5. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 51
Dividend Yield as of May 20: 2.07%
As of March 31, GAMCO Investors has stakes worth $69.2 million in Honeywell International Inc. (NASDAQ:HON). The investment covers 0.62% of Mario Gabelli’s 13F portfolio and makes the stock one of his top dividend picks. As of May 20, Honeywell International Inc. (NASDAQ:HON) boasts a forward yield of 2.07% and has been growing its dividends for over 18 years, registering a 5-year dividend CAGR of 7.03%.
By the end of the fourth quarter of 2021, 51 hedge funds were long Honeywell International Inc. (NASDAQ:HON) with stakes worth $1.89 billion. This is compared to 45 hedge funds in the prior quarter with stakes of $927.73 million. The hedge fund sentiment for the stock is positive.
Distillate Capital, an investment management firm, mentioned a few companies in its third-quarter 2021 investor letter and Honeywell International Inc. (NASDAQ:HON) was one of them. Here is what experts at Distillate Capital think:
“The largest exited positions were Oracle, which outperformed significantly, and Texas Instruments and Honeywell, which were roughly flat versus the market in the quarter but were edged out for inclusion by other stocks that became even more attractively valued.”
4. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 80
Dividend Yield as of May 20: 2.57%
Comcast Corporation (NASDAQ:CMCSA) is a leading provider of cable communications services in the United States and internationally. At the end of Q4 2021, 80 hedge funds were long Comcast Corporation (NASDAQ:CMCSA) with stakes of $8.63 billion. This is compared to 75 hedge funds in Q3 2021 with stakes of $8.54 billion. GAMCO Investors has a sizeable stake in Comcast Corporation (NASDAQ:CMCSA) as of Q1 2022, owning over 1.08 million shares of the company which amounts to a stake of $50.66 million. The investment covers 0.45% of Mario Gabelli’s 13F portfolio.
Here is what ClearBridge Investments had to say about Comcast Corporation (NASDAQ:CMCSA) in its “All Cap Growth Strategy” fourth quarter 2021 investor letter:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Comcast was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
3. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 84
Dividend Yield as of May 20: 2.48%
GAMCO Investors has maintained a position in Bank of America Corporation (NYSE:BAC) for roughly over a decade, since Q3 2012. As of March 31, Mario Gabelli’s hedge fund owns over 1.18 million shares of Bank of America Corporation (NYSE:BAC) which amounts to a stake of $48.96 million.
Gamco Investors is not the only hedge fund bullish on Bank of America Corporation (NYSE:BAC). Insider Monkey found 84 hedge funds bullish on the company at the end of Q4 2021. The total stakes of these funds amounted to $47.87 billion, up from $46.48 billion in the prior quarter with 72 positions. The hedge fund sentiment for the stock is positive.
Miller Value Partners mentioned Bank of America Corporation (NYSE:BAC) in its “Opportunity Equity” first quarter 2022 investor letter. Here is what they said:
“There are many times when volatility and beta give false signals. Banks outperformed in the post-tech bubble bear market of the early 2000s. At the market peak prior to the financial crisis (when risk was the highest in those names!), Bank of America (NYSE:BAC) had a 0.9x beta (based on the trailing 5 years) suggesting its “risk” was below the market’s. Wrong! It massively underperformed in the financial crisis. Realized beta over the 5 years from the pre-crisis’ 2006 peak measured 2.3x.
A much better indicator of actual risk, both before and after the financial crisis, was the quality of the balance sheet and risk-taking appetite. Beta is backwards looking and non-stationary. Relying on it underestimated risk going into the financial crisis and overestimated coming out of it (its beta has continued to fall over the past decade).
We care greatly about risk. We spend a significant amount of time thinking about the risks to our investments. We measure risk as permanent impairment of capital, which means the prices and values don’t bounce back. Business fundamentals determine risk.”
2. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 94
Dividend Yield as of May 20: 2.40%
Billionaire investor Mario Gabelli appears to be bullish on the financial services sector. As of Q1 2022, GAMCO Investors owns more than 1.39 million shares of Wells Fargo & Company (NYSE:WFC). The fund’s Q1 stakes are estimated at $67.58 million, which accounts for 0.61% of its investment portfolio. Wells Fargo & Company (NYSE:WFC) is a top dividend stock pick of Mr. Gabelli and boasts a forward yield of 2.40% as of May 20.
On April 18, Barclays analyst Jason Goldberg raised his price target on Wells Fargo & Company (NYSE:WFC) to $64 from $62 and reiterated an Overweight rating on the shares.
Davis Funds, an investment management firm, named a few companies in its “Davis Opportunity Fund” fourth-quarter 2021 investor letter and Wells Fargo & Company (NYSE:WFC) was one of them. Here is what the firm said:
“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Wells Fargo.”
1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 107
Dividend Yield as of May 20: 3.41%
Topping our rankings of the 10 dividend stocks billionaire Mario Gabelli loves is JPMorgan Chase & Co. (NYSE:JPM). As of March 31, GAMCO Investors’ stakes in JPMorgan Chase & Co. (NYSE:JPM) stand at $55.49 million which represents 0.5% of its investment portfolio. JPMorgan Chase & Co (NYSE:JPM) is the largest bank in the United States, with a balance sheet totaling $2.87 trillion. As of May 20, the stock has a forward dividend yield of 3.41% and PE ratio of 10.57. JPMorgan Chase & Co. (NYSE:JPM) has been hiking its dividends for almost a decade now and boasts a 5-year dividend growth rate of 14.99%, with an annual payout ratio of 29.35%.
Here is what ClearBridge Investments had to say about JPMorgan Chase & Co. (NYSE:JPM) in its “Large Cap Value Strategy” fourth-quarter 2021 investor letter:
“Our energy and financials holdings kept pace in the 2021 rally. In financials, JPMorgan benefited from strong economic growth, a rise in Treasury yields, and a benign credit environment.”
You can also take a look at 10 Best Dividend Stocks to Buy According to Billionaire Howard Marks and Billionaire Mario Gabelli’s Top 10 Stock Picks.
