In this article, we discuss the 5 best dividend stocks according to Anthony Bozza’s Lakewood Capital Management. If you want to read our detailed analysis of the hedge fund as well as five of its other top dividend stock picks, check out 10 Best Dividend Stocks According to Anthony Bozza’s Lakewood Capital.
5. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 80
Dividend Yield as of February 24: 2.39%
Lakewood Capital’s Stake Value: $54,291,000
Comcast Corporation (NASDAQ:CMCSA), an American multinational tech company, experienced positive hedge fund sentiment in Q4, as 80 hedge funds tracked by Insider Monkey held stakes in the company as of December 31, up from 75 a quarter earlier. The total value of those stakes was over $8.6 billion.
On January 27, Comcast Corporation (NASDAQ:CMCSA) raised its quarterly dividend by 8%, marking the company’s 14th consecutive year of dividend growth. The company pays a quarterly dividend of $0.27 per share, which yields 2.39% as of February 24. This January, Cowen raised its price target on Comcast Corporation (NASDAQ:CMCSA) to $64, while maintaining an ‘Overweight’ rating on the shares.
Lakewood Capital started its investment in Comcast Corporation (NASDAQ:CMCSA) during the first quarter of 2015, owning shares worth $18.6 million at that time. Following the close of Q4 2021, the hedge fund held a stake worth $54.3 million after increasing its position in the company by 5% to nearly 1.08 million shares. Comcast Corporation (NASDAQ:CMCSA) accounted for 2.3% of Anthony Bozza’s 13F portfolio value.
ClearBridge Investments mentioned Comcast Corporation (NASDAQ:CMCSA) in its Q2 2021 investor letter. Here is what the firm had to say:
“We funded the shift primarily with trims in Comcast following big gains in this name. Comcast is a long-term holding that have been and remain core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
Comcast, like Blackstone, has been a meaningful long-term holding whose stock performance has at times lagged its robust fundamental performance. Over the last nine months the stock price caught up some with the fundamentals and looked like it had more room to run. Our thesis on the name evolved, however, following the May 17 announcement that competitor Discovery was merging its operations with Time Warner. This deal positions the new company as a credible competitor to Netflix, Amazon Prime, Hulu and Disney, and results in Comcast being left without the proverbial dance partner in the evolving pay TV/DTC landscape. While we continue to believe Comcast’s cable systems business is well-positioned and that NBCUniversal remains valuable, the competitive dynamic for NBCUniversal has stiffened. Our reduced position size reflects both our continued enthusiasm for many parts of the franchise and emerging concerns given the evolving pay TV/DTC landscape.”
4. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 48
Dividend Yield as of February 24: 2.49%
Lakewood Capital’s Stake Value: $62,884,000
In Q4 2021, Lakewood Capital increased its stake in Ally Financial Inc. (NYSE:ALLY) by 27% to 1.32 million shares worth $62.9 million. The American bank holding company accounted for 2.66% of Anthony Bozza’s portfolio.
Insider Monkey’s Q4 data showed that the number of hedge funds holding long positions in Ally Financial Inc. (NYSE:ALLY) declined to 48 from 57 during the quarter,. with the total worth of those stakes standing at $2.4 billion.
Ally Financial Inc. (NYSE:ALLY) announced a 20% boost to its quarterly dividend on January 11. The company currently pays a quarterly dividend of $0.30 per share, with a dividend yield of 2.49% as of February 24. The company’s 5-year dividend CAGR stands at 44%, which makes it one of the best dividend stocks in Anthony Bozza’s portfolio. In January, JPMorgan set a $56 price target on Ally Financial Inc. (NYSE:ALLY), with a ‘Neutral’ rating on the shares.
3. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders: 19
Dividend Yield as of February 24: 2.78%
Lakewood Capital’s Stake Value: $12,145,000
Diageo plc (NYSE:DEO) is a London-based multinational beverage alcohol company with operations in over 180 countries. Wall Street analysts have appreciated the company’s strategic acquisitions during the pandemic. In February, both Barclays and Credit Suisse lifted their price targets on the stock.
On February 23, Diageo plc (NYSE:DEO) announced a 5% increase to its interim dividend at 0.2936 GBP per share, giving shares a dividend yield of 2.78% as of February 24. Diageo plc (NYSE:DEO) maintains a 34-year track record of consistent dividend growth, falling in the category of Dividend Aristocrats.
In Q4, the company accounted for 0.51% of Anthony Bozza’s portfolio, with Lakewood owning 55,168 shares. Lakewood was one of 19 hedge funds tracked by Insider Monkey that reported owning stakes in Diageo plc (NYSE:DEO) as of December 31, up from 18 in the previous quarter. The total value of those stakes was roughly $936 million. Ako Capital held a $383 million stake in the company, being its largest shareholder among that group.
Weitz Investment Management mentioned Diageo plc (NYSE:DEO) in its Q1 2021 investor letter. Here is what the firm had to say:
“We sold Diageo after twelve years of very profitable ownership. The global spirits company has done a fine job of growing earnings, and the stock has enjoyed an extra boost from substantial, multiple expansions along the way. While the business is in good hands, we think a repeat of our mid-double-digit annualized return experience is far less likely. We simply see better risk/reward profiles in the Fund’s other quality holdings.”
2. First American Financial Corporation (NYSE:FAF)
Number of Hedge Fund Holders: 30
Dividend Yield as of February 24: 3.13%
Lakewood Capital’s Stake Value: $93,454,000
First American Financial Corporation (NYSE:FAF), an American financial services company, announced a raise to its quarterly dividend in November, with shareholder payouts increasing by 11% to $0.51 per share. The stock’s dividend yield stands at 3.13% as of February 24. First American Financial Corporation (NYSE:FAF) has increased its dividend at a CAGR of 11.2% over the past five years, earning its place as one of the best dividend stocks in Anthony Bozza’s portfolio.
The number of hedge funds tracked by Insider Monkey holding stakes in First American Financial Corporation (NYSE:FAF) stood at 30 at the end of Q4, up from 29 in the previous quarter. Lakewood was one of those funds, owning 1.19 million shares, a drop of 13% quarter-over-quarter.
According to Barclays, the finance sector and investment income are well-positioned to benefit from rising rates. Considering this, the firm raised its price target on First American Financial Corporation (NYSE:FAF) to $92 in February, with an ‘Overweight’ rating on the shares.
1. Jackson Financial Inc. (NYSE:JXN)
Number of Hedge Fund Holders: 21
Dividend Yield as of February 24: 5.00%
Lakewood Capital’s Stake Value: $44,549,000
Jackson Financial Inc. (NYSE:JXN), an American life insurance company, initiated its dividend policy in November 2021. The company pays a quarterly dividend of $0.50 per share, with a solid dividend yield of 5.00% as of February 24. On January 25, Jefferies initiated its coverage on Jackson Financial Inc. (NYSE:JXN) with a ‘Buy’ rating and $52 price target, with the firm being bullish on the company’s cash flows.
In Q4 2021, Lakewood Capital increased its stake in Jackson Financial Inc. (NYSE:JXN) by 14% to 1.07 million shares worth over $44.5 million. The company represented 1.89% of Anthony Bozza’s 13F portfolio.
Lakewood was one of the 21 hedge funds tracked by Insider Monkey that reported owning stakes in Jackson Financial Inc. (NYSE:JXN) as of the end of 2021, down from 22 in the previous quarter. The total value of those stakes was roughly $450 million.
Curreen Capital mentioned Jackson Financial Inc. (NYSE:JXN) in its Q4 2021 investor letter. Here is what the firm had to say:
“We cut a weed with Conduent to water a flower with Jackson. We added to Jackson, which has blossomed into a flower. In our Q3 letter I highlighted the limited information on this recent spinoff – and management has capably addressed many of the unknowns. On capital allocation, Jackson initiated a dividend and a share repurchase plan for about 10% of the company. Management then moved quickly and bought back at least 5% of Jackson’s shares at very attractive prices. Management refinanced its short-term debt on attractive terms. A director and an executive also bought stock in the quarter. Each of these actions made Jackson more of a flower. We averaged up (paying $32.78/share) and made Jackson our largest holding.”
For additional compelling dividend stock picks, take a look at 10 Dividend Aristocrats with Over 3% Yield and 10 High Yield Dividend Kings for 2022
