In this article, we will discuss 10 dividend stocks in Rajiv Jain’s portfolio.
Rajiv Jain founded GQG Partners, a Florida-based investment management firm, in 2016. In just over five years, the hedge fund has grown tremendously, gaining serious traction first among its investors, and then later among its public shareholders. Before founding GQG Partners, Jain worked at Vontobel Asset Management for 22 years, refining his investment strategies. According to the firm’s official website, GQG currently manages $91 billion in assets and provides financial advisory services to over 800 companies.
In 2021, GQG Partners listed over 20% of its shares on the Australian Stock Exchange (ASX), which are valued at nearly $800 million. The firm’s IPO raised $1.18 billion, and gave it a $5.9 billion market capitalization, according to Financial Review. One of the main reasons for this step is that Australia offers a superannuation scheme, a mandatory retirement saving program which makes it very desirable for investment firms. Along with this, the firm also experimented with its investment strategies during the year, switching its focus to the energy sector and away from tech stocks. According to Jain, even though the tech sector performed remarkably in 2021, it is no longer an area of growth, and the latest trends in the market show signs of late-cycle. This shift proved beneficial for the hedge fund, as its global equity strategy returned 17.13% in 2021.
GQG Partners’ International Equality Dividend Income strategy aims to invest in dividend-paying companies with profitable prospects. In this regard, the hedge fund focuses on large-cap stocks from both emerging and developed markets and considers financial health, management quality, and earnings growth while investing. Dividend stocks made up a sizeable portion of the hedge fund’s Q4 portfolio.
As of Q4 2021, GQG Partners holds a 13F portfolio valued at $40.3 billion, up from $36.5 billion in the previous quarter. The hedge fund had prominent investments in the healthcare, financial, basic materials, and services sectors. Some of the hedge fund’s major holdings in the fourth quarter were Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Johnson & Johnson (NYSE:JNJ).
Our Methodology:
In this article, we discuss the top dividend stocks in Rajiv Jain’s 13F portfolio as of December 31, with the stocks being ranked according to their current dividend yield. To compile this list, we analyzed GQG Partners’ latest 13F filing with the SEC.
Note: All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q4 2021 reporting period.
Rajiv Jain’s GQG Partners Portfolio: 10 Dividend Stock Picks
10. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 67
GQG Partners’ Stake Value: $1,231,791,000
Dividend Yield as of March 14: 2.43%
The Procter & Gamble Company is an American multinational consumer goods company. It has been increasing its dividend for an impressive 65 years, with a five-year dividend CAGR of 5%. The dividend king currently pays a quarterly dividend of $0.8698 per share, with a dividend yield of 2.43% as of March 14.
The Procter & Gamble Company was one of the latest acquisitions of GQG Partners. The hedge fund started building a position in the company during Q4, amassing shares worth over $1.2 billion by the end of quarter, which accounted for 3.05% of Rajiv Jain’s portfolio. Along with PG, Microsoft Corporation, Alphabet Inc., and Johnson & Johnson were some other major blue-chip holdings of the hedge fund.
In January, Morgan Stanley raised its price target on The Procter & Gamble Company to $177, with an ‘Overweight’ rating on the shares, naming the stock as its favorite one in the Household Products category.
By the end of Q4 2021, 67 hedge funds tracked by Insider Monkey held stakes in The Procter & Gamble Company, down from 69 in the previous quarter. Those stakes were valued at over $6.6 billion on December 31. Besides GQG Partners, Bridgewater Associates was one of the company’s largest stakeholders in Q4, holding shares worth roughly $849 million.
9. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
GQG Partners’ Stake Value: $12,838,000
Dividend Yield as of March 14: 3.04%
An American multinational beverage corporation, The Coca-Cola Company (NYSE:KO) experienced positive hedge fund sentiment in Q4 2021. 70 hedge funds tracked by Insider Monkey reported owning stakes in the Georgia-based company as of the end of the fourth quarter, up from 61 in the previous quarter. The total value of those 70 stakes was over $28.6 billion.
On February 22, The Coca-Cola Company announced its 60th-consecutive annual dividend increase, to $1.76 per share, with a dividend yield of 3.04%, as recorded on March 14. Given that the company has continued to expand its business model, portfolio, and long-term outlook, Evercore ISI lifted its price target on The Coca-Cola Company to $70 in February, up from $63. The firm maintained an ‘Overweight’ rating on the shares.
GQG Partners started building its position in The Coca-Cola Company during the first quarter of 2018. In Q4 2021, the hedge fund slashed its position in the company by 9%, maintaining a stake worth $12.8 million. The company accounted for 0.03% of Rajiv Jain’s portfolio.
8. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 107
GQG Partners’ Stake Value: $806,728,000
Dividend Yield as of March 14: 3.10%
In Q4 2021, GQG Partners increased its stake in American investment bank JPMorgan Chase & Co. by 404%. The hedge fund held shares in the company worth over $806.7 million, which represented 2% of Rajiv Jain’s portfolio.
As per Insider Monkey’s Q4 data, the number of hedge funds holding stakes in JPMorgan Chase & Co. increased to 107 by the end of Q4, up from 101 at the end of Q3. The total value of those 107 stakes was roughly $6.6 billion. With shares worth nearly $1.2 billion, Fisher Asset Management was the most bullish JPM investor among those funds.
In 2021, JPMorgan Chase & Co. raised its quarterly dividend by 11.1% to $1.00 per share. The stock’s dividend yield, as of March 14, stood at 3.10%. The company holds an 11-year track record of consistent dividend growth. In January, UBS set a $197 price target on JPMorgan Chase & Co., while maintaining a ‘Buy’ rating on the shares.
Giverny Capital mentioned JPMorgan Chase & Co. in its Q4 2021 investor letter. Here is what the firm had to say:
“I sold some of our JP Morgan Chase in the fourth quarter, redeploying the proceeds and a bit of available cash into M&T Bank. JP Morgan is the nation’s best giant bank and I am optimistic about its future. GCAM still owns some. But M&T has a multi-decade record of excellent results, a strong balance sheet and conservative loan loss reserves. Importantly, it is extremely sensitive to rising interest rates.
JPMorgan Chase & Co. generates income from traditional bank lending, but also from trading, investment banking and wealth management. It is the nation’s largest credit card issuer and also does business with about 80% of the Fortune 500. M&T is more oriented to commercial real estate lending and could be a major beneficiary of higher interest rates, as it has a lot of excess cash on its balance sheet and a stable core deposit base. As rates rise, it will have plenty of ability to make loans. Alternatively, M&T could buy back a lot of stock with that surplus cash.”
7. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 80
GQG Partners’ Stake Value: $632,000
Dividend Yield as of March 14: 3.53%
Merck & Co., Inc., an American pharmaceutical company, is a Dividend Achiever, as the company has been increasing its dividends consistently for the past 11 years. In 2021, the company hiked its quarterly dividend by 6% to $0.69 per share. As of March 14, the stock’s dividend yield stands at 3.53%.
GQG Partners increased its stake in Merck & Co., Inc. by 54% in the fourth quarter of 2021, giving the fund shares worth $632,000 in the company. Along with presenting a positive outlook on Merck & Co., Inc. in January, JPMorgan set a $95 price target on the stock, with an ‘Overweight’ rating on the shares.
As of the end of Q4 2021, 80 hedge funds tracked by Insider Monkey reported owning stakes in Merck & Co., Inc., worth roughly $3.8 billion. In the previous quarter, 77 hedge funds held shares in the New Jersey-based company, valued at $4.5 billion.
Miller Howard Investments mentioned Merck & Co., Inc. in its Q3 2021 investor letter. Here is what the firm had to say:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) Merck (MRK). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”
6. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 82
GQG Partners’ Stake Value: $5,034,000
Dividend Yield as of March 14: 3.78%
In Q4 2021, Warren Buffett’s Berkshire Hathaway was the largest shareholder of American biopharmaceutical company AbbVie Inc. (NYSE:ABBV), holding shares worth roughly $411 million. Overall, 82 hedge funds tracked by Insider Monkey held $3.74 billion worth of stakes in the company at the end of Q4, up from 81 in the previous quarter.
In 2021, AbbVie Inc. increased its quarterly dividend by 9% at $1.41 per share. The stock’s current dividend yield stands at 3.78% as of March 14. Since its inception in 2013, the company has raised its dividend by 250%. In March, Citigroup raised its price target on AbbVie Inc. to $170, while maintaining a ‘Buy’ rating on the shares.
In Q4 2021, GQG Partners increased its position in AbbVie Inc. by 215%. The hedge fund held a position worth over $5 million in the company, which accounted for 0.01% of Rajiv Jain’s portfolio. Besides AbbVie Inc., Microsoft Corporation, Alphabet Inc., and Johnson & Johnson were among the other important holdings of GQG Partners in Q4 2021.
Miller Howard Investments mentioned AbbVie Inc. in its Q3 2021 investor letter. Here is what the firm had to say:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”
5. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Holders: 42
GQG Partners’ Stake Value: $1,132,984,000
Dividend Yield as of March 14: 3.96%
In February, British-Swedish pharmaceutical company AstraZeneca PLC (NASDAQ:AZN), was initiated with a ‘Buy’ rating by Stifel, with a 12,300 GBP price target. The firm predicts the company will be one of the fastest-growing big pharma companies, with a substantially positive growth rate over the next five years. AstraZeneca PLC currently pays a quarterly dividend of $1.97 per share. The stock’s dividend yield, as of March 14, stood at 3.96%.
At the end of Q4 2021, GQG Partners held shares worth over $1.1 billion in AstraZeneca PLC after increasing its position by 6% during the quarter. The company made up 2.8% of Rajiv Jain’s portfolio. By the end of Q4 2021, 42 hedge funds tracked by Insider Monkey held stakes in AstraZeneca PLC, up from 41 in the previous quarter. Those stakes were valued at nearly $4 billion.
4. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 71
GQG Partners’ Stake Value: $1,982,114,000
Dividend Yield as of March 14: 4.15%
GQG Partners first invested in Exxon Mobil Corporation (NYSE:XOM) during the second quarter of 2018 but soon unloaded its investment in the company. In the second quarter of 2021, the hedge fund again started building its position in XOM, buying shares worth roughly $900 million. By the end of Q4 2021, GQG Partners held shares in Exxon Mobil Corporation valued at $2 billion, which made it the fourth-largest holding of the hedge fund.
Of the 927 elite funds tracked by Insider Monkey which filed 13Fs for the December quarter, 71 of them held stakes in Exxon Mobil Corporation on December 31, which were collectively valued at $5.3 billion. In comparison, 64 hedge funds held positions in the company in the preceding quarter, with stakes worth over $4.6 billion.
Exxon Mobil Corporation pays a quarterly dividend of $0.88 per share, with a dividend yield of 4.15%. Over the past 39 years, the company has raised its dividend at an annual average rate of 6%. Appreciating the company’s strong production outlook, Barclays raised its price target on Exxon Mobil Corporation to $98 on March 9, with an ‘Overweight’ rating on the shares.
Saturna Capital mentioned Exxon Mobil Corporation in its Q4 2021 investor letter. Here is what the firm had to say:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
3. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 47
GQG Partners’ Stake Value: $1,368,162,000
Dividend Yield as of March 14: 5.63%
Philip Morris International Inc. (NYSE:PM), a Swiss-American tobacco manufacturing company, has been consistently raising its dividend since its inception in 2008. Since then, it has increased its dividend by 171.7%. The company pays a quarterly dividend of $1.25 per share, with a dividend yield of 5.63%, as of March 14. In February, UBS predicted growth in Philip Morris International Inc.’s (NYSE:PM) organic sales, raising its price target on the stock to $110 while maintaining a ‘Neutral’ rating on the shares.
At the end of Q4 2021, 47 hedge funds tracked by Insider Monkey held stakes in Philip Morris International Inc., down from 48 in the preceding quarter. Those stakes held a consolidated value of $6.2 billion as of December 31. Holding PM shares worth nearly $2 billion, Fundsmith LLP was the company’s leading shareholder in Q4 among those funds. In Q4 2021, GQG Partners held shares in Philip Morris International Inc. worth over $1.3 billion, which accounted for 3.39% of Rajiv Jain’s portfolio.
Broyhill Asset Management mentioned Philip Morris International Inc. in its Q2 2021 investor letter. Here is what the firm had to say:
“Philip Morris (PM) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 23%. We shared our thoughts on these regulations during the quarter, which are available here.
‘PM Valuation. PM is up ~ 15% YTD and would have the most to gain under a nicotine cap. A cap would likely accelerate conversion to iQOS, which is 100% incremental for PM (PM also has zero exposure to combustible cigarettes in the U.S. and licenses its IQOS product for MO to distribute domestically). As such, the decline in PM was much more muted, with the stock hitting new 52 week highs a day after the Biden headline, driven by yesterday’s earnings release. It didn’t take long for investors to shift their attention back to fundamentals and the fundamentals here are best in class. In short, results beat estimates across the board (a recurring theme here), and management raised guidance for the full year (another recurring theme). IQOS continued to deliver impressive growth, recording continued market share gains on the heels of continued user acquisition growth, up 1.5M to 19.1M total users. Importantly, IQOS now represents nearly 30% of PM net revenues (management expects “smoke-free” products to represent more than half of their business by 2025, which should make the ESG folks happy), which is driving top-line growth and margin expansion. Hard to believe that they have created a product with higher margins than combustible cigarettes!! We expect PM operating margins to increase by 100bps – 200bps annually as IQOS continues to gain share. The stock trades at ~ 15x today or 2/3 of the market’s multiple for a business likely to generate $35B in cash flow – or 25% of the market cap – in just the next three years. Over the last decade, shares have traded at an average multiple of 18x and within a range of ~ 14x – 22x (+/-1 standard deviation). The stock yields 5.1% at the current price, and we expect management to resume share purchases in the back half of this year.’”
2. Enbridge Inc. (NYSE:ENB)
Number of Hedge Fund Holders: 21
GQG Partners’ Stake Value: $380,238,000
Dividend Yield as of March 14: 6.08%
Enbridge Inc. (NYSE:ENB), a Canadian pipeline company, was one of the new holdings of GQG Partners in Q4 2021. The hedge fund started building a position in the company during the quarter, ending the period with over $380 million worth of ENB shares, which constituted 0.94% of Rajiv Jain’s portfolio. By the end of Q4 2021, the number of hedge funds tracked by Insider Monkey holding stakes in Enbridge Inc. declined to 21, from 24 in the previous quarter. Those stakes held a value of $550.2 million.
In December 2021, Enbridge Inc. announced a 3% increase in its quarterly dividend to $0.86 per share. The stock’s dividend yield, as of March 14, stood at a solid 6.08%. Enbridge Inc. has been paying dividends to shareholders for the past 67 years, while maintaining a 27-year track record of consistent dividend growth. Moreover, during the past 27 years, the stock’s dividend CAGR stands at 10%. In February, BMO Capital raised its price target on Enbridge Inc. to C$59, with an ‘Outperform’ rating on the shares.
ClearBriedge Investments mentioned Enbridge Inc. in its Q3 2021 investor letter. Here is what the firm had to say:
“We are meaningfully overweight energy, particularly within North American energy infrastructure. Enbridge and Williams, our two infrastructure holdings, possess crown jewel infrastructure assets. They each deliver meaningful proportions of the overall energy produced and consumed in North America. Their revenues are backed by long-term contracts with high-quality counterparties and have little direct commodity price exposure. Their growth has been driven by the increasing production of North American energy. The advent of unconventional oil and gas production (oil sand and shale) has made North America a low-cost competitor on a global basis. We expect strong North American production to be an enduring feature of global energy supply for decades to come.”
1. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 39
GQG Partners’ Stake Value: $434,956,000
Dividend Yield as of March 14: 7.13%
Altria Group, Inc. (NYSE:MO), a London-based tobacco company, pays a quarterly dividend of $0.90 per share, with a dividend yield of 7.13%, as recorded on March 14. In the past 52 years, the company has raised its dividend 56 times. This January, JPMorgan raised its price target on Altria Group, Inc. to $51, while keeping an ‘Equal Weight’ rating on the shares.
In Q4 2021, GQG Partners increased its position in the company by 47,902%, building a stake worth $435 million. The company represented 1.07% of Rajiv Jain’s portfolio. As of the end of Q4, 39 hedge funds tracked by Insider Monkey reported owning stakes in Altria Group, Inc., down from 45 in the previous quarter. Those stakes held a consolidated value of over $1.05 billion.
Broyhill Asset Management also mentioned Altria Group, Inc. in its Q2 2021 investor letter. Here is what the firm had to say:
“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
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This article is originally published at Insider Monkey.
