Madison Investments, an investment advisor, released its “Madison Dividend Income Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, the fund (Class I) appreciated -1.7% and outperformed the -2.0% and -1.8% returns for the Russell 1000 Value, and Lipper Equity Income peer group and compared to the S&P 500’s +2.4% return. For the full year, the fund returned +7.7% compared to +14.4%, +14.1% and +25.0% returns for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Madison Dividend Income Fund emphasized stocks such as Rockwell Automation, Inc. (NYSE:ROK). Rockwell Automation, Inc. (NYSE:ROK) offers industrial automation, and digital transformation solutions. The one-month return of Rockwell Automation, Inc. (NYSE:ROK) was 2.72%, and its shares gained 5.25% of their value over the last 52 weeks. On February 14, 2025, Rockwell Automation, Inc. (NYSE:ROK) stock closed at $294.40 per share with a market capitalization of $33.289 billion.
Madison Dividend Income Fund stated the following regarding Rockwell Automation, Inc. (NYSE:ROK) in its Q4 2024 investor letter:
“This quarter we want to highlight two new relative yield investments made during the quarter. The Fund purchased Rockwell Automation, Inc. (NYSE:ROK) as a new Industrial holding. ROK is a high-quality global industrial automation equipment and services company. We believe it has a sustainable competitive advantage due to its large installed base of mission-critical automation equipment, high customer switching costs, strong brand reputation, and intangible assets.
ROK experienced a cyclical downturn in orders, revenues, and earnings in 2024 that created an opportunity to purchase stock at an attractive valuation. As shown in the graph below, ROK had a relative dividend yield of 1.4x the S&P 500 at the time of purchase, which was its highest relative yield since the 2008-2009 financial crisis. Company orders appear set to trough throughout 2025 and long-term demand for automation products should grow faster than GDP, driven by favorable secular trends including U.S. reshoring and supply chain de-risking. ROK has an A-rated balance sheet by Standard & Poor’s and has raised its dividend an average of 5% over the past five years. We expect continued dividend increases going forward.”
A technician in a factory setting next to an industrial automation machine.
Rockwell Automation, Inc. (NYSE:ROK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Rockwell Automation, Inc. (NYSE:ROK) at the end of the third quarter which was 33 in the previous quarter. While we acknowledge the potential of Rockwell Automation, Inc. (NYSE:ROK) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article we discussed Rockwell Automation, Inc. (NYSE:ROK) and shared the list of Large–Cap Stocks Insiders Are Selling Recently. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.