In this article, we discuss 5 best dividend stocks to buy according to Kenneth A. Moffet’s Hourglass Capital. If you want to read our detailed analysis of the hedge fund’s past performance and its investment strategy, go directly to read 10 Best Dividend Stocks to Buy According to Kenneth A. Moffet’s Hourglass Capital.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 76
Dividend Yield as of June 2: 3.86%
Hourglass Capital’s Stake Value: $14,326,000
An American biopharmaceutical company, AbbVie Inc. (NYSE:ABBV) was the largest holding of Hourglass Capital in the first quarter of 2022. The hedge fund owned 88,371 ABBV shares, after increasing its position in the company by 2% during the quarter. The shares are valued at over $14.3 million, representing 4.47% of Kennet A. Moffet’s portfolio.
In February, AbbVie Inc. (NYSE:ABBV) declared a quarterly dividend of $1.41 per share. The company raised its dividend in October 2021 by 9%. The company has raised its dividend for consecutive 50 years, including its years as Abbott’s subsidiary before 2013. Moreover, since 2013, AbbVie Inc. (NYSE:ABBV) has increased its dividend by 250%. The stock’s dividend yield came to be recorded at 3.86%.
In its May investors’ note, Wells Fargo mentioned that from 2023 to 2028, the firm sees the sales of AbbVie Inc. (NYSE:ABBV) growing at a CAGR of 5%-11%, versus a consensus of 2%-4%. In view of this, the firm lifted its price target on the stock to $200 while maintaining an Overweight rating on the shares.
At the end of Q1 2022, 76 hedge funds tracked by Insider Monkey reported owning a $3.66 billion worth of collective stake in AbbVie Inc. (NYSE:ABBV). In comparison, 82 hedge funds held positions in the company in the previous quarter, with stakes valued at over $3.74 billion. Arrowstreet Capital was the largest shareholder of the company, holding stakes worth over $754 million.
Miller Howard Investments mentioned AbbVie Inc. (NYSE:ABBV) in its Q3 2021 investor letter. Here is what the firm has to say:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”
4. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 51
Dividend Yield as of June 2: 4.07%
Hourglass Capital’s Stake Value: $4,682,000
3M Company (NYSE:MMM), an American multinational manufacturing company, delivered a solid start to 2022, posting an EPS of $2.65 in the first quarter, which surpassed analysts’ expectations by $0.34. The company generated revenue of $8.83 billion, beating estimates by $81.35 million. Following the company’s first-quarter results, in April, Credit Suisse set a $161 price target on 3M Company (NYSE:MMM), but kept a Neutral rating on the shares, noting the supply chain issues faced by the company.
As per Insider Monkey’s Q1 2022 data, 51 hedge funds were bullish on 3M Company (NYSE:MMM), showing growth from 41 funds in the previous quarter. The consolidated value of these stakes stood at over $1.53 billion. Among these hedge funds, Fisher Asset Management was the leading stakeholder of the Minnesota-based company in Q1 2022, with stakes worth over $898 million.
In Q1 2022, Hourglass Capital increased its position in 3M Company (NYSE:MMM) by 44%, owning 31,450 MMM shares, worth roughly $4.7 million. The company represented 1.46% of Kenneth A. Moffet’s portfolio.
In May this year, 3M Company (NYSE:MMM) declared a quarterly dividend of $1.49 per share, consistent with the previous dividend. The company maintains a 63-year track record of consistent dividend growth, with a five-year CAGR of 5.38%. As of June 2, the stock’s dividend yield stood at 4.07%.
3. The Williams Companies, Inc. (NYSE:WMB)
Number of Hedge Fund Holders: 38
Dividend Yield as of June 2: 4.54%
Hourglass Capital’s Stake Value: $6,161,000
The Williams Companies, Inc. (NYSE:WMB) is an American energy company with core businesses in natural gas processing and transportation. At the end of Q1 2022, Hourglass Capital owned 184,396 shares in the company, worth over $6.1 million. The company accounted for 1.92% of Kenneth A. Moffet’s portfolio.
The number of hedge funds tracked by Insider Monkey owning stakes in The Williams Companies, Inc. (NYSE:WMB) stood at 38 in Q1 2022, the same as in the previous quarter. These stakes are valued at $410.6 million. Arrowstreet Capital was the largest shareholder of the Oklahoma-based company, owning stakes worth over $76.3 million.
This April, Morgan Stanley lifted its price target on The Williams Companies, Inc. (NYSE:WMB) to $40, with an Equal Weight rating on the shares, presenting a bullish view of the midstream sector. The Williams Companies, Inc. (NYSE:WMB) pays a quarterly dividend of $0.425 per share, growing it by 4% in February. The stock’s dividend yield stood at 4.54%, as of the close of June 2.
ClearBridge Investments mentioned The Williams Companies, Inc. (NYSE:WMB) in its Q4 2021 investor letter. Here is what the firm has to say:
“On a regional level, the Strategy’s largest exposure is in the U.S. and Canada (58%) consisting of regulated and contracted utilities (31%) and economically sensitive user-pays infrastructure (27%). During the quarter we initiated new positions in U.S. energy infrastructure company Williams Companies. With supply chain issues, higher housing costs, higher commodity prices and producer price inflation remaining square in the sights for 2022, we think higher inflation is a risk for global markets. We expect growth to slow to trend or below by mid-2022 and U.S. Treasury yields to rise, which will mean a continuation of negative real bond yields. Additional forecast volatility and therefore market uncertainty will arise as new COVID-19 variants appear and circulate. However, with high levels of vaccination across the developed world and less propensity for mobility restrictions and lockdowns, we expect the economic implications to be limited.
2. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 43
Dividend Yield as of June 2: 4.73%
Hourglass Capital’s Stake Value: $5,751,000
International Business Machines Corporation (NYSE:IBM) is an American multinational tech company, having operations in over 171 countries. In May, the company signed an agreement with Amazon Web Services (AWS), offering its software catalog on AWS. This partnership will allow clients to have quick and easy access to IBM software.
In April 2022, International Business Machines Corporation (NYSE:IBM) declared a 0.6% growth in its quarterly dividend, which marked the company’s 27th consecutive year of dividend growth. Moreover, the company has paid consecutive quarterly dividends since 1916. As of June 2, the stock’s dividend yield came in at 4.73%.
As International Business Machines Corporation (NYSE:IBM) reported a 13% year-over-year growth in its Consulting revenue in Q1 2022, BMO Capital, in April, raised its price target on the stock to $152, with a Market Perform rating on the shares.
At the end of Q1 2022, Hourglass Capital held shares worth over $5.7 million in International Business Machines Corporation (NYSE:IBM), accounting for 1.79% of Kenneth A. Moffet’s portfolio. The hedge fund first invested in the company during the first quarter of 2016 with 30,150 shares, worth $4.36 million.
According to Insider Monkey’s Q1 2022 data, 43 hedge funds held stakes in International Business Machines Corporation (NYSE:IBM), valued at over $1.16 billion. In comparison, 44 hedge funds held positions in the company in the previous quarter, with stakes valued at roughly $1.3 billion.
St. James Investment Company mentioned International Business Machines Corporation (NYSE:IBM) in its Q4 2021 investor letter. Here is what the firm has to say:
“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)
1. Kinder Morgan, Inc. (NYSE:KMI)
Number of Hedge Fund Holders: 40
Dividend Yield as of June 2: 5.59%
Hourglass Capital’s Stake Value: $5,549,000
Kinder Morgan, Inc. (NYSE:KMI) is an American energy infrastructure company that specializes in controlling oil and gas pipeline terminals. In Q1 2022, the company reported a 2% growth in natural gas transport volumes, compared to the first quarter of 2021. Moreover, Kinder Morgan, Inc. (NYSE:KMI) also reported a 12% year-over-year growth in its natural gas gathering volumes.
In May, Truist initiated its coverage on Kinder Morgan, Inc. (NYSE:KMI), with a Buy rating and a $22 price target. On April 20, the company announced a 3% hike in its quarterly dividend to $0.2775 per share. This was the company’s 5th consecutive year of dividend growth. As of June 2, the stock’s dividend yield came in at 5.59%.
At the end of Q1 2022, Hourglass Capital held stakes worth roughly $5.6 million in Kinder Morgan, Inc. (NYSE:KMI), which represented 1.73% of Kenneth A. Moffet’s portfolio. The hedge fund increased its position in the company by 34% during the quarter.
As per Insider Monkey’s Q1 2022 database, 40 hedge funds held stakes in Kinder Morgan, Inc. (NYSE:KMI), up from 39 in the previous quarter. The consolidated value of these stakes is over $1.34 billion. FPR Partners held the largest stake in the Texas-based company in Q1 2022, with shares worth over $307.3 million.
You can also take a look at 10 Value Stocks Hedge Funds Like in 2022 and Oil Price Predictions for 2022 and 10 Stocks to Watch
