In this article we discuss the 5 best dividend stocks according to billionaire Dan Loeb. If you want to read our detailed analysis of Loeb’s history and hedge fund performance, go directly to the 10 Best Safe Dividend Stocks According to Billionaire Dan Loeb.
5. TE Connectivity Ltd. (NYSE: TEL)
Loeb’s Stake Value: $187,658,000
Percent of Dan Loeb’s 13F Portfolio: 1.44%
Number of Hedge Fund Holders: 39
Dividend Yield: 1.48%
TE Connectivity Ltd. (NYSE: TEL) designs and manufactures connectivity and sensor products for harsh environments in various industries, including automotive.
TE Connectivity recently beat Q2 Non-GAAP EPS by $0.09. Revenue of $3.7 billion was up 16% year over year.
TE Connectivity Ltd. (NYSE: TEL) wholly-owned subsidiary Tyco Electronic Group priced an offering of 550M Euros at 99.101%. Net proceeds are expected to be used for general corporate purposes.
Hedge fund Harris Associates owns 13.16 million shares of TE Connectivity.
4. Stanley Black & Decker, Inc. (NYSE: SWK)
Loeb’s Stake Value: $146,034,000
Percent of Dan Loeb’s 13F Portfolio: 1.12%
Number of Hedge Fund Holders: 38
Dividend Yield: 1.35
Stanley Black & Decker, Inc. (NYSE: SWK) recently posted a strong revenue for Q1. This is largely attributed to tools and storage, with all segments contributing to 31% organic growth. 2021 GAAP EPS guidance was raised to $10.15 – $10.55 from $9.15 – $9.85; EPS guidance was raised to $10.70 – $11.00 from $9.70 – $10.30. Board of Directors authorized share repurchase to a tune of 20 million shares. In February the company declared a dividend of $0.70 per share.
Bank of America upgraded the stock to “Buy” rating from “Neutral” and also upped the price target to $205 from $185.
3. Intel Corporation (NASDAQ: INTC)
Loeb’s Stake Value: $49,820,000
Percent of Dan Loeb’s 13F Portfolio: 0.38%
Number of Hedge Fund Holders: 72
Dividend Yield: 2.40%
Intel Corp. is one of the best chip stocks to buy. The company also offers a decent dividend yield. The company recently reported $19.7 billion GAAP revenue in Q1 2021, down 1% YoY. Non-GAAP revenue stood at $18.6 billion, above the expectation by $1.1 billion.
Bank of America has rated the stock as “Underperform” with a price target of $62. However, the bank lauded Intel’s wide product breadth and its role in domestic manufacturing. Some of the issues raised by Bank of America include the zero growth in sales and falling gross margin trajectory.
Alger Spectra Fund, in its Q1 2021 investor letter, mentioned Intel Corporation (NASDAQ: INTC). Here is what Alger Spectra Fund has to say about Intel Corporation in its letter:
“Short exposure to Intel also detracted from performance. Intel designs and manufactures semiconductors for the computing and communications industries. Intel’s proprietary intellectual strength and manufacturing prowess versus the competition is deteriorating, which is causing the company to lose market share and profit opportunities. The short position detracted from portfolio returns as the share price reacted positively to the announcement of Pat Gelsinger being hired as chief executive officer, a stronger-than-anticipated quarterly earnings report driven by unusually robust PC sales that we believe are unsustainable and the unveiling of “Intel Unleashed,” a new long-term program to help improve manufacturing and spur innovation. This program involves opening two fabrication plants in Arizona, which confirms Intel’s commitment to continue as an integrated design manufacturer. Importantly, Intel continues to experience issues with its next generation server chips which are disadvantaging Intel versus the competition.”
2. The Estée Lauder Companies Inc. (NYSE: EL)
Loeb’s Stake Value: $53,238,000
Percent of Dan Loeb’s 13F Portfolio: 0.41%
Number of Hedge Fund Holders: 51
Dividend Yield: 0.71%
The Estée Lauder Companies Inc. (NYSE: EL) manufactures and markets prestige skincare, fragrance, makeup and hair care products. In April, Wells Fargo upgraded the stock to “Overweight” with a price target of $340. Last week the company declared a quarterly dividend of $0.53 per share. For Q3 2020 Estée reported net sales of $3.86 billion, a $3.35 billion increase compared to Q3 2019. Net earnings for the period was $456 million. The Estée Lauder Companies Inc. (NYSE: EL) diluted net EPS is expected to be $5.31 to $5.48 in FY 2021.
Nicolai Tangen’s hedge fund Ako Capital is also bullish on this stock and owns 1.42 million shares of the company.
Cooper Investors, in its Q4 2020 investor letter, said that they took profits and sold their position in The Estée Lauder Companies Inc. (NYSE: EL) because they think that the price appreciation of the company is only for the short term. Here is what Cooper Investors has to say about The Estée Lauder Companies Inc. in its investor letter:
“Estee Lauder was sold because the business is experiencing a very significant share price appreciation in a short period. We bought this great company earlier in 2020, however Value Latencies appear exhausted – to highlight this point Estee Lauder now trades on 45x Free Cash Flow.”
1. Equitrans Midstream Corporation (NYSE: ETRN)
Loeb’s Stake Value: $104,520,000
Percent of Dan Loeb’s 13F Portfolio: 0.8%
Number of Hedge Fund Holders: 25
Dividend Yield: 7.48%
Equitrans Midstream Corporation (NYSE: ETRN) gatheres natural gases and provides them to the midstream. It operates in three business faculties: water, transmission, and gathering.
Equitrans Midstream Corporation (NYSE: ETRN) recently missed its Q1 EPS estimates. Barclays downgraded the stock to “Underweight” from “Equal weight” and slashed its price target to $7 from $9.
You can also take a peek at 10 Best Dividend Stocks Under $20 and Top 10 Dividend Stocks That Pay Monthly.
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