In this article, we discuss the 9 dividend stocks to buy according to billionaire Dan Loeb’s Third Point. You can skip our detailed analysis of the hedge fund and its performance, and go directly to read 5 Dividend Stocks to Buy According to Billionaire Dan Loeb’s Third Point.
Daniel Loeb is an American investor, hedge fund manager, and the founder of Third Point Management, a New York-based hedge fund. Third Point follows value-oriented and event-driven investment strategies. Along with this, the hedge fund focuses on delivering risk-adjusted returns with limited market exposure. Loeb is currently serving as the CEO of the firm. According to Forbes, his real-time net worth, as of March 2022, stood at $4 billion.
According to Bloomberg, Dan Loeb grabbed 12th place in the list of top 15 hedge fund managers who collectively earned around $16 billion in 2021. This is the first time Loeb has been added to the list. This complies with the hedge fund’s performance for the year as its Offshore Fund gained 22.7% and Ultra Fund returned 26.9% in 2021. Moreover, since their inception, the annual average returns of the Offshore Fund and Ultra Fund stood at 15.1% and 21.8%, respectively, as reported by Forbes.
In his recent statement, Loeb said that his hedge fund prefers to invest in traditional value tech stocks. He particularly quoted Amazon.com, Inc. (NASDAQ:AMZN), asserting that the stock is trading at a 30% to 40% discount to its present intrinsic value. The hedge fund increased its position in the company by 28%. Moreover, traditional tech stocks, such as Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc. (NASDAQ:GOOG) were two of the major holdings of the hedge fund in the fourth quarter of 2021.
Our Methodology:
In this article, we discuss the best dividend stocks in Dan Loeb’s portfolio. For this list, we took data from Third Point’s 13F portfolio as of Q4 2021.
9 Dividend Stocks to Buy According to Billionaire Dan Loeb’s Third Point
9. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 87
Dividend Yield as of March 4: 0.36%
Third Point’s Stake Value: $954,129,000
Danaher Corporation (NYSE:DHR) is an American company that manufactures products belonging to several different industries. On February 23, the company announced a quarterly dividend of $0.25 per share, showing a 19% growth from its previous dividend. The stock’s dividend yield, as of March 4, stood at 0.36%.
In Q4 2021, Danaher Corporation (NYSE:DHR) was the second-largest holding of Third Point. The hedge fund held a stake worth over $954 million in the company, which accounted for 6.65% of Dan Loeb’s portfolio. Appreciating the company’s Q4 consistent results, in January, Wells Fargo set a $330 price target on Danaher Corporation (NYSE:DHR), with a Sector Perform rating on the shares.
By the end of Q4 2021, the number of hedge funds tracked by Insider Monkey holding stakes in Danaher Corporation (NYSE:DHR) grew significantly to 87, from 74 in the previous quarter. These stakes are valued at $7.37 billion. Fisher Asset Management held the largest stake in the company in Q4, valued at roughly $1.2 billion.
Along with Danaher Corporation (NYSE:DHR), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) are some of the hedge fund’s major holdings in Q4 2021.
ClearBridge Investments mentioned Danaher Corporation (NYSE:DHR) in its Q3 2021 investor letter. Here is what the firm has to say:
“Diversified health care company Danaher, a top contributor in the second quarter, had a strong third quarter as well, posting a strong beat-and-raise driven by COVID-19 testing, a rebound for in-person activity and no impact from variants/renewed shutdowns.”
8. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 82
Dividend Yield as of March 4: 0.58%
Third Point’s Stake Value: $739,703,000
Intuit Inc. (NASDAQ:INTU) is an American software company that specializes in financial software. According to Insider Monkey’s data, hedge fund interest spiked in the company in Q4. 82 hedge funds tracked by Insider Monkey held positions in Intuit Inc. (NASDAQ:INTU) in Q4, up from 64 in the previous quarter. These stakes hold a consolidated value of roughly $8 billion, showing considerable growth from $6.1 billion worth of stakes held by hedge funds in the preceding quarter.
Intuit Inc. (NASDAQ:INTU) currently pays a quarterly dividend of $0.68 per share, with a dividend yield of 0.58%, as of March 4. Though the company’s yield is comparatively low, it has been growing its dividends consistently since 2011. This January, BMO Capital initiated its coverage on Intuit Inc. (NASDAQ:INTU) with an Outperform rating and a $625 price target.
Third Point started investing in Intuit Inc. (NASDAQ:INTU) during the second quarter of 2020 and gradually strengthened its position in the company. In Q4 2021, the hedge fund increased its stake in the company by 5%, equaling roughly $740 million. Intuit Inc. (NASDAQ:INTU) represented 5.16% of Dan Loeb’s portfolio.
L1 Capital mentioned Intuit Inc. (NASDAQ:INTU) in its Q4 2021 investor letter. Here is what the investment management firm has to say:
“We trimmed our investment in Intuit following a period of strong share price performance. Our decision to reduce the size of Intuit’s position in the portfolio was solely due to our views on Intuit’s valuation relative to alternative investment opportunities, and reflects our valuation discipline, even for Quality 1 rated businesses. We would welcome the opportunity to increase our investment in Intuit should the share price fall further from current levels.”
7. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 96
Dividend Yield as of March 4: 1.19%
Third Point’s Stake Value: $396,691,000
In Q4 2021, Third Point increased its stake in UnitedHealth Group Incorporated (NYSE:UNH) by 17% and held stakes worth roughly $400 million. The American healthcare and insurance company constituted 2.76% of Dan Loeb’s portfolio in Q4.
With stakes worth roughly $2 billion, GQG Partners was the largest shareholder of UnitedHealth Group Incorporated (NYSE:UNH) in Q4. Along with this, 96 hedge funds in Insider Monkey’s database held stakes in the company in Q4, up from 95 in the previous quarter. The total value of these stakes is over $13.6 billion.
Appreciating the Q4 results of UnitedHealth Group Incorporated (NYSE:UNH), which fell in line with the company’s guidance, in January, Raymond James raised its price target on the stock to $540, while maintaining a Strong Buy rating on the shares. In 2021, UnitedHealth Group Incorporated (NYSE:UNH) grew its quarterly dividend by 16% at $1.45 per share. The stock’s dividend yield stood at 1.19%, as recorded on March 4. The company maintains a 12-year streak of consistent dividend growth.
Third Point Management mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2021 investor letter. Here is what the firm has to say:
“UnitedHealth is one of the largest healthcare companies in the world and a market leader in both its insurance and healthcare services (Optum) businesses. We initiated our position during the 2020 Presidential election at a time of heightened political and regulatory uncertainty.
We believe under its new CEO, Andrew Witty, UnitedHealth can not only preserve its market dominance and sustain industry-leading growth rates across most of its key segments but also enter new healthcare services markets. Witty is known as a mission-driven CEO who clearly articulates his view that providing high-quality, affordable health care services is a social good. He receives consistently high marks from former colleagues, and we believe that his leadership approach will ballast and even strengthen UNH’s already impressive management and employee ranks. The insurance and services businesses are synergistic and complementary, which entrenches United’s critical role in care financing, access, and management. This dynamic gives us confidence in the durability of United’s market leadership…” (Click here to see the full text)
6. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 50
Dividend Yield as of March 4: 1.22%
Third Point’s Stake Value: $518,188,000
Accenture plc (NYSE:ACN) is an Ireland-based multinational information technology company. This January, Goldman Sachs initiated its coverage on the stock with a Neutral rating and a $446 price target. The firm expected the company to benefit from increased IT services spending and also appreciated its management and execution.
In 2021, Accenture plc (NYSE:ACN) hiked its quarterly dividend by 10% at $0.97 per share, with a dividend yield of 1.22%, as of March 4. The company maintains a 16-year track record of consistent dividend growth. In Q4 2021, Accenture plc (NYSE:ACN) was the latest acquisition of Third Point, as the hedge fund started building its position in the company with stakes worth over $518 million. The company accounted for 3.61% of Dan Loeb’s portfolio. Besides Accenture plc (NYSE:ACN), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) are some other major blue-chip holdings of Third Point in Q4.
By the end of Q4 2021, 50 hedge funds tracked by Insider Monkey reported owning stakes in Accenture plc (NYSE:ACN), down from 56 in the previous quarter. These stakes hold a consolidated value of over $5.1 billion.
Polen Capital mentioned Accenture plc (NYSE:ACN) in its Q3 2021 investor letter. Here is what the firm has to say:
“Accenture continue to perform well as the business has grown through the pandemic. Accenture has benefited as businesses around the world have sought a trusted partner to enable their digital transformation. Those leading in the new world are accelerating investment, while those lagging are investing to close the gap. These are two great examples of the pandemic accelerating trends that were already in motion, making leaders more resilient.”
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Disclosure. None. 10 Dividend Stocks to Buy According to Billionaire Dan Loeb’s Third Point is originally published on Insider Monkey.
