In this article, we will be looking at the 5 best dividend stocks to buy in August according to hedge funds. To see our detailed analysis of dividend investing and these stocks, you can go directly to the 10 Best Dividend Stocks to Buy in August According to Hedge Funds.
5. OneMain Holdings, Inc. (NYSE: OMF)
Number of Hedge Fund Holders: 43
Dividend Yield: 3.1%
OneMain Holdings, Inc. (NYSE: OMF) is a financial service holding company and ranks 5th on our list of the best dividend stocks to buy in August according to hedge funds. The company operates in the consumer finance and insurance businesses in the US.
Arren Cyganovich, an analyst at Citigroup, recently raised his price target on shares of OneMain Holdings, Inc. (NYSE: OMF). This July, the analyst upped the target to $71, versus the previous $64 target, while reiterating a Buy rating on the shares in light of the company’s positive Q2 results.
In the second quarter of 2021, OneMain Holdings, Inc. (NYSE: OMF) had an EPS of $2.66, beating estimates by $0.46. The company’s revenue was $989 million, up 3.67% year over year and also beating estimates by $23.72 million. OneMain Holdings, Inc. (NYSE: OMF) has also gained 8.54% in the past 6 months and 24.06% year to date.
By the end of the first quarter of 2021, 43 hedge funds out of the 866 tracked by Insider Monkey held stakes in OneMain Holdings, Inc. (NYSE: OMF) worth roughly $886 million. This is compared to 30 hedge funds in the previous quarter with a total stake value of approximately $654 million.
Miller Value Partners, an investment management firm, mentioned OneMain Holdings, Inc. (NYSE: OMF) in its fourth-quarter 2020 investor letter. Here’s what they said:
“OneMain Holdings (OMF) was the top contributor over the quarter, advancing 56.0% after reporting Q3 Earnings Per Share (EPS) of $2.19, well above consensus of $1.26 and the quarterly dividend, which was increased 36% to $0.45/share (3.5% annualized yield and 11.5% Trailing Twelve Month (TTM) yield). Net interest income of $836M beat estimates of $778M, implying a 24.3% asset yield and 18.7% net interest margin. Origination volumes increased 41% sequentially to $2.9Bn on continued strength in digital while end-of-period net receivables were flat at $17.8Bn. Credit quality remains excellent with net charge-offs of 5.2%, the lowest level since 3Q 2015. Management guided to year-end receivables of $18.1Bn, net charge-offs of 5.6% (from 5.8%-6.0%), and net leverage of 4.3x-4.5x.”
4. The Bank of New York Mellon Corporation (NYSE: BK)
Number of Hedge Fund Holders: 49
Dividend Yield: 2.7%
The Bank of New York Mellon Corporation (NYSE: BK) is a US based financial services company that operates across the globe. It has three segments, namely the Investment Services, Investment and Wealth Management, and Other segments. The company ranks 4th on our list of the best dividend stocks to buy in August according to hedge funds.
Argus analyst Stephen Biggar this July not only upgraded shares of The Bank of New York Mellon Corporation (NYSE: BK) from Hold to Buy with a $55 price target, but also raised his EPS view for 2021 by $0.16. The analyst’s new EPS view for the company this year is now $4.15, while his 2022 EPS view is $4.68, also raised by about $0.11.
In the second quarter of 2021, The Bank of New York Mellon Corporation (NYSE: BK) had an EPS of $1.13, beating estimates by $0.13. The company’s revenue was $3.96 billion, also beating estimates by $98.43 million. The Bank of New York Mellon Corporation (NYSE: BK) has also gained 27.89% in the past 6 months and 28.04% year to date.
By the end of the first quarter of 2021, 49 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Bank of New York Mellon Corporation (NYSE: BK) worth roughly $4.77 billion. This is compared to 47 hedge funds in the previous quarter with a total stake value of approximately $4.69 billion.
3. Ally Financial Inc. (NYSE: ALLY)
Number of Hedge Fund Holders: 51
Dividend Yield: 2%
Ally Financial Inc. (NYSE: ALLY) is a bank holding company operating mainly in the US and Canada to serve consumer, commercial, and corporate customers and provide them with digital financial products and services. The company ranks 3rd on our list of the best dividend stocks to buy in August according to hedge funds.
Arren Cyganovich, an analyst at Citigroup, raised his price target on shares of Ally Financial Inc. (NYSE: ALLY) this July as well. The new price target stands at $63 versus the previous $59 target, with the analyst also reiterating a Buy rating on the stock.
In the second quarter of 2021, Ally Financial Inc. (NYSE: ALLY) had an EPS of $2.33, beating estimates by $0.83. The company’s revenue was $2.08 billion, up 29.58% year over year and also beating estimates by $213.29 million. Ally Financial Inc. (NYSE: ALLY) has also gained 25.46% in the past 6 months and 46.18% year to date.
By the end of the first quarter of 2021, 51 hedge funds out of the 866 tracked by Insider Monkey held stakes in Ally Financial Inc. (NYSE: ALLY) worth roughly $2.801 billion. This is compared to 57 hedge funds in the previous quarter with a total stake value of approximately $2.59 billion.
2. Morgan Stanley (NYSE: MS)
Number of Hedge Fund Holders: 79
Dividend Yield: 2.9%
Morgan Stanley (NYSE: MS) is an investment banking and brokerage company offerings a range of financial products and services to corporations, governments, institutions and individuals in the US, Europe, the Middle East, Africa, and Asia. The company ranks 2nd on our list of the best dividend stocks to buy in August according to hedge funds.
Morgan Stanley (NYSE: MS) shares witnessed a series of price target upgrades this July, with one from Oppenheimer’s Chris Kotowski being among the many. Kotowski raised his target on shares of Morgan Stanley (NYSE: MS) from $99 to $105, while also reiterating an Outperform rating on the stock and commenting after the company’s Q2 beat that it is “firing on all cylinders.”
In the second quarter of 2021, Morgan Stanley (NYSE: MS) had an EPS of $1.89, beating estimates by $0.23. The company’s revenue was $14.76 billion, up 10.03% year over year and also beating estimates by $763.58 million. Morgan Stanley (NYSE: MS) has also gained 35.53% in the past 6 months and 47.43% year to date.
By the end of the first quarter of 2021, 79 hedge funds out of the 866 tracked by Insider Monkey held stakes in Morgan Stanley (NYSE: MS) worth roughly $5.29 billion. This is compared to 66 hedge funds in the previous quarter with a total stake value of approximately $5.67 billion.
1. Citigroup Inc. (NYSE: C)
Number of Hedge Fund Holders: 90
Dividend Yield: 3%
Citigroup Inc. (NYSE: C) is a financial services company operating in the diversified banks industry in North America, Latin America, Asia, Europe, the Middle East, and Africa. The company ranks 1st on our list of the best dividend stocks to buy in August according to hedge funds and operates through its Global Consumer Banking and Institutional Clients Group segments.
Keefe Bruyette currently holds an Outperform rating and an $85 price target on shares of Citigroup Inc. (NYSE: C), as of this July.
In the second quarter of 2021, Citigroup Inc. (NYSE: C) had an EPS of $2.84, beating estimates by $0.95. The company’s revenue was $17.47 billion, also beating estimates by $273.99 million. Citigroup Inc. (NYSE: C) has also gained 2.42% in the past 6 months and 18.92% year to date.
By the end of the first quarter of 2021, 90 hedge funds out of the 866 tracked by Insider Monkey held stakes in Citigroup Inc. (NYSE: C) worth roughly $6.94 billion. This is compared to 95 hedge funds in the previous quarter with a total stake value of approximately $7.12 billion.
You can also take a look at 10 Best Dividend Paying Stocks to Buy Under $50 and 10 Best Dividend Stocks Under $20.
