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

3. Group 1 Automotive, Inc. (NYSE:GPI)

Dividend Yield as of September 27: 1.03%

Total Expected Return: -23%

Number of Hedge Fund Holders: 24

Group 1 Automotive, Inc. (NYSE:GPI) sells new and used cars, light trucks, and vehicle parts, in the United States and the United Kingdom. On September 9, BofA analyst John Murphy slashed his price target on Group 1 Automotive, Inc. (NYSE:GPI) to $358 from $375 but maintained a Buy rating on the shares. This July, Morgan Stanley analyst Adam Jonas cut his price target on Group 1 Automotive Inc. (NYSE:GPI) to $142 from $160 and reiterated a sell-side Underweight rating on the shares.

As of September 27, Group 1 Automotive, Inc. (NYSE:GPI) has tumbled 21.40% year to date and is offering a forward dividend yield of 1.03%. Morgan Stanley sees the stock losing an additional 23% over the next couple of months. Group 1 Automotive, Inc. (NYSE:GPI) has free cash flows of $724.9 million as of September 27.

Insider Monkey spotted Group 1 Automotive, Inc. (NYSE:GPI) on 24 investment portfolios at the close of Q2 2022. The total stakes of these hedge funds amounted to $195 million. As of June 30, Lakewood Capital Management is the leading shareholder in the company with stakes worth $55 million.