In this article, we will be taking a look at the 5 high Sharpe ratio dividend stocks in the S&P 500. To read our detailed analysis of dividend investing, you can go directly to see the 10 High Sharpe Ratio Dividend Stocks in the S&P 500.
5. CMS Energy Corporation (NYSE: CMS)
Number of Hedge Fund Holders: 31
Dividend Yield: 2.7%
Sharpe Ratio: 1.2
CMS Energy Corporation (NYSE: CMS) is an energy company operating primarily in Michigan through its Electric Utility, Gas Utility, Enterprises, and EnerBank segments. It ranks 5th on our list of high Sharpe ratio dividend stocks in the S&P 500. The company is based in Jackson, Michigan.
This July, KeyBanc’s Sophie Karp upgraded shares of CMS Energy Corporation (NYSE: CMS) from Sector Weight to Overweight alongside setting a price target of $67 on the shares.
In the second quarter of 2021, CMS Energy Corporation (NYSE: CMS) had an EPS of $0.55, beating estimates by $0.10. The company’s revenue was $1.56 billion, up 7.97% year over year and beating estimates by $50.58 million. CMS Energy Corporation (NYSE: CMS) has gained 16.45% in the past 6 months and 7.10% year to date.
By the end of the second quarter of 2021, 31 hedge funds out of the 873 tracked by Insider Monkey held stakes in CMS Energy Corporation (NYSE: CMS) worth roughly $693 million. This is compared to 28 hedge funds in the previous quarter with a total stake value of approximately $955 million.
Miller/Howard Investments, an investment management firm, mentioned CMS Energy Corporation (NYSE: CMS) in its first-quarter 2021 investor letter. Here’s what they said:
” We added CMS Energy Corp. (CMS), a name poised to benefit from above-average earnings growth. We initiated a position in this high-quality utility after a period of relative weakness in which its premium to the group narrowed.”
4. The Home Depot, Inc. (NYSE: HD)
Number of Hedge Fund Holders: 64
Dividend Yield: 2.05%
Sharpe Ratio: 1.3
The Home Depot, Inc. (NYSE: HD), a home improvement retail company, is next on our list of high Sharpe ratio dividend stocks in the S&P 500, ranking 4th. The company provides building materials, home improvement products, building materials, lawn and garden products, and décor products, alongside installation, home maintenance, and professional service programs to do-it-yourself and professional customers.
As of this August, Jefferies analyst Jonathan Matuszewski holds a Buy rating on shares of The Home Depot, Inc. (NYSE: HD), alongside a price target of $369.
In the fiscal second quarter of 2022, The Home Depot, Inc. (NYSE: HD) had an EPS of $4.53, beating estimates by $0.10. The company’s revenue was $41.12 billion, up 8.05% year over year and beating estimates by $380.39 million. The Home Depot, Inc. (NYSE: HD) has gained 22.88% in the past 6 months and 21.81% year to date.
By the end of the second quarter of 2021, 64 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Home Depot, Inc. (NYSE: HD) worth roughly $4.2 billion. This is compared to 68 hedge funds in the previous quarter with a total stake value of approximately $4.4 billion.
Nelson Capital Management, an investment management firm, mentioned The Home Depot, Inc. (NYSE: HD) in its second-quarter 2021 investor letter. Here’s what they said:
“In the consumer discretionary sector, we trimmed pandemic winners in favor of companies we believe will outperform in a recovery period. We also trimmed our position in Home Depot (tkr: HD), as it will be challenged by tough comparable statistics, supply chain issues, and rising commodity costs.”
3. Cincinnati Financial Corporation (NASDAQ: CINF)
Number of Hedge Fund Holders: 22
Dividend Yield: 2.06%
Sharpe Ratio: 1.3
Cincinnati Financial Corporation (NASDAQ: CINF), a financial services company, offers property-casualty insurance products in the United States. The company ranks 3rd on our list of high Sharpe ratio dividend stocks in the S&P 500 and operates through its Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments segments.
As of this August, Wolfe Research’s Michael Zaremski holds an Outperform rating on shares of Cincinnati Financial Corporation (NASDAQ: CINF), alongside a price target of $148.
In the second quarter of 2021, Cincinnati Financial Corporation (NASDAQ: CINF) had an EPS of $1.79, beating estimates by $0.81. The company’s revenue was $2.29 billion, also beating estimates by $578.93 million. Cincinnati Financial Corporation (NASDAQ: CINF) has gained 21.17% in the past 6 months and 45.07% year to date.
By the end of the second quarter of 2021, 22 hedge funds out of the 873 tracked by Insider Monkey held stakes in Cincinnati Financial Corporation (NASDAQ: CINF) worth roughly $780 million. This is compared to 22 hedge funds in the previous quarter with a total stake value of approximately $886 million.
2. McDonald’s Corporation (NYSE: MCD)
Number of Hedge Fund Holders: 66
Dividend Yield: 2.18%
Sharpe Ratio: 1.4
McDonald’s Corporation (NYSE: MCD), an American fast-food chain, is next on our list of high Sharpe ratio dividend stocks in the S&P 500. The company offers food products and beverages at its restaurants across the globe. It ranks 2nd on our list.
This July, Christopher Carril, an analyst at RBC Capital, raised his price target on shares of McDonald’s Corporation (NYSE: MCD) from $263 to $268. The analyst also reiterated an Outperform rating on McDonald’s Corporation (NYSE: MCD) shares.
In the second quarter of 2021, McDonald’s Corporation (NYSE: MCD) had an EPS of $2.37, beating estimates by $0.25. The company’s revenue was $5.89 billion, up 56.53% year over year and beating estimates by $319.30 million. McDonald’s Corporation (NYSE: MCD) has gained 13.78% in the past 6 months and 12.72% year to date.
By the end of the second quarter of 2021, 66 hedge funds out of the 873 tracked by Insider Monkey held stakes in McDonald’s Corporation (NYSE: MCD) worth roughly $2.7 billion. This is compared to 67 hedge funds in the previous quarter with a total stake value of approximately $3.8 billion.
1. NextEra Energy, Inc. (NYSE: NEE)
Number of Hedge Fund Holders: 59
Dividend Yield: 1.9%
Sharpe Ratio: 1.7
NextEra Energy, Inc. (NYSE: NEE), an electric utility company, is next and last on our list of high Sharpe ratio dividend stocks in the S&P 500, ranking 1st. The company generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America.
Maheep Mandloi, an analyst at Credit Suisse, holds an Outperform rating on shares of NextEra Energy, Inc. (NYSE: NEE) as of this July. The analyst also placed an $85 price target on the stock at the same time.
In the second quarter of 2021, NextEra Energy, Inc. (NYSE: NEE) had an EPS of $, beating estimates by $. The company’s revenue was $, up % year over year and beating estimates by $. NextEra Energy, Inc. (NYSE: NEE) has gained 10.41% in the past 6 months and 12.92% year to date.
By the end of the second quarter of 2021, 59 hedge funds out of the 873 tracked by Insider Monkey held stakes in NextEra Energy, Inc. (NYSE: NEE) worth roughly $2.7 billion. This is compared to 63 hedge funds in the previous quarter with a total stake value of approximately $2.7 billion.
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