In this article, we discuss the 10 best dividend stocks to buy according to Israel Englander’s Millennium Management.
Israel Englander founded Millennium Management in 1989 and currently serves as the CEO and CIO of the firm. Millennium Management is a global alternative management firm that specializes in diverse investment strategies across various sectors. The fund’s mission is to deliver positive returns to shareholders while managing current market risks. As of August, the firm has over $56.6 billion in assets under management.
Millennium Management focuses on a quantitatively-driven investment strategy and manages a number of areas, including macro, credit, mortgages, and asset-backed securities. Over the years, the hedge fund has generated solid returns for shareholders. In 2020, it remained one of the biggest winners, as its flagship fund returned 20% and generated $10.2 billion for investors, as reported by Business Insider. In 2021, the fund gained 13.5%, outperforming the majority of its peers. In addition to this, Israel Englander remained one of the highest-earning hedge fund managers last year, making over $3.1 billion, according to Institutional Investor.
Millennium Management has been returning money to investors since 2018 to build a more stable capital base. According to a report by Bloomberg, the hedge fund returned about $15 billion to investors in 2021, while raising $10 billion for the firm’s long-term share class, a move that gives shareholders the option to make a full exit from the fund over a period of five years and invest for the long term.
As of the close of Q2 2022, Millennium Management’s 13F portfolio had a value of over $161 billion, down from $189 billion in the previous quarter. The technology and services sector constituted a major portion of the fund’s portfolio, while consumer goods, finance, and utilities took up considerable sections. Some of the fund’s major holdings include Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG). However, in this article, we will discuss the best dividend stocks to buy according to Israel Englander’s Millennium Management.
Israel Englander of Millennium Management
Our Methodology:
For this article, we selected dividend stocks from Millennium Management’s 13F portfolio, as of Q2 2022. The stocks are ranked according to the value of Millennium Management’s stake in those companies.
Best Dividend Stocks to Buy According to Israel Englander’s Millennium Management
10. Morgan Stanley (NYSE:MS)
Millennium Management’s Stake Value: $218,241,000
In addition to Tesla, Inc., Amazon.com, Inc., and Alphabet Inc., Morgan Stanley (NYSE:MS) is also one of the prominent holdings of the hedge fund in Q2. Millennium Management started investing in the American multinational financial services and investment management firm during the fourth quarter of 2010, purchasing shares worth over $2 million. In Q2 2022, the hedge fund bought an additional 1 million MS shares, boosting its position in the company by 81%. The fund’s MS stake amounted to over $218 million in Q2, which represented 0.13% of Millennium Management’s portfolio.
On July 14, Morgan Stanley declared a quarterly dividend of $0.775 per share, up 11% from its previous dividend. As of August 26, the stock’s dividend yield stood at 3.54%.
In July, Barclays set a $108 price target on Morgan Stanley with an ‘Overweight’ rating on the shares, highlighting the company’s trading and investment management revenues.
At the end of Q2 2022, 58 hedge funds in Insider Monkey’s database owned stakes in Morgan Stanley, down from 61 in the previous quarter. The collective value of those stakes was roughly $3 billion. Eagle Capital Management was the company’s leading stakeholder in Q2, owning a position worth over $1 billion.
Sound Shore Management mentioned Morgan Stanley in its Q2 2022 investor letter. Here is what the firm had to say:
“Morgan Stanley (NYSE:MS) is a long term holding, retreated despite having business models that are more resilient, over-capitalized and underappreciated by the market. In June, the Federal Reserve’s stress tests again blessed the health of the overall banking system. Morgan Stanley stood out with an 11% increase in its annual dividend, yielding 4.1% at quarter’s end.”
9. Canadian National Railway Company (NYSE:CNI)
Millennium Management’s Stake Value: $219,250,000
Canadian National Railway Company (NYSE:CNI), a Canadian freight railway company, holds a 22-year track record of consistent dividend growth. The company pays a quarterly dividend of C$0.7325 per share, which gives the stock a yield of 1.82%, as recorded on August 26.
Millennium Management retook an ownership position in Canadian National Railway Company in the second quarter of 2019, after selling off its entire stake worth over $5 million in Q4 2018. The hedge fund increased its position in the company by 533% in Q2 2022, buying over 1.6 million CNI shares. The fund’s total stake in the company stood at nearly $220 million, which represented 0.13% of Israel Englander’s portfolio.
In July, Desjardins raised its price target on Canadian National Railway Company to C$169 while maintaining a ‘Hold’ rating on the shares.
As of the end of Q2 2022, 42 hedge funds tracked by Insider Monkey reported owning stakes in Canadian National Railway Company, up from 41 a quarter earlier. The total value of those stakes was over $7 billion, compared with $8.1 billion worth of CNI shares owned by hedge funds in the preceding quarter.
8. FedEx Corporation (NYSE:FDX)
Millennium Management’s Stake Value: $226,856,000
FedEx Corporation (NYSE:FDX) is a Tennessee-based transport company with a focus on e-commerce and related transport services. In Q2 2022, Millennium Management owned 1 million shares in the company, worth nearly $227 million. The hedge fund boosted its position in the company by 14% during the quarter. FDX represented 0.14% of Israel Englander’s portfolio.
On August 12, FedEx Corporation declared a quarterly dividend of $1.15 per share, raising it by 53% in June. This was the company’s 21st consecutive year of dividend growth, while the stock has a 5-year dividend growth rate of 13.4%. As of August 26, the stock’s dividend yield stood at 2.08%.
Appreciating the company’s guidance for FY23-FY25, BofA lifted its price target on FedEx Corporation to $287 in June and kept a ‘Buy’ rating on the shares.
According to Insider Monkey’s database, Ken Griffin, Mason Hawkins, and D. E. Shaw were some of the most prominent stakeholders of FedEx Corporation in Q2, owning collective stakes worth millions of dollars. Overall, 63 hedge funds owned stakes in the transport company in Q2 with a total value of over $1.7 billion.
7. Merck & Co., Inc. (NYSE:MRK)
Millennium Management’s Stake Value: $271,527,000
Merck & Co., Inc. is a New Jersey-based pharmaceutical company that specializes in innovative health solutions. The company was in 79 hedge funds’ 13F portfolios in Q2 2022, compared with 84 in the previous quarter, according to Insider Monkey’s data. The stakes owned by those funds held a total value of over $6.1 billion.
Millennium Management started reinvesting in Merck & Co., Inc. during the second quarter of 2019, as it built a position worth over $1.7 million. In Q2 2022, the hedge fund owned roughly 3 million MRK shares, increasing its position in the company by 6% during the quarter. The holding was valued at $272 million, which accounted for 0.16% of Israel Englander’s portfolio.
Merck & Co., Inc. currently pays a quarterly dividend of $0.69 per share and the stock has a yield of 3.07%, as of August 26. The company maintains an 11-year streak of consistent dividend growth.
In August, Erste Group upgraded Merck & Co., Inc. to ‘Buy’, mentioning that the company’s profits are well above the sector’s average and are expected to grow further in the future.
Smead Capital Management mentioned Merck & Co., Inc. in its Q2 2022 investor letter. Here is what the firm had to say:
“For the quarter, our best-performing stocks included Merck & Co., Inc. (NYSE:MRK). Despite a steep sell-off in June in the oil and gas stocks, two of our oil stocks made the quarterly list. Merck’s defensive characteristics and good news on earnings/growth didn’t shock us. We argued one year ago that Merck was historically cheap relative to the indexes as compared to the last 20 years.”
6. McKesson Corporation (NYSE:MCK)
Millennium Management’s Stake Value: $271,718,000
McKesson Corporation (NYSE:MCK) is an American healthcare company that distributes pharmaceuticals and provides related services to its consumers. On July 25, McKesson Corporation hiked its quarterly dividend by 15% to $0.54 per share. This marked the company’s sixth consecutive year of dividend growth. As of August 26, the stock’s dividend yield was recorded at 0.60%.
Appreciating the company’s quarterly earnings, Morgan Stanley raised its price target on McKesson Corporation to $403 in August, with an ‘Overweight’ rating on the shares.
As per Insider Monkey’s Q2 2022 database, 47 hedge funds reported owning stakes in McKesson Corporation as of June 30, down from 59 in the previous quarter. The combined value of those stakes was over $4.4 billion. With a position valued at over $1 billion, Berkshire Hathaway owned the largest stake in the company in Q2.
McKesson Corporation has been a part of Millennium Management’s portfolio since 2010, when the hedge fund owned $76 million worth of MCK shares. In Q2 2022, the fund increased its position in the company by 24%, which took its total stake to $272 million. The company represented 0.16% of Israel Englander’s portfolio. MCK is one of the fund’s most important holdings along with Tesla, Inc., Amazon.com, Inc., and Alphabet Inc..
Baron Funds mentioned McKesson Corporation in its Q2 2022 investor letter. Here is what the firm had to say:
“McKesson Corporation is a leading distributor of pharmaceuticals and medical supplies. The company contributed to performance due to solid financial results and investor rotation into stocks trading at lower valuation multiples of earnings. We continue to believe the stock is inexpensive in light of McKesson’s strong competitive position in growing end-markets and earnings growth potential.”
5. Microsoft Corporation (NASDAQ:MSFT)
Millennium Management’s Stake Value: $280,863,000
Microsoft Corporation (NASDAQ:MSFT) has been in Millennium Management’s portfolio since 2010. In Q2 2022, the hedge fund owned over 1 million shares in the company with a total value of $281 million. The fund increased its MSFT stake by 13% during the quarter. The company represented 0.17% of Israel Englander’s portfolio.
Microsoft Corporation currently pays a quarterly dividend of $0.62 per share, with the stock having a yield of 0.92%, as of August 26. The company maintains a 15-year streak of dividend growth.
Of the 895 elite funds tracked by Insider Monkey that filed 13Fs for Q2, 258 owned stakes in Microsoft Corporation on June 30, down from 259 in the previous quarter. The collective value of these stakes was over $56 billion. Fisher Asset Management owned a position worth over $7.3 billion in the company, becoming its largest stakeholder in Q2.
Carillon Tower Advisers mentioned Microsoft Corporation in its Q1 2022 investor letter. Here is what the firm had to say:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Microsoft (NASDAQ:MSFT) reported positive results driven by personal computing strength, but analysts were especially positive on its growth outlook for its Azure cloud-computing services.”
4. JPMorgan Chase & Co. (NYSE:JPM)
Millennium Management’s Stake Value: $298,641,000
In Q2 2022, Millennium Management’s stake in JPM grew by $128 million in value, as the fund boosted its position in the company by 113%. The fund’s total stake in the company amounted to nearly $300 million, which represented 0.18% of Israel Englander’s portfolio.
JPMorgan Chase & Co. currently pays a quarterly dividend of $1.00 per share, with the stock currently yielding 3.48%, as recorded on August 26. The company has been raising its dividends consistently for the past 11 years.
As of the end of June 2022, 104 hedge funds tracked by Insider Monkey reported owning stakes in JPMorgan Chase & Co., compared with 110 in the previous quarter. The collective value of these stakes was over $5.8 billion.
Carillon Tower Advisers mentioned JPMorgan Chase & Co. in its Q1 2022 investor letter. Here is what the firm had to say:
“More cyclical sectors, including technology and consumer discretionary, were among the weakest, likely due to rising interest rates and inflation. It was encouraging to see the quarter finish on a strong note with the S&P 500 only about 5% away from its all-time highs. Shares of JPMorgan Chase (NYSE:JPM) detracted from performance due to the company’s increased expense guidance, announced in January.”
3. Eli Lilly and Company (NYSE:LLY)
Millennium Management’s Stake Value: $300,592,000
Eli Lilly and Company (NYSE:LLY) is an Indiana-based pharmaceutical company that has operations in 18 countries. The company has consistently paid dividends to shareholders since 1885 and has been raising its payouts for the past 8 consecutive years. It currently pays a quarterly dividend of $0.98 per share, with shares boasting a dividend yield of 1.24%, as of August 26.
In Q2 2022, Millennium Management raised its position in Eli Lilly and Company by 132%, growing the value of its holding by over $186 million. The hedge fund owned 927,095 LLY shares at the end of the quarter, valued at over $300 million. The company represented 0.18% of Israel Englander’s portfolio.
In August, Citigroup lifted its price target on Eli Lilly and Company to $370 with a ‘Buy’ rating on the shares, calling the stock an attractive opportunity in the current economic landscape.
The number of hedge funds tracked by Insider Monkey owning stakes in Eli Lilly and Company jumped to 70 in Q2 2022, from 53 in the previous quarter. Those stakes held a collective value of over $6.7 billion. Fisher Asset Management was the company’s leading stakeholder in Q2, owning LLY shares worth nearly $2 billion.
Baron Funds mentioned Eli Lilly and Company in its Q2 2022 investor letter. Here is what the firm had to say:
“Eli Lilly and Company is a global pharmaceutical company focused on discovering, developing, and selling medicines for patients in the therapeutic areas of diabetes, oncology, immunology, and neuroscience. Stock performance was strong due to positive study results for Eli Lilly’s drug Tirzepatide (subsequently branded Mounjaro), which delivered up to 22.5% weight loss in adults with obesity. We think Tirzepatide is in the early innings of adoption in a large obesity market where penetration of anti-obesity medications is currently low. We continue to think Eli Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to solid revenue and earnings growth over many years.”
2. Apple Inc. (NASDAQ:AAPL)
Millennium Management’s Stake Value: $364,843,000
Millennium Management started investing in Apple Inc. (NASDAQ:AAPL) in 2010, purchasing shares worth over $41.3 million. In Q2 2022, the hedge fund owned over 2.6 million stakes in the tech company, worth $365 million. The company accounted for 0.22% of Israel Englander’s portfolio.
On July 28, Apple Inc. declared a quarterly dividend of $0.23 per share, in line with its previous dividend. The company has maintained a 9-year track record of consistent dividend growth. As of August 26, the stock’s dividend yield came in at 0.56%.
As of the close of Q2 2022, 128 hedge funds tracked by Insider Monkey owned stakes in Apple Inc., compared with 131 in the previous quarter. The combined value of those stakes was over $143 billion.
1. Oracle Corporation (NYSE:ORCL)
Millennium Management’s Stake Value: $365,201,000
Oracle Corporation (NYSE:ORCL) is a California-based computer software company that specializes in cloud applications and cloud platform services. In Q2 2022, Millennium Management owned over 5.2 million shares in the company, increasing its stake by 269%. The total ORCL stake of the fund amounted to over $365 million and represented 0.22% of Israel Englander’s portfolio.
On June 13, Oracle Corporation declared a 19% hike in its quarterly dividend to $0.32 per share. The company has been raising its dividend payments for the past 12 years and increased its payout by 13.32% in the last five years. As of August 26, the stock’s dividend yield stood at 1.71%.
In August, Guggenheim initiated its coverage of Oracle Corporation with a ‘Buy’ rating and a $107 price target, appreciating the company’s organic cloud revenue and database performance in the past.
At the end of Q2 2022, 69 hedge funds tracked by Insider Monkey owned stakes in Oracle Corporation, up from 61 in the previous quarter. Those stakes were collectively valued at over $4.1 billion.
Oakmark Funds mentioned Oracle Corporation in its Q2 2022 investor letter. Here is what the firm had to say:
“The sell-off in the enterprise software sector, combined with the complexity related to the acquisition of Cerner, provided an opportunity for us to re-establish a position in Oracle. Oracle is one of the world’s largest and most profitable software companies-generating more than $42 billion in revenue and 40% operating margins. We have always admired the stability of Oracle’s business and the strength of its customer relationships. Now, the company’s organic growth is beginning to accelerate. Specifically, total revenue grew 7% in fiscal year 2022 and 10% in the fourth fiscal quarter. In addition, management believes that Cerner’s growth and margins can be higher under Oracle’s ownership than it could on a standalone basis. Finally, we commend Oracle’s repurchase of roughly half its share base over the past decade, which has nearly doubled each remaining share’s interest in the business. Trading for only 12x calendar 2023 earnings ex-cash, we believe Oracle’s risk/reward is attractive.”
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Disclosure. None. 10 Best Dividend Stocks to Buy According to Israel Englander’s Millennium Management is originally published on Insider Monkey.
