In this article, we discuss 5 dividend stocks that analysts are recommending. If you want our detailed analysis of these stocks, go directly to Analysts Are Recommending These 10 Dividend Stocks.
5. Chevron Corporation (NYSE:CVX)
Dividend Yield as of January 14: 4.16%
Number of Hedge Fund Holders: 51
Chevron Corporation (NYSE:CVX) is an American multinational energy company, distributing gasoline, natural gas, and petrochemicals worldwide. Chevron Corporation (NYSE:CVX) is a popular stock among the smart money. The Q3 database of Insider Monkey suggested that 51 hedge funds held stakes in Chevron Corporation (NYSE:CVX), worth $4.4 billion.
On January 14, Truist analyst Neal Dingmann raised the price target on Chevron Corporation (NYSE:CVX) to $167 from $150 and kept a Buy rating on the shares as part of a broader research note on the exploration and production group. The analyst stated that companies dealing primarily in oil have been assigned higher price targets as he increases his 2022 oil price estimates by roughly 10% and his 2023 deck by about 8%.
Chevron Corporation (NYSE:CVX) declared on October 18 a quarterly dividend of $1.34 per share, which was paid on December 10 to shareholders of record on November 18. The company offers a solid dividend payout ratio of 62.40%, and has been successively increasing its dividend yield for 34 years.
Consistent with its track record of returning excess cash to shareholders, Chevron Corporation (NYSE:CVX) on December 1 announced that it is raising its share buyback guidance range to $3 billion-$5 billion per year, as compared to the prior guidance of $2 billion-$3 billion per year.
Ric Dillon’s Diamond Hill Capital is the biggest Chevron Corporation (NYSE:CVX) stakeholder, with the hedge fund holding 5.1 million shares of the company, worth $523.8 million.
Here is what Goehring & Rozencwajg Associates has to say about Chevron Corporation (NYSE:CVX) in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publicly expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
4. Simon Property Group, Inc. (NYSE:SPG)
Dividend Yield as of January 14: 4.24%
Number of Hedge Fund Holders: 38
Simon Property Group, Inc. (NYSE:SPG) is an Indiana-based real estate investment trust with a portfolio of assets including shopping malls and community centers. Simon Property Group, Inc. (NYSE:SPG) maintains properties across North America and Asia, and is the largest owner of shopping malls in the United States. The company exceeded market consensus estimates for FFO, GAAP EPS, and revenue in the third quarter.
Truist analyst Ki Bin Kim on December 1 raised the price target on Simon Property Group, Inc. (NYSE:SPG) to $160 from $136 and kept a Buy rating on the shares.
In the third quarter of 2021, 38 hedge funds in the database of elite funds tracked by Insider Monkey were bullish on Simon Property Group, Inc. (NYSE:SPG), with stakes totaling $726.4 million. Jack Woodruff’s Candlestick Capital Management is one of the leading stakeholders of the company, holding 750,000 shares worth $97.4 million.
On November 1, Simon Property Group, Inc. (NYSE:SPG) declared a quarterly per share dividend equaling $1.65, reflecting a 10% increase from the prior dividend of $1.50, and a 26.9% increase year-over-year. The dividend was paid on December 31, to shareholders of record on December 10.
Simon Property Group, Inc. (NYSE:SPG) disclosed on January 4 that it will sell $500 million of its floating rate notes due 2024 and $700 million of its 2.650% notes due 2032. The proceeds will be utilized to pay off outstanding debt under its $3.5 billion supplemental senior unsecured revolving credit facility and for relevant corporate purposes.
3. Pinnacle West Capital Corporation (NYSE:PNW)
Dividend Yield as of January 14: 4.70%
Number of Hedge Fund Holders: 21
Pinnacle West Capital Corporation (NYSE:PNW) is a utility company that owns and operates Arizona Public Service and Bright Canyon Energy, providing energy and electricity primarily to Arizona residents. As of January 14, Pinnacle West Capital Corporation (NYSE:PNW) provides a dividend yield of 4.70%.
Pinnacle West Capital Corporation (NYSE:PNW) declared a $0.85 per share quarterly dividend on December 16, in line with previous. The dividend is payable on March 1, to shareholders of record on February 1. The company has been providing a steady dividend growth for 10 years, with a payout ratio of approximately 65%.
Argus analyst Gary Hovis raised the price target on Pinnacle West Capital Corporation (NYSE:PNW) to $80 from $72 and kept a Buy rating on the shares on January 6. Demand for the company’s services has been on the rise as the climate warmed in Arizona, though a recent regulatory decision may hinder Pinnacle West Capital Corporation (NYSE:PNW) from growing earnings and dividends in the near term, the analyst tells investors in a research note. Shares are also inexpensive as compared to Pinnacle West Capital Corporation (NYSE:PNW)’s peer group with a projected 2022 price to earnings multiple of 16-times.
Among the hedge funds tracked by Insider Monkey in the third quarter of 2021, 21 funds reported owning stakes in Pinnacle West Capital Corporation (NYSE:PNW), worth $175 million, up from 18 funds in the preceding quarter holding stakes amounting to $143.6 million in Pinnacle West Capital Corporation (NYSE:PNW).
Renaissance Technologies, the largest Pinnacle West Capital Corporation (NYSE:PNW) stakeholder, elevated its position in the company by 58% in the third quarter, with 688,202 shares valued at roughly $50 million.
2. AT&T Inc. (NYSE:T)
Dividend Yield as of January 14: 7.65%
Number of Hedge Fund Holders: 66
AT&T Inc. (NYSE:T) is a Texas-based multinational conglomerate holding company which is the largest American provider of telecommunications and mobile telephone services.
Citi analyst Michael Rollins on January 11 added AT&T Inc. (NYSE:T) to the firm’s “positive catalyst watch list” while keeping a Buy rating on the shares with a $29 price target. The analyst observes the potential for consensus expectations to rise for postpaid phone net adds and progress towards closing the deal with Discovery could potentially reduce the valuation gap between AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ).
AT&T Inc. (NYSE:T) is also a leading provider of 5G services in the United States. On January 4, AT&T Inc. (NYSE:T) paired with NVIDIA Corporation (NASDAQ:NVDA) on a cloud gaming cross-promotion, where the former’s 5G users will get subscriptions to NVIDIA Corporation (NASDAQ:NVDA)’s GeForce NOW, a popular cloud gaming service.
In addition to that, AT&T Inc. (NYSE:T) on January 14 was a winning bidder at the 5G spectrum auction of flexible-use licenses from The Federal Communications Commission, with the company spending $9.1 billion to secure rights to use the airwaves.
Among the hedge funds monitored by Insider Monkey in the third quarter, 66 funds were bullish on AT&T Inc. (NYSE:T), holding stakes worth $3.2 billion. Billionaire Ken Griffin’s Citadel Investment Group is the largest AT&T Inc. (NYSE:T) stakeholder, with 34.7 million shares amounting to $939.5 million.
On December 16, AT&T Inc. (NYSE:T) declared a quarterly dividend per share of $0.52, in line with previous. The dividend is payable on February 1, to shareholders of record on January 10.
1. Ready Capital Corporation (NYSE:RC)
Dividend Yield as of January 14: 10.84%
Number of Hedge Fund Holders: 13
Ready Capital Corporation (NYSE:RC) is a real estate finance company that secures small to medium sized commercial loans valued up to $45 million, in the form of bridge loans and fixed rate financings for stable assets. Ready Capital Corporation (NYSE:RC) is one of the top dividend stocks that analysts are recommending, offering a yield of 10.84% as of January 14.
Riley analyst Matt Howlett raised the price target on Ready Capital Corporation (NYSE:RC) to $18 from $17 and reiterated a Buy rating on the shares on December 3. According to the analyst, the company is ideally positioned for rising interest rates with 70% of its loans offering a floating rate, combined with remaining fixed-rate products match funded. There is also marginal upside to estimates if Ready Capital Corporation (NYSE:RC) can lower its cost of capital.
On December 14, Ready Capital Corporation (NYSE:RC) declared a quarterly $0.42 per share dividend, in line with previous, which is payable on January 31. The company distributes 81.78% of its earnings after taxation to shareholders.
To make strategic investments in target assets and for general corporate expenditure, Ready Capital Corporation (NYSE:RC) on January 12 priced a public offering of 7 million common shares amounting to $108.9 million. The closing date of the deal was January 14, 2022.
Thomas Steyer’s Farallon Capital, the largest Ready Capital Corporation (NYSE:RC) stakeholder, owns 1.25 million shares of the company, worth roughly $18 million. Overall, 13 hedge funds in the Q3 database of Insider Monkey were bullish on the stock.
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