In this article, we will take a look at the 5 best consumer discretionary dividend stocks to buy now. To see more such companies, go directly to 15 Best Consumer Discretionary Dividend Stocks To Buy Now.
5. Macy’s, Inc. (NYSE:M)
Number of Hedge Fund Holders: 41
Department store company Macy’s, Inc. (NYSE:M)’s ranks 5th in our list of the best consumer discretionary dividend stocks. Macy’s, Inc. (NYSE:M) recently declared a quarterly dividend of $0.1654 per share, which was a 5% increase from the prior dividend of $0.1575. The latest dividend is payable on April 3 to shareholders of record as of March 15.
Macy’s, Inc. (NYSE:M)’s saw a strong uptick in hedge fund sentiment in the fourth quarter. At the end of the December quarter, 41 hedge funds reported owning stakes in Macy’s, Inc. (NYSE:M), up from 31 hedge funds in the previous quarter.
4. Bath & Body Works, Inc. (NYSE:BBWI)
Number of Hedge Fund Holders: 46
Bath & Body Works, Inc. (NYSE:BBWI) sells home fragrances, body care, soap and sanitizer products.
As of the end of the fourth quarter of 2022, 46 hedge funds out of the 943 funds in Insider Monkey’s proprietary database reported owning stakes in Bath & Body Works, Inc. (NYSE:BBWI). The total value of these stakes was about $3 billion.
In February, Bath & Body Works, Inc. (NYSE:BBWI) declared a quarterly dividend of $0.20 per share, in line with the previous dividend. Forward dividend yield came in at 1.7%. The dividend was payable on March 3.
Recently, Bath & Body Works, Inc. (NYSE:BBWI) appointed Thomas Kuhn as a new independent member of the board of directors on the recommendation of Dan Loeb’s Third Point LLC, a move which has staved off a proxy battle by the hedge fund, according to Wall Street Journal.
Third Point made the following comment about Bath & Body Works, Inc. (NYSE:BBWI) in its Q4 2022 investor letter:
“We initiated a position in Bath & Body Works, Inc. (NYSE:BBWI) earlier in the year that we added to significantly in the Fourth Quarter. The company, which sells personal care and home fragrance products, separated from Victoria’s Secret in late 2021 and has struggled to find its footing in the public markets. Bath & Body Works was challenged by the normalization of trends following the pandemic, but also suffered from execution hiccups that made matters worse. On the operations front, the company spent much of 2022 without a permanent CEO, cut guidance multiple times given inventory and cost pressures, and did a poor job communicating meaningful increases in the company’s cost structure as a standalone business. On the capital allocation front, the execution of an accelerated share repurchase program was sloppy at best.
Despite these recent struggles, we believe BBWI can change its equity story, improve its earnings power, and earn a more premium valuation. The recent appointment of a new CEO, Gina Boswell from Unilever, is an encouraging first step…” (Click here to read the full text)
3. eBay Inc. (NASDAQ:EBAY)
Number of Hedge Fund Holders: 47
eBay Inc. (NASDAQ:EBAY) ranks 3rd in our list of the best consumer discretionary dividend stocks. During the fourth quarter, the e-commerce company returned more than $419 million to shareholders, which includes $119 million in cash dividends.
In February, eBay Inc. (NASDAQ:EBAY) declared a quarterly dividend of $0.25 per share, which was a massive 14% increase from the prior quarterly dividend.
At the end of the last quarter of 2022, 47 hedge funds tracked by Insider Monkey reported having stakes in eBay Inc. (NASDAQ:EBAY). The total value of these stakes was about $1.3 billion. The biggest stakeholder of eBay Inc. (NASDAQ:EBAY) was Richard Mashaal’s Rima Senvest Management which owns a $267 million stake in the company.
Here is what Smead Value Fund has to say about eBay Inc. (NASDAQ:EBAY) in its Q3 2022 investor letter:
“Two things are very noticeable right off the top. First, sometimes you have to be happy losing less in a bear market environment so that you have more of your capital to grow in the next bull market. We are never really happy losing money. Second, 2022 is likely to be our third year of existence as a fund to lose money for the year. This year would join 2008 and 2018 in this undistinguished category. Our biggest detractors was dominated by eBay (NASDAQ:EBAY). Consumer/investor fears about media and e-commerce hit WBD and EBAY and profit taking in Amgen came from early 2022 strength.”
2. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 57
McDonald’s Corporation (NYSE:MCD)’s is one of the best consumer discretionary dividend stocks. McDonald’s Corporation (NYSE:MCD) has over 45 years of consistent dividend increases under its belt. McDonald’s Corporation (NYSE:MCD) has weathered several market ups and downs and has the ability to withstand the current economic turmoil.
During the fourth quarter, McDonald’s Corporation (NYSE:MCD)’s adjusted EPS came in at $2.59, beating estimates by $0.13. Revenue in the period fell 1.2% on a YoY basis to reach $5.93 billion, beating estimates by $180 million.
At the end of the fourth quarter of 2022, 57 hedge funds tracked by Insider Monkey reported having stakes in McDonald’s Corporation (NYSE:MCD). The biggest stakeholder of McDonald’s Corporation (NYSE:MCD) is Ray Dalio’s Bridgewater Associates which owns a $416 million stake in the company.
1. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 62
In February, The Home Depot, Inc. (NYSE:HD) increased its quarterly dividend by 10%.
As of the end of the fourth quarter of 2022, 62 hedge funds out of the 943 hedge funds tracked by Insider Monkey reported owning stakes in The Home Depot, Inc. (NYSE:HD). The net worth of these stakes was $4.8 billion. The biggest hedge fund stakeholder of The Home Depot, Inc. (NYSE:HD) during this period was Ric Dillon’s Diamond Hill Capital which owns a $340 million stake in the company.
Matrix Asset Advisors made the following comment about The Home Depot, Inc. (NYSE:HD) in its Q3 2022 investor letter:
“During the quarter, we re-established a position in The Home Depot, Inc. (NYSE:HD) sold earlier this year, after the shares declined sharply on big picture concerns about a softer housing market and lower consumer spending. We believe that HD is a very well-managed company, positioned to continue showing good profits even as the economy decelerates. The products it carries in inventory are in year-round demand from contractors and homeowners wanting to maintain and improve their homes. The company has historically been shareholder friendly, repurchasing shares and increasing the dividend, most recently by 15% earlier this year. On September 30, HD’s current dividend yield was 2.8%.”
You can also take a peek at 15 Best Short-Term Stocks to Buy and 10 Best Stocks to Buy for High Returns.
