Dividend Stock Portfolio: Top 5 Stock Picks By Hedge Funds

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 258

Dividend Yield as of November 2: 1.21%

Among the hedge funds tracked by Insider Monkey, Microsoft Corporation (NASDAQ:MSFT) is the top pick for a dividend stock portfolio. In the second quarter of 2022, Microsoft Corporation (NASDAQ:MSFT) was part of 258 hedge fund portfolios, compared to 259 in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a significant position holder in the company, with approximately 18 million shares worth $4.6 billion. 

On September 20, Microsoft Corporation (NASDAQ:MSFT) declared a $0.68 per share quarterly dividend, a 10.0% increase from its prior dividend of $0.62. The dividend is payable on December 8, to shareholders of record on November 17. Microsoft Corporation (NASDAQ:MSFT) also posted market-beating Q3 2022 financial results. 

Macquarie analyst Sarah Hindlian-Bowler on November 2 initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with a Neutral rating and a $234 price target. The analyst sees short-term headwinds for Microsoft Corporation (NASDAQ:MSFT) from weakness in the macro environment, cloud pull-in from COVID, softer PC sales, heightening energy costs, and low purchasing power.

Here is what Baron Funds specifically said about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2022 investor letter:

“Shares of Microsoft Corporation (NASDAQ:MSFT) pulled back with the overall software industry on the back of macroeconomic issues, including inflation concerns and rising interest rates. The company reported another strong quarter, highlighted by total revenues growing 16% on a constant currency basis and Microsoft Cloud revenues, now 48% of total sales, growing 33%, with Azure (Microsoft’s infrastructure cloud) growing 46%. These results were driven by strong demand for large commercial cloud contracts, as more businesses are standardizing on Microsoft’s platform and the company is signing larger and longer deals. Initial fiscal year 2023 guidance calls for healthy double-digit revenue and operating income growth. Both foreign exchange and personal computer headwinds were contemplated in the guidance and have continued to worsen, but we have conviction in the company’s strong competitive positioning, durable growth drivers, and margin expansion opportunity over the mid- to long term.”

You can also take a look at 10 Cheap Penny Stocks To Buy Now and 12 Best Annual Dividend Stocks To Invest In. 

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