDAQ:CHK) in its Q3 2022 investor letter. Here is what the firm has to say:

“Chesapeake Energy Corporation (NASDAQ:CHK) gained 19.1%² in the period. The company reported 2Q22 Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, and Exploration Expense (EBITDAX) of $1,269MM, +195.8% Y/Y, ahead of consensus of $1,226MM, and Adjusted Earnings per Share (EPS) of $4.87, compared to 2Q21 EPS of $1.64, ahead of analyst expectations for EPS of $3.82. Chesapeake generated adjusted free cash flow (FCF) of $494MM, bringing TTM FCF to $1,663MM, or a FCF yield of 14.4%. Management also raised the company’s base dividend by 10% to $2.20/share, bringing the total quarterly dividend to $2.32/share, or an annualized yield of ~9.7%. Additionally, the company doubled its existing share repurchase authorization from $1B to $2B and has executed $670MM in repurchases so far through 7/31/22. Collectively, management is guiding for $1.2B in total FY22 dividends, at the midpoint, and $1B in share buybacks, implying total FY22 shareholder returns of $2.2B, or ~19.1% of the company’s market cap.”

You can also take a look at 15 Best Dividend Stocks of All Time and 12 Best High-Yield Dividend Stocks To Buy Now

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