Below we present the list of 5 Best Annual Dividend Stocks To Buy Now. For our methodology and a more comprehensive list please see the 12 Best Annual Dividend Stocks To Buy Now.
5. CRH plc (NYSE:CRH)
Number of Hedge Fund Shareholders: 12
Annual Dividend Payout: $1.1948
CRH plc (NYSE:CRH) has grown its semi-annual dividend payments for three straight years, with them having a greater than 10% CAGR over the past five years. The building materials company has showcased reduced cyclicality and stronger resilience than more pure-play materials producers according to Citi analyst Ephrem Ravi, who has a ‘Buy’ rating on the shares. The analyst also likes the Irish’s company’s strong cash generation, which should fuel further dividend growth.
Hedge fund ownership of CRH plc (NYSE:CRH) hit an all-time high in Q2, jumping by 30% quarter-over-quarter. One of the new Q2 stakes was purchased by Edgar Wachenheim’s Greenhaven Associates, which raised its position in CRH by another 139% in Q3 to 1.79 million shares worth $57.9 million on September 30.
L1 Capital International believes the value of the current investment opportunity in CRH plc (NYSE:CRH) is a rare occurrence, as the fund discussed in its Q2 2022 investor letter:
“CRH plc (NYSE:CRH) was outlined in detail in our December 2021 Quarterly Report. Since then, the tragic war in Ukraine commenced with no signs of resolution. This war and associated sanctions on Russia have led to major disruptions to European energy markets. CRH is a relatively energy intensive business and around 20% of the Group’s operations are in Europe. We expect they will be negatively impacted by higher energy prices and reduced economic activity. Around 75% of CRH’s operations are in North America and will be less impacted compared to the European operations.
We have followed and analysed the global building products industry for nearly 25 years and the current share price of CRH presents an investment opportunity that rarely arises. CRH recently sold a business for US$3.8 billion, equating to almost 15x EBIT. In comparison, the remainder of CRH which consists of many businesses which are higher quality than the divested operation, is trading on around 9x EBIT, 11x PE, 9% free cashflow, 4% dividend yield and CRH is buying back around 3% of its shares annually. CRH has delivered shareholders a 15% return per annum, compounded over 50 years. The current share price provides compelling value for investors with a longer-term horizon.”
4. Woodside Energy Group ADR (NYSE:WDS)
Number of Hedge Fund Shareholders: 12
Annual Dividend Payout: $2.14
Woodside Energy Group ADR (NYSE:WDS) is one of the more compelling dividend stocks on this list, with a robust 9.16% dividend yield and an impressive dividend CAGR of 16.9% over the past five years. That growth was entirely thanks to a massive raise to its semi-annual dividend payments this year, which totaled $2.14 compared to just $0.42 a year ago.
The Australian petroleum E&P company surged most major metrics by triple digits year-over-year in the June quarter, growing revenue by 132% to $2.9 billion, net income by 417% to $820 million, and diluted EPS by 324% to $0.72.
There was a hedge fund buying spree of Woodside Energy Group ADR (NYSE:WDS) shares during Q2 following the company’s merger with the oil and gas assets of BHP Group (NYSE:BHP). Billionaire money managers Ken Fisher, Ken Griffin, and Steve Cohen were among the group of investors that added WDS to their 13F portfolios during the quarter.
3. Marcus & Millichap Inc (NYSE:MMI)
Number of Hedge Fund Shareholders: 13
Annual Dividend Payout: $0.50
Marcus & Millichap Inc (NYSE:MMI) began making semi-annual dividend payments this year, with each amounting to $0.25 (it also issued a special dividend payment of $1.00 on April 4). That starts the stock off with a decent dividend yield of 1.35% and there’s immense room for future dividend growth given the company’s miniscule payout ratio of just under 6%. The commercial property services provider also authorized a $70 million share repurchase program in August on the heels of record Q2 results.
For the quarter, Marcus & Millichap Inc (NYSE:MMI) grew revenue by 39% year-over-year to nearly $400 million, while net income surged by 34% to $42 million. The company enjoyed strong growth across several of its businesses, with its private client business growing by 33% year-over-year, while its financing business grew by 31%. Lastly, it grew Middle Market and larger transactions by 59% during the quarter.
Since hitting a six-year low in hedge fund ownership during the third quarter of 2020, the number of smart money managers long Marcus & Millichap Inc (NYSE:MMI) has more than doubled. Chuck Royce’s Royce & Associates, which has held a position in the company since early 2014, owned 1.58 million MMI shares on June 30, valued at $58.6 million.
2. Cameco Corporation (NYSE:CCJ)
Number of Hedge Fund Shareholders: 40
Annual Dividend Payout: $0.0946
Canadian uranium mining company Cameco Corporation (NYSE:CCJ) grew its annual dividend payment by 51% this year to $0.0946. While the company’s dividend won’t set the world on fire with its 0.39% dividend yield, there’s room for growth given the company’s 24% payout ratio and the company has a lot going for it besides its dividend.
In October, Cameco announced the acquisition of a 49% stake in nuclear products and services company Westinghouse Electric for $2.2 billion plus debt, with partner Brookfield Renewable Partners taking on the remaining ownership stake. Given the constricted state of the energy market should provide tailwinds for both uranium and nuclear companies, it’s a move that could pay big dividends for Cameco down the line; leading to potentially bigger dividends for the company’s shareholders as well.
Hedge fund ownership of Cameco Corporation (NYSE:CCJ) has surged by 60% over the last year, hitting an all-time high in Q1 of this year. Several funds are extremely bullish on the company, each having greater than 9% 13F exposure to the stock as of June 30. One of them is David Iben’s Kopernik Global Investors, which owns 4.19 million shares valued at over $88 million.
Aristotle Capital is bullish on Cameco Corporation (NYSE:CCJ)’s disciplined approach to increasing its production volumes, as outlined in the fund’s Q2 2022 investor letter:
“After making a strong run in the beginning of the year, Cameco Corporation (NYSE:CCJ), the world’s largest publicly traded uranium producer, was a primary detractor for the quarter. As countries focus on energy security and increasingly rely on nuclear energy, market dynamics are shifting in Cameco’s favor. Supply has tightened as the developed world pivots from Russia, a large supplier of uranium, while demand for non-Russia-linked uranium has increased. While we recognize there has been, and will likely continue to be, short-term volatility in uranium prices, we admire Cameco’s prior actions of operational discipline, which we believe have positioned the company to benefit from the current market dynamics. Cameco remains focused on prudently and profitably increasing production of its Canada-based assets, including an increase of its ownership stake in the Cigar Lake joint venture, as well as the planned start of production at the McArthur River/Key Lake mines in 2024. As these operations come online, we believe Cameco will be able to meet its utilities customers’ demand for long-term supply at higher equilibrium prices.”
1. News Corporation (NASDAQ:NWS)
Number of Hedge Fund Shareholders: 48
Annual Dividend Payout: $0.20
Topping the list of best annual dividend stocks is News Corporation (NASDAQ:NWS), which had made $0.10 semi-annual dividend payments since 2016. Despite a payout ratio of less than 17%, the diversified entertainment and media company appears to be in no hurry to raise its payouts to shareholders, which currently yield 1.17%.
The company has been attempting to shed slower-growing assets like its streaming division, and it’s possible it may consider unloading its book publishing division HarperCollins. Should moves like that materialize and the company feels it’s in a stronger financial position, it may decide to revisit its dividend policy, but until then potential investors shouldn’t expect anything on that front.
News Corporation (NASDAQ:NWS) tops the list in terms of popularity among hedge funds, though ownership of the stock is down by 40% since 2013. Value investor Donald Yacktman’s Yacktman Asset Management owns the most substantial stake in NWS as of June 30, holding 16.5 million shares worth $256 million.
L1 Capital is also bullish on News Corporation (NASDAQ:NWS), believing the company’s collection of assets are being mispriced by the market, as revealed in the fund’s Q2 2022 investor letter:
“News Corporation (NASDAQ:NWS) (Long -26%) shares fell over the quarter despite reporting third quarter results in line with consensus expectations. The decline was primarily driven by a softening in investor sentiment towards News Corp’s Digital Real Estate assets against a backdrop of rising interest rates in both Australia and the U.S., with REA Group shares down 17% during the quarter. While concerns over property market drivers are likely to continue in the near term, we see both REA Group and Move as being well positioned to structurally improve their businesses through this period. We continue to believe the News Corp assets are materially under-valued and remain supportive of ongoing initiatives to unlock value across the Group.”
For more of the latest stock picks worth considering for your portfolio, check out the 25 Most Educated Countries in the World and 11 Best Very Cheap Stocks To Buy Now.
Disclosure: None.
