In this article, we discuss the top 5 dividend stock picks of elite hedge funds. If you want to see more stocks in this selection, check out Dividend Stock Portfolio: Top 10 Stock Picks By Hedge Funds.
5. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 104
Dividend Yield as of November 2: 3.13%
JPMorgan Chase & Co. (NYSE:JPM) is a New York-based financial services company that operates through four segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. On October 14, the company reported a Q3 GAAP EPS of $3.12 and a revenue of $32.72 billion, outperforming market estimates by $0.23 and $840 million, respectively. Q3 earnings largely benefited from robust performance in the consumer banking unit. As per the smart money, JPMorgan Chase & Co. (NYSE:JPM) is one of the best plays to consider for a dividend stock portfolio.
On October 17, Citi analyst Keith Horowitz reiterated a Buy rating on JPMorgan Chase & Co. (NYSE:JPM) with a $135 price target following the Q3 results. The analyst noted that the bank is “hitting on all cylinders” and that present share levels offer an “excellent entry point” for a “quality franchise.”
According to Insider Monkey’s Q2 data, 104 hedge funds were bullish on JPMorgan Chase & Co. (NYSE:JPM), compared to 110 funds in the last quarter. Ken Fisher’s Fisher Asset Management featured as the leading position holder in the company, with nearly 8 million shares worth $900 million.
Here is what Vltava Fund has to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q3 2022 investor letter:
“We regard JPM to be the strongest and best- managed bank in the world. It is a leader in investment banking, commercial banking, credit cards, and asset management. Its size (the largest bank in the USA, with nearly USD 4,000 billion in assets) and diversification give it a strong competitive advantage that is compounded by its cost advantages and the high costs to clients associated with switching banks. JPM’s management prides itself on running the only large bank to avoid major instability over the long term.
JP Morgan’s quality and strength first became fully evident in 2008 under the leadership of its CEO Jamie Dimon. Not only did JP Morgan help to stabilize the market by taking over the failing Bear Stearns in the spring of that year, but throughout the Great Financial Crisis it was the only big US bank that did not require government assistance and it was highly profitable even in the difficult year of 2008.
A well-functioning and efficient bank can be a very good long-term investment, because the interest compounding effect works well here. JPM’s return on equity (ROE) is well into the double digits and this puts it in a good position to continue producing better long-term returns than does the market. JPM has been very profitable even during years when interest rates were close to zero. The current – and perhaps not temporary – return to somewhat more normal, higher interest rates should have a significantly positive impact on the bank’s interest income and overall profitability.”
