In this article we discuss the 5 best dividend stocks to buy according to Cathie Wood. If you want to read our detailed analysis of Wood‘s history, and hedge fund performance, go directly to the 10 Best Dividend Stocks to Buy According to Cathie Wood.
5. PACCAR Inc (NASDAQ: PCAR)
Number of Hedge Fund Holders: 28
Dividend Yield: 1.50%
PACCAR Inc (NASDAQ: PCAR) is a Washington-based company that makes and sells medium and heavy duty trucks. It was founded in 1905 and is placed fifth on our list of 10 best dividend stocks to buy according to Cathie Wood. PACCAR stock has offered investors returns exceeding 22% in the past year. The hedge fund run by Cathie Wood owns more than 3.1 million shares in the truck maker worth over $293 million, representing 0.58% of their portfolio. This holding was disclosed in the latest ARK Investment filing with the SEC.
PACCAR Inc (NASDAQ: PCAR) is among the best stocks in the ARK portfolio that pay a regular and healthy dividend to shareholders. In late April, PACCAR declared a quarterly dividend of $0.34 per share, a more than 6% increase from the previous dividend of $0.32 per share.
Out of the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in PACCAR Inc (NASDAQ: PCAR) with 1.1 million shares worth more than $109 million.
In its Q1 2020 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and PACCAR Inc (NASDAQ: PCAR) was one of them. Here is what the fund said:
“Shares of truck manufacturer PACCAR, Inc. fell as the North American Class 8 market continued its cyclical decline, and the outlook for sales and production took another step back with the economic impact from the pandemic.”
4. Caterpillar Inc. (NYSE: CAT)
Number of Hedge Fund Holders: 53
Dividend Yield: 1.74%
Caterpillar Inc. (NYSE: CAT) is an Illinois-based company that makes and sells machinery, engines, and financial products. It was founded in 1925 and is ranked fourth on our list of 10 best dividend stocks to buy according to Cathie Wood. Caterpillar stock has returned more than 96% to investors over the past year. ARK Investment owns 381,967 shares in the company worth over $88 million, representing 0.17% of their portfolio. Caterpillar stock has soared in recent weeks amid speculation around increased government spending on public infrastructure.
On April 29, Caterpillar Inc. (NYSE: CAT) stock jumped close to 1.6% as the firm posted strong earnings results for the first quarter of 2021, reporting net income rose to $1.53 billion or $2.77 per share, compared to just over $1 billion over the same period in the previous year.
At the end of the first quarter of 2021, 53 hedge funds in the database of Insider Monkey held stakes worth $4.9 billion in Caterpillar Inc. (NYSE: CAT)), the same as in the preceding quarter worth $4.1 billion.
3. Lockheed Martin Corporation (NYSE: LMT)
Number of hedge fund holders: 50
Dividend Yield: 2.70%
Lockheed Martin Corporation (NYSE: LMT) is a Maryland-based company that deals in aerospace, arms, defense, security, and advanced technologies. It was founded in and is placed third on our list of 10 best dividend stocks to buy according to Cathie Wood. Lockheed stock has returned more than 12% to investors over the past three months. The hedge fund managed by Wood holds more than 276,000 shares in the defense company worth over $102 million, representing 0.2% of their portfolio. This holding was also disclosed to the public in the latest filing with the SEC by ARK Investment.
When it comes to dividend payouts, Lockheed Martin Corporation (NYSE: LMT) is one of the best options in the ARK Investment portfolio. On April 21, the company declared a quarterly dividend of $2.60 per share, in line with previous.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm Arrowstreet Capital is a leading shareholder in Lockheed Martin Corporation (NYSE: LMT) with 1.5 million shares worth more than $590 million.
In its Q4 2020 investor letter, RiverPark Advisors, LLC, an asset management firm, highlighted a few stocks and Lockheed Martin Corporation (NYSE: LMT) was one of them. Here is what the fund said:
“Despite better-than-expected third quarter results, LMT shares were weak for the quarter as defense spending is expected to be flat for the coming year. With a record $150 billion backlog and almost 30% of its revenue coming from building F-35 aircraft with deliveries forecast to reach 180 per year in 4-5 years (3Q’s revenue upside was from the F-35), we believe LMT should grow at a higher rate than overall defense budget growth and Street expectations over the next several years. Further, strategic acquisitions (LMT acquired AJRD for $4 billion in late December), debt pay down, a 3% dividend yield, and continued share buybacks from $6 billion per year of free cash flow should lead to even greater shareholder returns.”
2. Bristol-Myers Squibb Company (NYSE: BMY)
Number of hedge fund holders: 81
Dividend Yield: 2.94%
Bristol-Myers Squibb Company (NYSE: BMY) is a New York-based pharmaceutical company founded in 1887. It is ranked second on our list of 10 best dividend stocks to buy according to Cathie Wood. Bristol stock has offered investors more than 10% in returns over the past year. ARK Investment Management holds more than 2.1 million shares in the company worth over $137 million, representing 0.27% of their portfolio. Bristol is one of the largest pharmaceutical companies in the world and posted over $40 billion in revenue in 2020.
On April 30, investment bank Morgan Stanley downgraded Bristol-Myers Squibb Company (NYSE: BMY) stock to Equal Weight from Overweight with a price target of $62, slashed more than 11% from the previous target.
At the end of the first quarter of 2021, 81 hedge funds in the database of Insider Monkey held stakes worth $5 billion in Bristol-Myers Squibb Company (NYSE: BMY), down from 131 in the preceding quarter worth $6 billion.
In its Q4 2020 investor letter, Wedgewood Partners, an asset management firm, highlighted a few stocks and Bristol-Myers Squibb Company (NYSE: BMY) was one of them. Here is what the fund said:
“Bristol-Myers Squibb recently reported accelerating sales as much of the medical services industry returned to work. The Company continues to expect double-digit earnings growth over the next few years, driven by existing drugs, in addition to a broad pipeline of new drugs and indications. While the market remains fixated on a couple of patent expirations that could occur over the next several years, we think this is well-known at this point, yet the market still undervalues a couple of key acquisitions the Company has made in the past few years, particularly Celgene, which was acquired for a song.”
1. Novartis AG (NYSE: NVS)
Number of Hedge Fund Holders: 19
Dividend Yield: 3.59%
Novartis AG (NYSE: NVS) is a Switzerland-based company that markets health products. It was founded in 1996 and is ranked first on our list of 10 best dividend stocks to buy according to Cathie Wood. Novartis stock has returned more than 3.3% to investors over the past twelve months. ARK Investment holds more than 7.2 million shares in the healthcare firm worth over $618 million, representing more than 1.2% of their investment portfolio. Novartis markets biotechnology and pharmaceutical products.
Back in February, Novartis AG (NYSE: NVS) stock was downgraded to Market Perform from Outperform by investment advisory Cowen with a revised price target of $105 from $110 on the back of new pressures to the latest drug offering from the biotech firm.
At the end of the first quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in Novartis AG (NYSE: NVS), down from 23 the preceding quarter worth $1.6 billion.
In its Q4 2020 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Novartis AG (NYSE: NVS) was one of them. Here is what the fund said:
“Novartis is one of Europe’s largest pharmaceutical companies and possesses a highly diversified portfolio of innovative products. Its share price underperformed both the broader market and its pharma peers during 2020, largely due to a few disappointing late-stage trials and the company’s lack of Covid-19-related therapeutics or vaccines. These short-term issues provided us with an attractive entry point to invest in a leading pharmaceutical franchise with compelling economics. We estimate that the market is currently ascribing almost no value to Novartis’ pipeline despite the company’s excellent track record in new drug development. We expect that Novartis will deliver mid-single-digit, top-line growth and expand margins over the next five years as a result of its cost-savings plan. The company possesses one of the most diversified product portfolios in the pharma industry with 15 $1b+ compounds, which reduces its reliance on any single compound.”
You can also take a peek at Eagle Capital’s Top 10 Stock Picks and Billionaire David Siegel’s Top 10 Stock Picks.
