In this article, we discuss the 5 best dividend stocks to buy according to Traci Lerner’s Chescapmanager. If you want to read our detailed analysis of Lerner’s history and hedge fund performance, go directly to the 10 Best Dividend Stocks to Buy According to Traci Lerner’s Chescapmanager.
5. The TJX Companies, Inc. (NYSE: TJX)
Lerner’s Stake Value: $9,261,000
Percentage of Traci Lerner’s 13F Portfolio: 0.98%
Dividend Yield: 1.52%
Number of Hedge Fund Holders: 63
The TJX Companies, Inc. (NYSE: TJX), collectively with its subsidiaries runs as an off-price clothing and home fashions dealer. The company was founded in 1956 and stands fifth on the list of 10 best dividend stocks to buy according to Traci Lerner’s Chescapmanager. TJX shares have gained 31.88% over the last 12 months.
On May 27, The TJX Companies, Inc. (NYSE: TJX) declared a quarterly dividend of $0.26, in line with the previous. On May 19, the company posted earnings per share for the first quarter of 2021. The company declared earnings of $0.44, beating the market predictions by $0.13. The revenue for the first quarter of 2021 was $10.09 billion, up 128.8% YoY, beating the estimates by $1.48 billion.
The stock accounts for about 0.98% of Chescapmanager LLC portfolio, as the hedge fund owns a $9.26 million stake in the company. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Alkeon Capital Management is the biggest stakeholder of the company with 6.11 million shares, worth $404.36 million.
Giverny Capital, in its first quarter 2021 investor letter, mentioned The TJX Companies, Inc. (NYSE: TJX). Here is what the fund has to say about The TJX Companies in its letter:
“We’re pretty happy with the current portfolio and so were not very active during the quarter. Our only consequential decision in the first quarter was to exit the off-price retailer The TJX Companies in January. My prior firm owned TJX for most of the past 20 years and enjoyed appreciation on the order of 20 times the original purchase price.
TJX is a great company, but the growth rate has slowed in recent years and the operating margin has been under pressure, mainly from rising wages for store workers. When the pandemic hit, I bought the stock for GCAM in the belief that if the US fell into a prolonged recession, TJX would be a winner because of its extreme value position.
The US didn’t fall into a prolonged recession. Rather, many consumers are flush with cash thanks to government relief programs. But brick-and-mortar stores are losing out to online competitors for reasons of safety and convenience. TJX has fared much better than most of its competitors during this time and should continue to do so, thanks to its model of buying inventory close to need and reacting to what is happening in the marketplace rather than trying to create hot product. But the stock rose about 50% in the few months we owned it and that increase seemed to price in a complete recovery and more. We sold in early January.”
4. Cigna Corporation (NYSE: CI)
Lerner’s Stake Value: $26,493,000
Percentage of Traci Lerner’s 13F Portfolio: 2.82%
Dividend Yield: 1.68%
Number of Hedge Fund Holders: 53
Cigna Corporation (NYSE: CI) is an American healthcare and insurance company. It was founded in 1792 and is ranked fourth on the list of 10 best dividend stocks to buy according to Traci Lerner’s Chescapmanager. Cigna currently has a $81.68 billion market capitalization and was able to deliver a 24.96% return in the past 12 months.
On May 7, Cigna posted earnings for the first quarter of 2021. Its earnings per share was $4.73, beating market predictions by $0.35. The company also declared its revenue of $41 billion, up 6.8% YoY, beating the estimates by $730 million. Cigna’s adjusted revenues expectations for 2021 is forecasted to be no less than $166 billion.
Chescapmanager LLC holds 109,593 shares in the company worth over $26.49 million, representing 2.82% of their portfolio. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Glenview Capital is a leading shareholder in Cigna with 1.86 million shares worth more than $449 million.
In its fourth quarter 2020 investor letter, Artisan Partners Limited Partnership, a high value-added investment management firm, highlighted a few stocks, and Cigna Corporation (NYSE: CI) was one of them. Here is what the fund said:
“New purchases include Cigna. Cigna is a leading managed care company which operates through the following major segments: health services, integrated medical, international markets and group disability. It’s one of the few managed care organizations in the United States with the scale and size to compete effectively. Cigna has recently focused on deleveraging its balance sheet and further diversifying its business, after completing the Express Scripts acquisition in late 2018. Additionally, the company has partnered with Amazon, which will offer two new pharmacy options—including a self-pay offering. Cigna will administer the self-pay option through its health services division Evernorth. The partnership should be one of many strong earnings drivers for Cigna, which we believe is currently trading at an attractive valuation.”
3. McDonald’s Corporation (NYSE: MCD)
Lerner’s Stake Value: $2,241,000
Percentage of Traci Lerner’s 13F Portfolio: 0.23%
Dividend Yield: 2.21%
Number of Hedge Fund Holders: 67
McDonald’s Corporation (NYSE: MCD) runs and licenses McDonald’s restaurants all over the world. The company was founded in 1940, and it stands third on the list of 10 best dividend stocks to buy according to Traci Lerner’s Chescapmanager. McDonald’s shares have gained 27.30% over the last 12 months.
On June 23, Wells Fargo initiated an “Outperform” rating on McDonald’s and increased its price target on the restaurant stock to $268 from $262. On June 25, Ivan Feinseth an analyst at Tigress Financial reiterated the stock as “Buy,” and has set the price target at $271.
Chescapmanager LLC added this stock to its portfolio in the latest quarter by buying 10,000 shares. In addition, hedge funds are loading up on McDonald’s Corporation (NYSE: MCD), as Insider Monkey’s data shows that 67 hedge funds held stakes in the company in the first quarter of 2021, compared to 62 funds a quarter earlier.
2. Bristol-Myers Squibb Company (NYSE: BMY)
Lerner’s Stake Value: $19,624,000
Percentage of Traci Lerner’s 13F Portfolio: 2.09%
Dividend Yield: 2.94%
Number of Hedge Fund Holders: 81
Bristol-Myers Squibb Company (NYSE: BMY) is a Fortune 500 company that makes treatments several diseases, including cancer, HIV/AIDS, cardiovascular disease, diabetes, hepatitis, rheumatoid arthritis and psychiatric disorders. The company was incorporated in 1887 and is ranked second on the list of 10 best dividend stocks to buy according to Traci Lerner’s Chescapmanager. Bristol-Myers currently has a $149.56 billion market capitalization. It delivered a 13.21% return in the past 12 months.
On June 29, Bristol Myers Squibb (NYSE: BMY) proclaimed that the European Commission approved Opdivo and Yervoy for the treatment of adult patients with metastatic colorectal cancer after first fluoropyrimidine-based mixed chemotherapy.
The hedge fund managed by Lerner owns 310,852 shares in the biopharmaceutical company worth $19.62 million, representing 2.09% of their portfolio. Legendary investor and billionaire Warren Buffett’s Berkshire Hathaway is the biggest stakeholder in Bristol-Myers Squibb Company (NYSE: BMY) out of the 886 hedge funds tracked by Insider Monkey, as in the first quarter of 2021. The Oracle of Omaha owns 31.03 million shares of the company, worth $1.96 billion.
Wedgewood Partners, in its fourth quarter of 2020 investor letter, mentioned Bristol-Myers Squibb Company. Here is what the fund has to say about Bristol-Myers Squibb Company in its letter:
“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. Restaurant Brands International Inc. (NYSE: QSR)
Lerner’s Stake Value: $4,657,000
Percentage of Traci Lerner’s 13F Portfolio: 0.49%
Dividend Yield: 3.27%
Number of Hedge Fund Holders: 26
Restaurant Brands International Inc. (NYSE: QSR) owns and licenses rapid service eateries under the brand names Tim Hortons (TH), Burger King (BK), and Popeyes (PLK). It was founded in 1954 and ranks first on the list of 10 best dividend stocks to buy according to Traci Lerner’s Chescapmanager. Restaurant Brands’ shares have gained about 19.13% over the last 12 months.
On June 16, Restaurant Brands International (NYSE: QSR) issued 3.875% senior secured notes due January 15, 2028, whose principal amount is $800 million. The net proceeds will be used to retrieve all issuers’ pending $775 million of 4.250% First Lien Senior Secured Notes due 2024. On April 30, the company declared a quarterly dividend of $0.53 per share, in line with the previous. The company also announced its earnings per share for the first quarter of 2021. The earnings per share was $0.55, beating the market predictions by $0.05.
The hedge fund run by Lerner owns 71,650 shares in Restaurant Brands International (NYSE: QSR) worth $4.66 million, representing 0.49% of their investment portfolio. New York-based investment firm Pershing Square is a leading shareholder in the company with 23.93 million shares worth $1.56 billion.
In its fourth quarter 2020 investor letter, Pershing Square Holdings Ltd, an investment management firm, highlighted a few stocks, and Restaurant Brands was one of them. Here is what the fund said:
“QSR’s franchised business model is a high-quality, capital-light, growing annuity that generates high-margin brand royalty fees from three leading brands: Burger King, Tim Hortons and Popeyes. The company nimbly navigated difficult market conditions in 2020 by assisting franchisees, while maintaining its long-term growth potential.
As the COVID-19 pandemic began, management undertook a series of steps to secure and strengthen the business. The company quickly bolstered safety procedures and shifted marketing spend to highlight the off -premise options available to customers, while supporting its franchisees with fee/cap ex deferrals and liquidity programs. Throughout the year, the company accelerated its digital investments by expanding its delivery footprint, modernizing its drive-thru experience, increasing mobile ordering adoption, and improving its loyalty programs.” (Click here to see the full text)
You can also take a peek at 10 Best High Yield Dividend Stocks to Buy in June and 10 Best Dividend Stocks to Buy According to Billionaire Ray Dalio.
