In this article, we discuss 5 dividend stock picks of legendary value investor Joel Greenblatt. If you want to see some more dividend stocks in his portfolio, click Legendary Value Investor Joel Greenblatt’s 10 Dividend Stock Picks.
5. Walmart Inc. (NYSE:WMT)
Gotham Asset Management’s Stake Value: $20,199,000
Dividend Yield as of March 25: 1.56%
Number of Hedge Fund Holders: 63
Walmart Inc. (NYSE:WMT) is an American retailer that operates a chain of supercenters, supermarkets, and hypermarkets across the country. 13F filings for Q4 2021 show that Gotham Asset Management owns 139,600 shares of Walmart Inc. (NYSE:WMT), worth $20.1 million. The hedge fund elevated its position in the company by 3% in the fourth quarter.
Walmart Inc. (NYSE:WMT)’s dividend yield on March 25 was 1.56%, and 2022 marks the 49th consecutive year of dividend increases by the company. On February 17, Walmart Inc. (NYSE:WMT) declared a $0.56 per share quarterly dividend, a 1.8% increase from its prior dividend of $0.55. The dividend is payable on April 4, to shareholders of record on March 18.
On March 16, Morgan Stanley analyst Simeon Gutman stated that Walmart Inc. (NYSE:WMT)’s fintech startup, ONE, is creating an “affordable and broadly accessible digital platform”. He expects ONE to increase customer engagement and brand affinity to Walmart Inc. (NYSE:WMT)’s core retail business. The analyst considers this to be a revenue opportunity of $1.6 billion. He maintained an Overweight rating and a $167 price target on Walmart Inc. (NYSE:WMT) shares.
According to Insider Monkey’s Q4 data, GQG Partners is the biggest Walmart Inc. (NYSE:WMT) shareholder, with 10.4 million shares worth $1.50 billion. Overall, 63 hedge funds were bullish on the stock at the end of December 2021.
4. Intel Corporation (NASDAQ:INTC)
Gotham Asset Management’s Stake Value: $20,744,000
Dividend Yield as of March 25: 2.82%
Number of Hedge Fund Holders: 72
Intel Corporation (NASDAQ:INTC) is a California-based provider of computer hardware, internet technologies, and cloud services. Joel Greenblatt increased his Intel Corporation (NASDAQ:INTC) stake by 57% to 402,800 shares, worth $20.7 million. The stock accounts for 0.66% of the total 13F investments.
Intel Corporation (NASDAQ:INTC) on January 26 declared a $0.365 per share quarterly dividend, a 5% increase from its earlier dividend of $0.347. The dividend was distributed on March 1. The stock yields 2.82% as of March 25.
On March 14, Citi analyst Christopher Danely told investors that Intel Corporation (NASDAQ:INTC) has faced several supply chain challenges. He believes PC sales “could cool off” in the second half of 2022 due to a reversion to the mean following two consecutive years of double digit growth. He reiterated a Neutral rating on Intel Corporation (NASDAQ:INTC).
The fourth quarter database of Insider Monkey reported that 72 hedge funds placed long bets on Intel Corporation (NASDAQ:INTC), up from 66 funds in the earlier quarter. Seth Klarman’s Baupost Group is the biggest shareholder of the company, owning more than 18 million shares worth approximately $929 million.
Here is what Davis Opportunity Fund has to say about Intel Corporation (NASDAQ:INTC) in its Q4 2021 investor letter:
“Within technology and communication services, we own a number of online businesses and semiconductor related companies, including Alphabet, Amazon, Intel, Applied Materials and Texas Instruments. Within the realm of high technology, we believe that leadership positions reflect enduring and widening competitive advantages over smaller competitors, with few exceptions. This is because online businesses, as well as semiconductor companies, benefit from economies of scale. An online search and advertising engine will, in general, be more profitable per unit of cost as it grows larger in terms of users and advertising dollars. It is a hub-and-spoke model, in other words, where it is generally not necessary to grow expenses at the same rate that revenues grow beyond a certain threshold. Therefore, returns on capital tend to be higher, the larger and more dominant the online search company is.”
3. Pfizer Inc. (NYSE:PFE)
Gotham Asset Management’s Stake Value: $22,054,000
Dividend Yield as of March 25: 3.03%
Number of Hedge Fund Holders: 83
Pfizer Inc. (NYSE:PFE) is an American company that manufactures and markets biopharmaceutical products worldwide. Joel Greenblatt’s Gotham Asset Management owns 373,485 shares of Pfizer Inc. (NYSE:PFE), valued at more than $22 million.
On December 10, Pfizer Inc. (NYSE:PFE) declared a $0.40 per share quarterly dividend, a 2.6% increase from its prior dividend of $0.39. The dividend was paid on March 4. The stock yields 3.03% as of March 25, and it is one of the fund’s top dividend picks for Q4.
Mizuho analyst Vamil Divan on February 10 lowered the price target on Pfizer Inc. (NYSE:PFE) to $55 from $56 and reiterated a Neutral rating on the shares. While the initial fiscal 2022 guidance may have disappointed some investors, the analyst believes there is “room for significant upside” in Pfizer Inc. (NYSE:PFE)’s product pipeline.
Among the hedge funds tracked by Insider Monkey, 83 funds were bullish on Pfizer Inc. (NYSE:PFE) at the end of December 2021, compared to 74 funds in the prior quarter. Coatue Management owns a prominent position in the company, with 10.3 million shares worth approximately $609 million.
Here is what Saturna Capital Amana Funds has to say about Pfizer Inc. (NYSE:PFE) in its Q3 2021 investor letter:
“The Fund’s strongest performer during the quarter was pharmaceutical manufacturer Pfizer. The company submitted trial data to the FDA for use of its COVID-19 vaccine for younger children, and it is widely expected that the FDA will approve it. Health authorities also began recommending booster shots of the Pfizer vaccine for select populations, further increasing demand for vaccinations.”
2. Apple Inc. (NASDAQ:AAPL)
Gotham Asset Management’s Stake Value: $52,395,000
Dividend Yield as of March 25: 0.50%
Number of Hedge Fund Holders: 134
Joel Greenblatt boosted his Apple Inc. (NASDAQ:AAPL) stake by 12% in Q4 2021, holding 295,067 shares worth $52.3 million, representing 1.69% of the 13F securities for the period. Apple Inc. (NASDAQ:AAPL) yields 0.50% as of March 25. On January 27, Apple Inc. (NASDAQ:AAPL) declared a quarterly dividend of $0.22 per share, in line with previous. The dividend was paid on February 7.
On March 23, Wedbush analyst Daniel Ives stated that despite stellar demand for Apple Inc. (NASDAQ:AAPL) iPhones, the supply chain shortages continue to be an issue. However, the analyst expects some notable improvements into the June quarter which bodes well for the upcoming iPhone 14 release. He has an Outperform rating and a price target of $200 on Apple Inc. (NASDAQ:AAPL) shares.
According to the fourth quarter database of Insider Monkey, 134 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), up from 120 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway held the biggest stake in Apple Inc. (NASDAQ:AAPL), with more than 887 million shares worth $157.5 billion.
Here is what Ariel Investments has to say about Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter:
“To give context to these returns, it is important to note there was inequity amongst equities. The tech giants continued their pursuit of world domination with a handful of names driving the S&P 500 to seventy(!) record highs. Dare we recall the “irrational exuberance” running rampant at the turn of the century? Yes, there was the ancillary contribution from a rebound among economically sensitive areas including Energy and Industrials, but like the late ‘90s, tech stocks reigned supreme. Just seven names now make up nearly a third of the index. The largest of all, Apple (AAPL), became the first company briefly dubbed a “3T”. (That’s a stock with a $3 trillion market cap.)”
1. Microsoft Corporation (NASDAQ:MSFT)
Gotham Asset Management’s Stake Value: $65,722,000
Dividend Yield as of March 25: 0.82%
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) is one of the Big Five American technology firms. Joel Greenblatt’s Gotham Asset Management owns 195,414 Microsoft Corporation (NASDAQ:MSFT) shares as per the 13F filings for Q4 2021. The stake is worth $65.7 million, representing 2.12% of the total portfolio.
On March 15, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.62 per share. The dividend will be distributed on June 9, to shareholders of record on May 19. Microsoft Corporation (NASDAQ:MSFT) yields 0.82% as of March 25. The company’s EPS is expected to reach $20, owing to the public cloud market that fetches hundreds of billions of dollars, in addition to multi-year deals and secular growth trends.
Jefferies analyst Brent Thill reiterated a Buy rating and $400 price target on Microsoft Corporation (NASDAQ:MSFT) shares on March 16. He believes that Microsoft Corporation (NASDAQ:MSFT)’s emerging Power Platform has “an outsized impact via a halo effect” on the entire product suite. He believes the Power Platform can be the “next growth engine” for the company.
Among the hedge funds tracked by Insider Monkey at the end of Q4 2021, 262 funds reported placing long bets on Microsoft Corporation (NASDAQ:MSFT), compared to 250 funds in the earlier quarter. Fisher Asset Management owns the largest stake in the company, with approximately 27 million shares worth over $9 billion.
Here is what Saturna Capital Amana Funds has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Only two companies remain from 2010’s top 10 list: Apple and Microsoft. Going back to 2000, only Microsoft remains. We expect that Microsoft will maintain its position as the dominant global provider of personal and business software, while growing its cloud business and potentially being a key provider of augmented and mixed hardware and software.
US Technology companies have been the equity market’s biggest winners in recent years. Because of the Amana Income Fund’s objective of current income, many of these zero- or low-dividend companies do not suit the Fund’s mandate. One that does — Microsoft, which returned 46.03% for 2021 — was the Fund’s second biggest contributor to returns during the year. While Technology no doubt underpins much of the current economy and its future potential, Tech stocks have also benefited from low inflation, globalization, and valuations that are near historic highs. With globalization backsliding and inflation worries escalating, we believe companies in other industries with strong financial positions, competitive advantages, strong management, attractive dividend yields, and reasonable valuations can offer investors diversification in the context of equity markets increasingly concentrated in a handful of very large Technology firms.”
You can also take a look at 10 Semiconductor Stocks to Buy Today According to Israel Englander’s Millennium Management and 10 Consumer Staples Stocks To Buy According To Billionaire Ray Dalio.
