In this article, we discuss 5 dividend stocks to buy in the financial services sector. If you want to read our detailed analysis of the financial services sector’s performance and the recent market selloff as well as the risk/reward and methodology of this list, go directly to read 10 Dividend Stocks to Buy in the Financial Services Sector.
5. The Goldman Sachs Group, Inc. (NYSE:GS)
Number of Hedge Fund Holders: 69
Dividend Yield as of September 13: 2.92%
The Goldman Sachs Group, Inc. (NYSE:GS) is a multinational investment bank and financial services company that provides a wide range of financial services to its consumers. In July, BMO Capital reiterated its Outperform rating on the stock with a $461 price target, highlighting the company’s impressive revenue-driven beat and improving profitability.
In Q2 2022, The Goldman Sachs Group, Inc. (NYSE:GS) reported strong earnings, beating Street estimates. The company posted a GAAP EPS of $7.73 and revenue of $11.86 billion, which surpassed consensus by $1.04 and $1.16 billion, respectively. At the end of the quarter, the company had $288 billion in cash and cash equivalents, up from $274 billion in the previous quarter. It returned $1.22 billion to shareholders during the quarter, $719 million of which accounted for dividend payments.
On July 18, The Goldman Sachs Group, Inc. (NYSE:GS) declared a 25% hike in its dividends, which takes its quarterly payout to $2.50 per share. This was the company’s 10th consecutive year of dividend growth. As of September 13, the stock’s dividend yield came in at 2.92%.
At the end of Q2 2022, 69 hedge funds tracked by Insider Monkey owned stakes in The Goldman Sachs Group, Inc. (NYSE:GS), down from 71 in the previous quarter. These stakes have a collective value of over $4.6 billion. Eagle Capital Management was the company’s leading stakeholder in Q2.
GoodHaven Capital Management mentioned The Goldman Sachs Group, Inc. (NYSE:GS) in its Q2 2022 investor letter. Here is what the firm has to say:
“We also initiated a position in The Goldman Sachs Group, Inc. (NYSE:GS) at an inexpensive valuation and are attracted by the potential durability of the company’s ability to generate high returns on equity driven in part by the growth in their existing and new franchises.”
4. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Holders: 84
Dividend Yield as of September 13: 0.92%
S&P Global Inc. (NYSE:SPGI) is a Manhattan-based multinational company that specializes in financial information and analytics. The company generated revenue of roughly $3 billion in Q2 2022, which showed a 41.7% year-over-year growth. In the first six months of the year, its cash flow from operating activities stood at $676 million and its free cash flow came in at $510 million. During the quarter, the company returned $1.8 billion to shareholders, with $286 million distributed in dividends.
S&P Global Inc. (NYSE:SPGI) holds a strong dividend history, as it has been paying dividends consistently since 1937. It has also been raising dividends for the past 49 years consecutively. It currently pays a quarterly dividend of $0.85 per share, with a dividend yield of 0.92%, as recorded on September 13.
In August, Oppenheimer lifted its price target on S&P Global Inc. (NYSE:SPGI) to $419 with an Outperform rating on the shares, appreciating the company’s strong start to the third quarter. The firm also believes that the corporation is an attractive buying opportunity for long-term investors.
At the end of June 2022, 84 hedge funds in Insider Monkey’s database owned stakes in S&P Global Inc. (NYSE:SPGI), compared with 97 in the previous quarter. These stakes hold a collective value of over $7.2 billion.
Baron Funds mentioned S&P Global Inc. (NYSE:SPGI) in its Q2 2022 investor letter. Here is what the firm has to say:
“Another example is S&P Global (NYSE:SPGI), the leading rating agency and data provider, whose stock declined 29.0% year-to-date and 17.5% during the second quarter as a result of growing investor concerns over the slowdown in debt issuance. While debt issuance volumes have seen a dramatic decline – the worst quarterly decline in a decade (down 41% year-over-year in the second quarter based on Goldman Sachs estimates), – and this led management to withdraw its 2022 guidance in early June, we do not believe it would result in a permanent loss of capital.
First, ratings represent only about 30% of S&P Global’s total revenues. Second, despite inherent volatility in quarterly or annual issuance, over the long-term issuance volumes follow the trends in levels of debt outstanding, which has compounded in the mid-single digits for many years. Lastly, we believe that S&P Global’s strong competitive positioning will enable it to continue benefiting from pricing power, while taking advantage of secular tailwinds such as the growth in passive and ESG investing, international expansion, and the growing demand for data analytics.”
3. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 104
Dividend Yield as of September 13: 3.32%
Up next on our list of dividend stocks to buy in the financial services sector is JPMorgan Chase & Co. (NYSE:JPM), which is a multinational investment bank and financial services holding company. In July, Berenberg upgraded the stock to Hold with a $120 price target, appreciating the company’s position in the current challenging environment.
In Q2 2022, JPMorgan Chase & Co. (NYSE:JPM) reported a 7% growth in its average loans and its average deposits grew by 9% from the previous quarter. The company’s revenue for the quarter came in at $30.7 billion and its managed revenue stood at $31.6 billion. It also generated $66 billion in operating cash flow, exhibiting a strong cash position.
JPMorgan Chase & Co. (NYSE:JPM) maintains an 11-year track record of consistent dividend growth and has raised its payouts at a CAGR of 15.33% in the last five years. Currently, it pays a quarterly dividend of $1.00 per share and has a yield of 3.32%, as of September 13.
According to Insider Monkey’s database, 104 hedge funds owned investments in JPMorgan Chase & Co. (NYSE:JPM) in Q2 2022, compared with 110 in the previous quarter. These investments hold a combined value of $5.8 billion. Ken Fisher’s Fisher Asset Management was the company’s leading stakeholder in Q2.
2. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 137
Dividend Yield as of September 13: 0.58%
Mastercard Incorporated (NYSE:MA) is an American multinational financial services corporation that specializes in payment and credit card services. In Q2 2022, the company was popular among 137 elite funds, compared with 136 in the previous quarter, according to Insider Monkey’s data. The stakes owned by these hedge funds hold a consolidated value of roughly $15 billion.
In Q2 2022, Mastercard Incorporated (NYSE:MA) reported strong financials as its free cash flow grew to $2.2 billion, from $1.48 billion in the previous quarter. The company paid $477 million in dividends during the quarter, which shows that dividends are stable due to strong free cash flow generation. Its revenue for the quarter came in at $5.5 billion, which presented a 21.4% year-over-year growth.
Mastercard Incorporated (NYSE:MA) has been raising its dividends consistently for the past eight years consistently. Its current quarterly dividend stands at $0.49 per share, with a dividend yield of 0.58%, as recorded on September 13.
Deutsche Bank raised its price target on Mastercard Incorporated (NYSE:MA) in September to $440 and maintained its Buy rating on the shares. The firm highlighted the company’s trends in cryptocurrency and blockchain technology.
Baron Funds mentioned Mastercard Incorporated (NYSE:MA) in its Q2 2022 investor letter. Here is what the firm has to say:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Mastercard Incorporated (NYSE:MA) added the most value. These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 166
Dividend Yield as of September 13: 0.73%
Visa Inc. (NYSE:V) is a California-based financial services company that specializes in debit cards, credit cards, and prepaid cards. The company also facilitates electronic funds transfers throughout the world. Over the past quarters, the company has reported strong credit trends and in view of this, Mizuho lifted its price target on the stock in July to $220 with a Neutral rating on the shares.
Visa Inc. (NYSE:V) has been raising its dividends consistently for the past 13 years. It currently pays a quarterly dividend of $0.375 per share, with a dividend yield of 0.73%, as recorded on September 13.
Visa Inc. (NYSE:V) was a popular stock among elite funds in Q2 2022, as 166 hedge funds in Insider Monkey’s database owned stakes in the company, up from 159 in the previous quarter. These stakes hold a collective value of over $24 billion.
Baron Funds mentioned Visa Inc. (NYSE:V) in its Q2 2022 investor letter. Here is what the firm has to say:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Visa, Inc. (NYSE:V). These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
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