In this article, we discuss 10 dividend stocks to buy according to James Katz’s Humankind Investments. You can skip our detailed analysis of the hedge fund’s past performance and latest developments, and go directly to read Top 5 Dividend Stocks to Buy According to James Katz’s Humankind Investments.
Humankind Investments is a quantitative asset management firm that specializes in socially responsible investments. The hedge fund invests in companies that positively influence the fund’s policy and offer profitable returns for shareholders. James Katz is currently serving as the chief investment officer of the firm and has substantial experience working in the ETF industry.
In one of his interviews with TD Ameritrade Network, Katz mentioned that investors should focus on ESG-centric companies and a quantitative approach to ESG investing provides a better measure of societal impact. He further elaborated that the performance of healthcare companies like Pfizer Inc. (NYSE:PFE) and Johnson & Johnson (NYSE:JNJ) was instrumental in bringing the vaccines during the pandemic, due to their biomedical research. Similarly, search engines like Google provide valuable information to their users for free. This is where his hedge fund’s main focus lies.
Humankind Investments’ first exchange-traded fund, the Humankind US Stock ETF, reached over $111 million in assets under management in 2021 and gained 16.88% since its inception in February 2021. The fund selects securities that benefit humankind and create value for investors, customers, and general members of society. It further aims to involve and engage companies to improve their overall impact on humanity. At the end of 2021, the fund released its first annual benefit report, highlighting its accomplishment of the public benefit mission.
As of the end of Q1 2022, Humankind Investments holds a 13F portfolio valued at about $244.4 million, down from $248.2 million in the previous quarter. Some of the firm’s major holdings include Pfizer Inc. (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and Alphabet Inc. (NASDAQ:GOOG).
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Our Methodology:
In this article, we discuss 10 dividend stocks in James Katz’s portfolio. We picked these stocks from the Q1 portfolio of Humankind Investments.
Top 10 Dividend Stocks to Buy According to James Katz’s Humankind Investments
10. Deere & Company (NYSE:DE)
Dividend Yield as of June 28: 1.43%
Humankind Investments’ Stake Value: $1,767,000
Deere & Company (NYSE:DE) is an American manufacturing company that specializes in agricultural machinery, heavy equipment, and forestry machinery. In June, the company announced moving its tractor cab production to Mexico from Iowa due to a tight labor market that has raised costs for domestic manufacturers.
Humankind Investments opened its position in Deere & Company (NYSE:DE) during the first quarter of 2021, with shares worth over $1.8 million. During Q1 2022, the hedge fund reduced its stake in the company by 3%, owning a total stake worth over $1.7 million. The company represented 0.72% of James Katz’s portfolio.
Deere & Company (NYSE:DE) has a very long track record of dividend payments, offering quarterly payouts consecutively since 1990. In the past five years, the company has raised its dividend at a CAGR of 11%. It currently pays a quarterly dividend of $1.13 per share, raising it by 8% in May. The stock’s dividend yield came in at 1.43%, as of June 28. In June, Cowen initiated its coverage of Deere & Company (NYSE:DE) with a Market Perform rating and a $396 price target, appreciating the company’s strong agricultural business.
As per Insider Monkey’s Q1 2022 database, 66 hedge funds were bullish on Deere & Company (NYSE:DE), up from 61 in the previous quarter. The collective value of these stakes is over $2 billion. Bill & Melinda Gates Foundation Trust was one of the company’s prominent shareholders in Q1.
Just like Pfizer Inc. (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and Alphabet Inc. (NASDAQ:GOOG), Deere & Company (NYSE:DE) is one of the notable holdings of Humankind Investments.
ClearBridge Investments mentioned Deere & Company (NYSE:DE) in its Q1 2022 investor letter. Here is what the firm has to say:
“Industrials holding Deere (NYSE:DE) was also a strong contributor to performance during the quarter. Through its unmatched 5,000 dealer network across 160 countries, Deere is a major global player in agricultural, construction and forestry equipment, with a particularly dominant position in U.S. agriculture. Deere’s moat around its core equipment capabilities, coupled with years of substantial investments in technology and innovation, further extends its competitive advantage into precision agriculture, which allows for higher farm yields with lower use of fertilizers, pesticides and water, thereby improving farmers’ bottom lines while reducing their environmental footprint. In addition to drought conditions in Latin America, the war between Russia and Ukraine, two major exporters of corn and wheat, is further disrupting the global agricultural commodities market and pushing prices even higher. This should mean higher farmer revenues and greater demand for Deere’s equipment, which is further supported by some of the lowest levels of inventory of new and used equipment on record.”
9. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of June 28: 2.56%
Humankind Investments’ Stake Value: $1,898,000
The Procter & Gamble Company (NYSE:PG) is an Ohio-based consumer goods company that deals in a wide range of personal care and hygiene products.
According to Insider Monkey’s Q1 database, The Procter & Gamble Company (NYSE:PG) was a popular buy among elite funds, as 72 hedge funds owned stakes in the company, up from 67 a quarter earlier. These stakes hold a collective value of over $6 billion.
The Procter & Gamble Company (NYSE:PG) has raised its dividend consistently for the past 66 years, falling into the category of Dividend Champions. On April 12, the company announced a quarterly dividend of $0.9133 per share, up 5% from the previous dividend. Deutsche Bank lowered its price target on The Procter & Gamble Company (NYSE:PG) in June to $171 but kept a Buy rating on the shares, as the stock outperformed the broader market in the past year, gaining 4.86% as of June 28.
At the end of Q1 2022, Humankind Investments owned 12,419 PG shares, valued at roughly $1.9 million. The company made up 0.77% of James Katz’s portfolio.
8. HCA Healthcare, Inc. (NYSE:HCA)
Dividend Yield as of June 28: 1.24%
Humankind Investments’ Stake Value: $1,919,000
HCA Healthcare, Inc. (NYSE:HCA) provides healthcare services to consumers, owning hundreds of hospitals and clinics across the US. The company plans to collaborate with McKesson to create a fully integrated oncology research organization to improve cancer treatment options for patients.
HumanKind Investments started investing in HCA Healthcare, Inc. (NYSE:HCA) during the first quarter of 2021, purchasing shares worth $868,000. During Q1 2022, the hedge fund increased its position in the company by 1%, taking its total stake to nearly $200 million. The company accounted for 0.78% of James Katz’s portfolio. In June, Loop Capital initiated its coverage of HCA Healthcare, Inc. (NYSE:HCA) with a Buy rating and a $240 price target, expecting nearly 3% growth in the company’s volume and higher revenues in the upcoming quarters.
First Eagle Investment Management mentioned HCA Healthcare, Inc. (NYSE:HCA) in its Q3 2021 investor letter. Here is what the firm has to say:
“HCA Healthcare owns and operates 185 hospitals and approximately 2,000 sites of care in the US and UK. Admissions to its facilities, depressed during the worst of the Covid-19 outbreak in 2020, have begun to rebound. HCA reported a nearly 20% year-over-year increase in admissions during the second quarter and a 14% increase in revenue, and forecast that volume would continue to improve throughout the year. We maintain our positive opinion of the company’s management team, believing them to be effective stewards of both the balance sheet and HCA’s business operations.”
7. American Water Works Company, Inc. (NYSE:AWK)
Dividend Yield as of June 28: 1.77%
Humankind Investments’ Stake Value: $2,046,000
American Water Works Company, Inc. (NYSE:AWK) is a New Jersey-based public utility company that provides water and wastewater services in the US.
During Q1 2022, Humankind Investments purchased additional 2,229 AWK shares, boosting its position in the company by 22%. The hedge fund owned 12,361 shares in American Water Works Company, Inc. (NYSE:AWK) at the end of March 2022, valued at over $2 million. The company represented 0.83% of James Katz’s portfolio.
On April 27, American Water Works Company, Inc. (NYSE:AWK) raised its quarterly dividend for the 14th consecutive year to $0.655 per share. The stock’s dividend yield was recorded at 1.77% on June 28. Janney Montgomery upgraded American Water Works Company, Inc. (NYSE:AWK) to Buy from Neutral, presenting a positive outlook on the company’s operations.
At the end of March 2022, 33 hedge funds in Insider Monkey’s database owned stakes in American Water Works Company, Inc. (NYSE:AWK), compared with 31 a quarter earlier. These stakes are valued at over $1.12 billion. Among these hedge funds, Impax Asset Management was the company’s leading shareholder in Q1.
6. Pfizer Inc. (NYSE:PFE)
Dividend Yield as of June 28: 3.11%
Humankind Investments’ Stake Value: $2,167,000
Pfizer Inc. (NYSE:PFE) is a leading pharmaceutical and biotech company based in New York. At the end of Q1 2022, Humankind Investments owned 41,859 PFE shares, valued at over $2.1 million. The hedge fund increased its position in the company by 10% during the quarter, which accounted for 0.88% of James Katz’s portfolio.
On April 20, Pfizer Inc. (NYSE:PFE) announced a quarterly dividend of $0.20 per share, consistent with its previous dividend. The company’s dividend is safe as it has been paying dividends consistently for the past 334 quarters while holding a 12-year track record of dividend growth. The company’s payout ratio stands at 28% and its yield came in at 3.11%, as of June 28. During Q1 2022, Pfizer Inc. (NYSE:PFE) paid over $2.2 billion to shareholders in dividends.
In June, Piper Sandler raised its price target on Pfizer Inc. (NYSE:PFE) to $87, with an Overweight rating on the shares, appreciating the company’s strong vaccine revenues.
At the end of Q1 2022, 79 hedge funds in Insider Monkey’s database owned stakes in Pfizer Inc. (NYSE:PFE), declining from 83 in the previous quarter. The collective value of these stakes is over $4.1 billion, compared with $5 billion worth of stakes owned by hedge funds in Q4 2021.
Just like Johnson & Johnson (NYSE:JNJ) and Alphabet Inc. (NASDAQ:GOOG), Pfizer Inc. (NYSE:PFE) is also gaining ground among analysts and investors.
ClearBridge Investments mentioned Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter. Here is what the firm has to say:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.
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Disclosure. None. Top 10 Dividend Stocks to Buy According to James Katz’s Humankind Investments is originally published on Insider Monkey.
