This article presents an overview of the 5 Best Low-Priced Dividend Stocks To Invest In. For a detailed overview of such stocks, read our article, 13 Best Low-Priced Dividend Stocks To Invest In.
5. Petroleo Brasileiro ADR Reptg 2 Ord Shs (NYSE:PBR)
Number of Hedge Fund Investors: 36
Brazilian energy company Petroleo Brasileiro ADR Reptg 2 Ord Shs (NYSE:PBR) has a dividend yield of a whopping 19% as of December 16.
Petroleo Brasileiro ADR Reptg 2 Ord Shs (NYSE:PBR) recently said it plans to spend $102 billion before the end of 2028. About 72% of this spending will be allocated to oil and gas exploration.
In August Petroleo Brasileiro ADR Reptg 2 Ord Shs (NYSE:PBR) talked about its new policies regarding dividends:
Another important fact was we reviewed the shareholders’ remuneration policy.
In this policy review – we will maintain important aspects that will guarantee the financial soundness of the company, the control of that. We maintained the same periods, we continue with the same guides of indebtedness. We have a reference, we have our gross debt and how we pay out quarterly our dividends. And we’ve reformulated our formula going from 60% to 45% of free cash flow designated to dividend pay-out. This level is in line with the major worldwide enterprises. I am here considering independent enterprises and also state companies. Remuneration to shareholders, I would like to highlight the main dates that were already announced to the market here for the second quarter remuneration. The base data will be August 21. The first tranche will be paid of – the person will be paid November 21 and the second December 15.
We continue controlling our debt using capital principle that is part of the guidance of the company. And we continue committed to generate and to distribute value. Now our buyback program. Well, Petrobras is one of the companies that communicates most with the market in Brazil and abroad. These are the shares that are mostly traded abroad.
Read the entire earnings call transcript here.
Fairlight Capital made the following comment about Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) in its Q3 2023 investor letter:
“Throughout the year, we have reviewed thousands of companies, including many in the oil sector. While we are generally cautious about commodity-based businesses where the company lacks control over the price of what it produces, the valuations in several cases have reached extremely compelling levels. For example, Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) and Ecopetrol (EC). Petrobras has distributed dividends of over $2.30 paid this year3 , while Ecopetrol has traded as cheaply as the $9-$10 range (close to our purchase price) and is paying approximately $2.50 in dividends this year.
We factor in the potential cost of FX movements over time, but even under the most pessimistic scenarios the investments should work out well. We initially came across these ideas while looking at South American stocks in general. We saw that many market commentators had expressed concerns that Ecopetrol’s dividends might be halted, especially following the election of Gustavo Petro as president of Colombia in June 2022. Similarly, there have been reservations about the sustainability of Petrobras’s dividend. However, the government owns substantial controlling stakes in these companies and is also a recipient of their dividends. For Ecopetrol, the Colombian government owes money to Ecopetrol due to the Fuel Price Stabilization Fund (FEPC). This fund aims to stabilize fuel prices for Colombian consumers. It bridges the gap between international and national Colombian consumer prices by compensating producers and importers for this price difference. The primary goal is to cushion the impact of global oil price fluctuations on the Colombian market. This is achieved either through cash payment or by forgoing dividend payments due from the government’s stake in these companies. In Ecopetrol’s case, the dividends paid (or those that would be paid to the government) are applied against the outstanding balances…” (Click here to read the full text)
4. KeyCorp (NYSE:KEY)
Number of Hedge Fund Investors: 42
Financial services company KeyCorp (NYSE:KEY) was among the list of stocks recommended by Citi earlier this month for the next 12 months.
Citi Research’s Focus List North America report said these are “actionable stocks by excluding those with low liquidity; preference for stocks that did not score poorly on Citi’s multi-factor quant model; and bold stock calls that were significantly different from the Street in expected total returns, earnings forecasts, or analysis.”
3. Ford Motor Co (NYSE:F)
Number of Hedge Fund Investors: 43
Car giant Ford Motor Co (NYSE:F) is one of the best low-priced dividend stocks to buy according to hedge funds.
Recently, Ford’s Chief EV, Digital & Design Officer Douglas Field bought 182K shares of Ford Motor Co (NYSE:F) at $11.04 per share.
2. Viatris Inc (NASDAQ:VTRS)
Number of Hedge Fund Investors: 43
Healthcare company Viatris Inc (NASDAQ:VTRS) ranks 2nd in our list of the best low-priced dividend stocks to buy according to hedge funds.
As of the end of the third quarter of 2023, 43 hedge funds had stakes in Viatris Inc (NASDAQ:VTRS). The most significant stakeholder of Viatris Inc (NASDAQ:VTRS) was James E. Flynn’s Deerfield Management which owns a $196 million stake in Viatris Inc (NASDAQ:VTRS).
Here is what Davis New York Venture Fund has to say about Viatris Inc. (NASDAQ:VTRS) in its Q3 2023 investor letter:
“In the attractive healthcare sector, we look beyond the obvious to identify businesses that simultaneously have exposure to this growth industry and also trade at low prices. We’re especially drawn to companies like Viatris, whose products or services play a part in helping to mitigate healthcare’s constantly rising costs. The healthcare industry has been a growing part of the U.S. economy for decades. As a result, many companies in this sector trade at high valuations reflecting their robust but well-known reputation for growth. For value-conscious investors like us, investing in healthcare requires looking beyond the obvious to identify businesses that have exposure to this growth industry but which trade at low prices. Furthermore, recognizing that the constantly rising cost of healthcare cannot go on forever, we have been particularly drawn to companies whose products or services play some role in managing or reducing the cost of care. As a result, we have positions in Viatris, a leading manufacturer of low-cost branded generic drugs.”
1. First Horizon Corp (NYSE:FHN)
Number of Hedge Fund Investors: 48
First Horizon Corp (NYSE:FHN) is a popular stock among hedge funds. A total of 48 hedge funds tracked by Insider Monkey had stakes in First Horizon Corp (NYSE:FHN). The biggest stake in First Horizon Corp (NYSE:FHN) was owned by D. E. Shaw’s D E Shaw which owns an $108 million stake in First Horizon Corp (NYSE:FHN).
ClearBridge Small Cap Value Strategy made the following comment about First Horizon Corporation (NYSE:FHN) in its Q2 2023 investor letter:
“The financials sector was also a positive contributor to relative outperformance during the quarter as fears of further contagion of March’s bank crisis eased and allowed for a rebound in many of the higher-quality small and regional banks caught up in the panic. For example, as investor pessimism dissipated, Bank OZK exceeded analyst expectations and raised its quarterly dividend, highlighting continued improvement in its net interest income margin in the first quarter. We capitalized on the retreat in bank stocks early in the quarter to initiate a new position in regional bank First Horizon Corporation (NYSE:FHN), which reflected a unique opportunity to buy a bank with an extremely strong capital and liquidity profile at a distressed value after its deal to be acquired by Toronto Dominion was canceled through no fault of First Horizon. While we continue to be vigilant for signs of further deterioration in the sector, we have high conviction in our holdings and believe that they will continue to be positive contributors to our long-term performance.”
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