In this article, we discuss the 5 best dividend stocks to buy according to Joel Greenblatt’s Gotham Asset Management. If you want to read our detailed analysis of Greenblatt’s hedge fund and its returns over the years, go directly to read 10 Dividend Stocks to Buy According to Joel Greenblatt’s Gotham Asset Management.
5. Target Corporation (NYSE:TGT)
Dividend Yield: 1.61%
Number of Hedge Fund Holders: 49
Target Corporation (NYSE:TGT), an American retail company, holds a 50-year track record of consistent dividend growth.
In Q3 2021, Target Corporation (NYSE:TGT) posted an EPS of $3.03, surpassing estimates by $0.23. Overall, the company has beaten revenue and EPS estimates 100% of the time over the last two years.
Gotham Asset Management started building its position in Target Corporation (NYSE:TGT) during the fourth quarter of 2010. In Q3 2021, the company accounted for 0.55% of Joel Greenblatt’s portfolio.
At the end of Q3 2021, 49 hedge funds tracked by Insider Monkey were bullish on Target Corporation (NYSE:TGT), down from 66 in the previous quarter. These stakes hold a consolidated value of over $4.3 billion.
Nelson Capital Management mentioned Target Corporation (NYSE:TGT) in its Q2 2021 investor letter. Here is what the firm has to say:
“We added Target (tkr: TGT) to our consumer staples sector. Target offers a broad array of products in owned and known brand items at affordable prices. Its omnichannel fulfilment centers allow customers to receive their items via in-store pickup, curbside pickup, same-day shipping and regular shipping while simultaneously reducing operating costs. With a significantly lower valuation than peers and a unique operating strategy, Target is an attractive holding.”
4. Automatic Data Processing, Inc. (NASDAQ:ADP)
Dividend Yield: 1.81%
Number of Hedge Fund Holders: 43
Automatic Data Processing, Inc. (NASDAQ:ADP) is an American company that offers HR solutions to its consumers. In Q3 2021, the number of hedge funds tracked by Insider Monkey having stakes in the company grew to 43, from 41 in the previous quarter. These stakes hold a consolidated value of $3.6 billion, up from $3 billion in Q2.
Gotham Asset Management increased its stake by 28% in Automatic Data Processing, Inc. (NASDAQ:ADP) in Q3, and now holds shares worth $14.4 million.
On November 10, Automatic Data Processing, Inc. (NASDAQ:ADP) increased its quarterly dividend by 12% to $1.04 per share, with a dividend yield of 1.81%. The company has a track record of 46 years of consistent dividend growth.
3. Cisco Systems, Inc. (NASDAQ:CSCO)
Dividend Yield: 2.45%
Number of Hedge Fund Holders: 63
Cisco Systems, Inc. (NASDAQ:CSCO) is an American technology company that mainly specializes in hardware, software, and telecommunications equipment. Recently, the company was listed as one of the top picks of Evercore for 2022 in the hardware and IT sector.
Cisco Systems, Inc. (NASDAQ:CSCO) has an 11-year track record of consistent dividend growth.
ClearBridge Investments mentioned Cisco Systems, Inc. (NASDAQ:CSCO) in its Q1 2021 investor letter. Here is what the firm has to say:
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
2. Johnson & Johnson (NYSE:JNJ)
Dividend Yield: 2.52%
Number of Hedge Fund Holders: 88
Gotham Asset Management started investing in Johnson & Johnson (NYSE:JNJ) during the fourth quarter of 2010. In Q3 2021, the hedge fund held a stake worth $18.1 million in the company, which represented 0.73% of its portfolio.
Johnson & Johnson (NYSE:JNJ) has been paying dividends to its shareholders consecutively for the past 59 years. Currently, the company pays an annual dividend of $4.24 per share, with a dividend yield of 2.52%.
Distillate Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter. Here is what the firm has to say:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
1. Pfizer Inc. (NYSE:PFE)
Dividend Yield: 2.62%
Number of Hedge Fund Holders: 74
Pfizer Inc. (NYSE:PFE) was the eighth-largest holding of Gotham Asset Management in Q3. The hedge fund holds shares worth $22.8 million in the company, which represented 0.92% of Joel Greenblatt’s portfolio.
Recently, Pfizer Inc. (NYSE:PFE) uplifted its sales guidance for Covid-19 vaccines to $31 billion for 2022, up from its previous estimates of $29 billion. The company currently pays an annual dividend of $1.56 per share, with a dividend yield of 2.62%.
Saturna Capital mentioned Pfizer Inc. (NYSE:PFE) in its Q3 2021 investor letter. Here is what the firm has to say:
“The Fund’s strongest performer during the quarter was pharmaceutical manufacturer Pfizer. The company submitted trial data to the FDA for use of its COVID-19 vaccine for younger children, and it is widely expected that the FDA will approve it. Health authorities also began recommending booster shots of the Pfizer vaccine for select populations, further increasing demand for vaccinations.”
You can also take a look at 10 Best Dividend Stocks Under $20 and 10 Best Healthcare Dividend Stocks
