ClearBridge Investments, an investment management company, released its “ClearBridge Dividend Strategy” second quarter 2024 investor letter. A copy of the same can be downloaded here. In the second quarter, the S&P 500 Index increased 4.3%, for a half-year gain of 15.3%. The performance for the quarter was almost entirely driven by the information technology (or “IT”) sector. The firm has optimistic views about the economy and not expecting a recession near term despite a slowdown in activity. During the second quarter, the strategy underperformed its S&P 500 Index benchmark. The strategy gained four out of 11 sectors in which it was invested in the quarter on an absolute basis. The IT sector was the main positive contributor, while the materials and financial sectors detracted. Stock selection and sector allocation detracted, relatively. Please review the strategy’s top five holdings to see its best choices for 2024.
ClearBridge Dividend Strategy highlighted stocks like Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was 5.83%, and its shares gained 52.81% of their value over the last 52 weeks. On July 3, 2024, Alphabet Inc. (NASDAQ:GOOG) stock closed at $187.3 per share with a market capitalization of $2.305 trillion.
ClearBridge Dividend Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter:
“Communication services gains in the S&P 500 were driven mainly by Alphabet Inc. (NASDAQ:GOOG) (aka Google). The company has a dominant position in internet search and video advertising, and a solid cloud services business. Alphabet’s initiation of a dividend in the quarter enabled us to take a small position. We see further meaningful revenue opportunities from AI innovations across its segments and may look to increase our holdings over time. Alphabet’s exceptional balance sheet and improving cost efficiencies further solidify its strong position and growth prospects, and we expect its dividend will grow sharply over time.
The recent addition of Alphabet and Meta reflect the benefits of our flexible dividend approach. Our active (as opposed to formulaic) approach to dividends enabled us to move quickly and buy the shares soon after each announced its dividend. Over the years, our nimble approach to dividend investing has frequently enabled us to profit from long-term investments in high-growth technology companies that many passive or formulaic dividend investors likely missed (e.g., American Tower, Mastercard, Meta, Visa).”
Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 165 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter which was 166 in the previous quarter. Alphabet Inc.’s (NASDAQ:GOOG) trailing 12-month revenue is $318.15 billion and its year over year quarterly growth rate is 15.40%. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We discussed Alphabet Inc. (NASDAQ:GOOG) in in another article and shared biggest AI stories and ratings updates you should not miss this week. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
