In this article, we discuss 5 dividend stocks to buy according to Richard Hamm’s Bristol Gate Capital. If you want to read our detailed analysis of the hedge fund’s past performance, go directly to read 9 Dividend Stocks to Buy According to Richard Hamm’s Bristol Gate Capital.
5. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 103
Dividend Yield as of May 27: 1.15%
Bristol Gate Capital’s Stake Value: $118,097,000
An American multinational healthcare and insurance company, UnitedHealth Group Incorporated (NYSE:UNH) recently announced to expand its telehealth sector to manage cost control. In Q1 2022, the company generated revenue of $80.1 billion, which presented a 10% growth from the same period last year.
At the end of Q1 2022, UnitedHealth Group Incorporated (NYSE:UNH) was the largest holding of Bristol Gate Capital, as the hedge fund held shares worth over $118 million in the company. The hedge fund bought an additional 8,000 shares in the company during Q1, worth roughly $6 million. UnitedHealth Group Incorporated (NYSE:UNH) represented 5.78% of the fund’s 13F portfolio.
In February, UnitedHealth Group Incorporated (NYSE:UNH) announced a quarterly dividend of $1.45 per share, in line with its previous dividend. The company last raised its dividend in June 2021, marking an 11th consecutive year of dividend growth. As of May 27, the stock’s dividend yield stood at 1.15%. Highlighting the strong performance of the stock and growth in its earnings, in May, Bernstein set a $561 price target on UnitedHealth Group Incorporated (NYSE:UNH), with a Market Perform rating on the shares.
In addition to Bristol Gate, 103 hedge funds tracked by Insider Monkey reported owning stakes in UnitedHealth Group Incorporated (NYSE:UNH) in Q1 2022, up from 96 in the quarter earlier. The consolidated value of these stakes is roughly $13 billion. With a stake worth over $1.48 billion, Eagle Capital Management was the largest shareholder of the Minnesota-based company in Q1 2022.
Baron Funds mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2022 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated (NYSE:UNH) is a leading diversified health and wellbeing company whose divisions include insurance arm, United Healthcare and healthcare services arm, Optum, which offers care delivery and other services. Shares increased 1.8% on good fourth quarter results with revenues up 12.5% year-over-year, operating margins of 7.5% and EPS up 78% while also reaffirming its 2022 guidance. We believe UnitedHealth leads the health care industry in innovation and execution as evidenced by its strong value proposition leading to Medicare Advantage share gains, strong cost controls, and its leadership position in the shift to value-based care.”
4. Microchip Technology Incorporated (NASDAQ:MCHP)
Number of Hedge Fund Holders: 42
Dividend Yield as of May 27: 1.58%
Bristol Gate Capital’s Stake Value: $87,558,000
Microchip Technology Incorporated (NASDAQ:MCHP) is an American company that manufactures microcontrollers and integrated circuits. The company was the latest addition to Bristol Gate Capital’s portfolio. The hedge fund initiated its position in the company with roughly 1.2 million shares, worth over $87.5 million. Microchip Technology Incorporated (NASDAQ:MCHP) represented 4.29% of the hedge fund’s Q1 2022 portfolio.
In May, Microchip Technology Incorporated (NASDAQ:MCHP) raised its quarterly dividend by 9% to $0.276 per share. The company maintains a 19-year track record of consistent dividend growth. As of May 27, the stock’s dividend yield was recorded at 1.58%.
In its May investors’ note, BMO Capital appreciated the strong business fundamentals of Microchip Technology Incorporated (NASDAQ:MCHP) and set an $85 price target on the stock, with an Outperform rating on the shares. The firm’s analyst also appreciated the company’s strong fiscal Q4 2022 earnings.
At the end of Q1 2022, the number of hedge funds tracked by Insider Monkey owning stakes in Microchip Technology Incorporated (NASDAQ:MCHP) declined to 42, from 48 in the previous quarter. The consolidated value of these stakes stood at over $993.2 million. Among these hedge funds, Platinum Asset Management was the largest shareholder of the company in Q1 2022, with shares worth over $305.5 million.
3. Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 65
Dividend Yield as of May 27: 1.64%
Bristol Gate Capital’s Stake Value: $78,539,000
Lowe’s Companies, Inc. (NYSE:LOW), an American retail company, announced a 20% year-over-year growth in its pro customer sales in Q1 2022. The company’s total sales also jumped to $99 billion from $97 billion recorded during the same period last year. In view of this, in May, Truist set a $237 price target on Lowe’s Companies, Inc. (NYSE:LOW), with a Buy rating on the shares.
As per Insider Monkey’s Q1 2022 database, 65 hedge funds reported owning stakes in Lowe’s Companies, Inc. (NYSE:LOW), down from 72 in the previous quarter. The total value of these stakes is over $5.5 billion.
In March, Lowe’s Companies, Inc. (NYSE:LOW) announced a quarterly dividend of $0.80 per share, in line with its previous dividend. The company has been raising its dividends consecutively for the past 25 years and has paid dividends since 1961. As of the close of May 27, the stock’s dividend yield stood at 1.64%.
Bristol Gate opened a new position in Lowe’s Companies, Inc. (NYSE:LOW) during Q1 2022, buying 388,442 shares worth over $78.5 million. The company represented 3.84% of the hedge fund’s 13F portfolio.
Pershing Square Capital Management mentioned Lowe’s Companies, Inc. (NYSE:LOW) in its Q4 2021 investor letter. Here is what the firm has to say:
“Lowe’s is a high-quality business with significant long-term earnings growth potential
Supportive macroeconomic backdrop
-Aging housing stock, lack of new inventory, robust home equity values, and unprecedented pro project backlog
-COVID-19 causing millennials to enter the housing marketPositioned to grow EPS largely independent of market conditions
-Idiosyncratic revenue opportunities driving share gains
-Self-help initiatives catalyzing operating margin expansion
-Buybacks representing ~8% of current market capitalization planned for 2022Multi-year business transformation with substantial earnings upside
-Margin target of 13% has substantial upside; Home Depot at ~15.3% and increasing
-Potential to generate high-teens EPS growth over the next several years.Lowe’s continues to trade at a significantly discounted P/E multiple relative to Home Depot despite materially higher prospective EPS growth. LOW’s share price including dividends increased 63% in 2021 and has decreased 10% year-to-date in 2022.”
2. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 50
Dividend Yield as of May 27: 2.25%
Bristol Gate Capital’s Stake Value: $91,074,000
American Tower Corporation (NYSE:AMT) is an American real estate investment trust company that specializes in broadcast communications infrastructure around the globe. Bristol Gate Capital initiated its position in the company during the fourth quarter of 2017, purchasing shares worth over $31.6 million. During Q1 2022, the hedge fund increased its stake in the company by 3%, owning shares worth over $91 million. American Tower Corporation (NYSE:AMT) represented 4.46% of the hedge fund’s 13F portfolio.
In May, American Tower Corporation (NYSE:AMT) announced a 2% hike in its quarterly dividend to $1.43 per share. The stock’s dividend yield was recorded at 2.25% on May 27. Presenting a positive outlook on the REITs sector, in April, Morgan Stanley lifted its price target on American Tower Corporation (NYSE:AMT) to $275, with an Equal Weight rating on the shares. The firm further highlighted the company’s investment in 5G in its April investors’ note.
At the end of Q1 2022, 50 hedge funds in Insider Monkey’s database reported owning stakes in American Tower Corporation (NYSE:AMT), down from 53 in the previous quarter. The total value of these stakes is over $4.1 billion. With a stake worth over $1.7 billion, Akre Capital Management held the largest position in the Boston-based company in Q1 2022.
1. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 71
Dividend Yield as of May 27: 2.98%
Bristol Gate Capital’s Stake Value: $113,483,000
Broadcom Inc. (NASDAQ:AVGO) is an American manufacturing company that specializes in the production of semiconductor and infrastructure software products. Recently, the company announced to buy VMWare, a cloud computing company, in a deal valued at $61 billion. Through this purchase, Broadcom Inc. (NASDAQ:AVGO) will move into the new space of enterprise software.
Broadcom Inc. (NASDAQ:AVGO) currently pays a quarterly dividend of $4.10 per share, with a dividend yield of 2.98%, as of the close of May 27. In December 2021, the company hiked its quarterly dividend by 14%, which marked the company’s 11th consecutive year of dividend growth.
At the end of Q1 2022, Bristol Gate Capital owned shares worth over $113.4 million in Broadcom Inc. (NASDAQ:AVGO) after increasing its position by 4%. The company represented 5.56% of the hedge fund’s 13F portfolio. The fund has been investing in the company since 2018.
In addition to Bristol Gate, 71 elite funds tracked by Insider Monkey held stakes in Broadcom Inc. (NASDAQ:AVGO) in Q1 2022, up from 62 in the previous quarter. These stakes are valued at roughly $5.5 billion, showing growth from $4.8 billion worth of stakes held by hedge funds in Q4 2021.
ClearBridge Investments mentioned Broadcom Inc. (NASDAQ:AVGO) in its Q4 2021 investor letter. Here is what the firm has to say:
“However, ClearBridge portfolio companies are responding by supporting their workforces and showing resilience in adapting and thriving. Semiconductor companies ClearBridge owns and engages with have been successful in advancing vaccinations in their global supply chains. In Malaysia, for example, Broadcom has taken part in PIKAS, a public-private partnership vaccination program focusing on the workforce in critical manufacturing sectors. By the summer of 2021 Broadcom was able to get over 90% of workers in its Penang factory at least one dose of vaccine, and roughly 73% fully vaccinated. Companies in the program also pay the administration cost for vaccinations including cases where the employee is no longer employed by the company before full immunization of the employee.”
You can also take a look at 10 Best Solar Energy Stocks to Buy for 2022 and 10 Best Semiconductor Stocks to Buy for 2022
