5 Dividend Paying Stocks You Should Avoid According to Morgan Stanley’s Quant Screen

4. Penske Automotive Group, Inc. (NYSE:PAG)

Dividend Yield as of September 27: 1.95%

Total Expected Return: -22%

Number of Hedge Fund Holders: 22

Penske Automotive Group, Inc. (NYSE:PAG) is a leading automotive retailer in the United States. The company has four business divisions: Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive Investments. As of September 27, the stock is offering a forward dividend yield of 1.95% and has free cash flows of $959 million.

On July 14, Morgan Stanley analyst Adam Jonas cut his price target on Penske Automotive Group, Inc. (NYSE:PAG) to $93 from $95 and reiterated an Underweight rating on the shares. As of September 27, Penske Automotive Group, Inc. (NYSE:PAG) has lost 4.55% year to date, and Morgan Stanley analysts expect the stock to decline by an additional 22% moving into 2023.

At the close of Q2 2022. 22 hedge funds were long Penske Automotive Group, Inc. (NYSE:PAG) and held stakes worth $235.6 million in the company. As of June 30, AQR Capital Management is the top shareholder in the company and owns roughly 0.6 million shares.