In this article, we will discuss the 5 best dividend stocks to buy according to Arosa Capital Management. If you want to read our detailed analysis of the hedge fund’s investment strategies, go directly to read 10 Best Dividend Stocks To Buy According to Arosa Capital Management.
5. Baker Hughes Company (NYSE:BKR)
Number of Hedge Fund Holders: 37
Dividend Yield as of February 16: 2.42%
Arosa Capital’s Stake Value: $8,045,000
Baker Hughes Company (NYSE:BKR) is an American industrial service company that offers oil field services to consumers. In Q4 2021, Arosa Capital increased its stake by 12% in the company and held shares worth over $8 million. Baker Hughes Company (NYSE:BKR) represented 1.98% of the hedge fund’s 13F portfolio.
Baker Hughes Company (NYSE:BKR) pays a quarterly dividend of $0.18 per share, with a dividend yield of 2.42%. The company pays over $647 million in dividends annually to shareholders. In January, Cowen acknowledged the company’s role in its use of green energy and lifted its price target on Baker Hughes Company (NYSE:BKR) to $35, with an Outperform rating on the shares.
Insider Monkey’s data for Q3 shows that 37 hedge funds were bullish on Baker Hughes Company (NYSE:BKR), down from 40 in the previous quarter. These stakes hold a value of over $1 billion. Pzena Investment Management was the company’s leading shareholder in Q3, holding a stake worth roughly $599 million.
Madison Funds mentioned Baker Hughes Company (NYSE:BKR) in its Q3 2021 investor letter. Here is what the investment management firm has to say:
“BKR is a leading oilfield services provider that helps its customers with oil and gas exploration and production. Its customers include companies that discover oil, energy data management firms, drilling companies, well construction, and production and completion firms. The firm is also synonymous with the U.S. rig count. BKR also helps make energy cleaner and more efficient, and is a leader in energy transition businesses, including carbon capture and hydrogen, along with being a market leader in supplying equipment for liquified natural gas (LNG) projects….”
4. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 29
Dividend Yield as of February 16: 3.98%
Arosa Capital’s Stake Value: $6,514,000
A British multinational oil and gas company, BP p.l.c. (NYSE:BP) recently announced its Q4 results and reported a 73% growth in its quarterly revenue at $52.2 billion. Given this, Wall Street analysts remained positive on the company, as recently, both Morgan Stanley and JPMorgan raised their price targets on the stock to 465 GBP and 600 GBP, respectively.
In August 2021, BP p.l.c. (NYSE:BP) hiked its quarterly dividend by 4% at $0.3276 per share. The stock’s current dividend yield stands at 3.98%. BP p.l.c. (NYSE:BP) expects to increase its dividend by 4% annually through 2025. Arosa Capital made its first investment in the company during the first quarter of 2016. In Q4 2021, the hedge fund held shares worth over $6.5 million in BP p.l.c. (NYSE:BP), which represented 1.6% of its 13F portfolio.
By the end of Q3 2021, 29 hedge funds tracked by Insider Monkey reported owning stakes in BP p.l.c. (NYSE:BP), compared with 30 in the preceding quarter. These stakes hold a consolidated value of over $1 billion.
3. Clearway Energy, Inc. (NYSE:CWEN)
Number of Hedge Fund Holders: 17
Dividend Yield as of February 16: 4.16%
Arosa Capital’s Stake Value: $5,405,000
Clearway Energy, Inc. (NYSE:CWEN) is an American energy company that is also one of the largest operators of clean energy in the country. In Q3 2021, the company announced a 1.6% increase in its quarterly dividend at $0.34 per share. The stock’s dividend yield stands at 4.16%.
The number of hedge funds in Insider Monkey’s database having stakes in Clearway Energy, Inc. (NYSE:CWEN) stood at 17 in Q3 2021, down from 21 in the previous quarter. The total value of these stakes is over $151.6 million. Jim Simons’ Renaissance Technologies held the largest stake in the company in Q3, worth $34.5 million.
In Q4 2021, Arosa Capital Management held a stake worth over $5.4 million in Clearway Energy, Inc. (NYSE:CWEN), after increasing its position in the company by 50%. The company made up 1.33% of the hedge fund’s portfolio. This December, Morgan Stanley raised its price target on Clearway Energy, Inc. (NYSE:CWEN) to $37, with an Equal Weight rating on the shares, as the firm upgraded its Clean Tech industry view to Attractive.
2. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 51
Dividend Yield as of February 16: 4.20%
Arosa Capital’s Stake Value: $11,002,000
Chevron Corporation (NYSE:CVX), an American multinational energy company, experienced a slight growth in the number of hedge funds having stakes in it in Q3. 51 hedge funds tracked by Insider Monkey were bullish on the company in the third quarter, up from 50 in the previous quarter. The total value of these stakes is over $4.44 billion.
Chevron Corporation (NYSE:CVX) gained ground among analysts as the company managed to increase its dividend during the last year’s oil crash, unlike its counterparts, who slashed their dividends during this time. On January 26, Chevron Corporation (NYSE:CVX) announced a 6% increase in its quarterly dividend at $1.42 per share, with a yield of 4.20%. Moreover, the company maintains a 35-year track record of consistent dividend growth. In February, Barclays raised its price target on Chevron Corporation (NYSE:CVX) to $148, with an Overweight rating on the shares.
In Q4 2021, Chevron Corporation (NYSE:CVX) was the sixth-largest holding of Arosa Capital. The hedge fund held 93,750 million shares in the company, valued at over $11 million. Chevron Corporation (NYSE:CVX) accounted for 2.71% of the fund’s portfolio.
Goehring & Rozencwajg Associates mentioned Chevron Corporation (NYSE:CVX) in its Q3 2021 investor letter. Here is what the firm has to say:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
1. Valero Energy Corporation (NYSE:VLO)
Number of Hedge Fund Holders: 32
Dividend Yield as of February 16: 4.35%
Arosa Capital’s Stake Value: $2,536,000
Valero Energy Corporation (NYSE:VLO) is a Texas-based energy company that manufactures fuels, petrochemical products, and power. In Q4 2021, the company represented 0.62% of Arosa Capital, as the hedge fund held a stake worth over $2.5 million in the company.
Valero Energy Corporation (NYSE:VLO) managed to sustain its dividend throughout the pandemic and currently pays a quarterly dividend of $0.98 per share. The stock’s dividend yield stands at 4.35%. On January 25, Piper Sandler raised its price target on Valero Energy Corporation (NYSE:VLO) to $95, with an Overweight rating on the shares, as the firm sees an increased demand for crude oil in 2022.
At the end of Q3 2021, 32 hedge funds tracked by Insider Monkey reported owning positions in Valero Energy Corporation (NYSE:VLO), down from 38 in the previous quarter. These stakes hold a value of over $289 million.
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