Value Investor Joel Greenblatt’s Top 5 Dividend Picks

In this article, we will discuss value investor Joel Greenblatt’s top 5 dividend picks. If you want to read our detailed analysis of Greenblatt’s investment philosophy and his hedge fund’s performance over the years, go directly to read Value Investor Joel Greenblatt’s Top 12 Dividend Picks. 

5. Accenture plc (NYSE:ACN)

Gotham Asset Management’s Stake Value: $16.5 million
Dividend Yield as of February 15: 1.58%

Accenture plc (NYSE:ACN) is an Irish-American information technology company that deals in related services and consulting. On December 16, the company announced a quarterly dividend of $1.12 per share, which was in line with its previous dividend. The company has been raising its dividends consistently for the past 17 years. Its shares have a yield of 1.58%, as of February 15.

In Q4 2022, Gotham Asset Management owned nearly 62,000 shares in Accenture plc (NYSE:ACN), worth over $16.5 million. The company represented 0.46% of value investor Joel Greenblatt’s portfolio.

In January, Wells Fargo initiated its coverage of Accenture plc (NYSE:ACN) with an Equal Weight rating and a $289 price target, presenting a positive view of the company’s platform and services.

At the end of Q3 2022, 58 hedge funds in Insider Monkey’s database owned stakes in Accenture plc (NYSE:ACN), down from 61 in the previous quarter. The collective value of these stakes is over $3.47 billion.

Distillate Capital Partners LLC mentioned Accenture plc (NYSE:ACN) in its third-quarter 2022 investor letter. Here is what the firm has to say:

“The largest new purchases includes Accenture plc (NYSE:ACN). Accenture modestly lagged the market last quarter and became similarly attractive enough to warrant ownership. Similar to our prior presentations, one way to visualize the current portfolio and note recent changes versus the benchmark is to look at scatter plot of all of Distillate’s FSV holdings versus those in the benchmark with valuation on the vertical axis and free cash ϲow stability on the horizontal axis.”

4. Cisco Systems, Inc. (NASDAQ:CSCO)

Gotham Asset Management’s Stake Value: $16.8 million
Dividend Yield as of February 15: 3.20%

Cisco Systems, Inc. (NASDAQ:CSCO) is an American multinational digital communications and software company, headquartered in California. The company is one of the top dividend stocks of value investor Joel Greenblatt as his hedge fund owned CSCO stakes worth nearly $16.8 million in Q4 2022. The company made up 0.47% of Gotham Asset Management’s portfolio.

Cisco Systems, Inc. (NASDAQ:CSCO) currently offers a quarterly dividend of $0.38 per share and has a dividend yield of 3.20%, as of February 15. In 2022, the company raised its payout for the 11th consecutive year.

In February, Evercore ISI added Cisco Systems, Inc. (NASDAQ:CSCO) to its “Tactical Outperform” list as the firm sees an upside potential in the company’s performance. The firm maintained an Outperform rating with a $58 price target on the stock.

Cisco Systems, Inc. (NASDAQ:CSCO) was a part of 68 hedge fund portfolios in Q3 2022, compared with 63 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a total value of over $2.78 billion. Among these hedge funds, Two Sigma Advisors was the company’s leading stakeholder.

Carillon Tower Advisers mentioned Cisco Systems, Inc. (NASDAQ:CSCO) in its Q1 2022 investor letter. Here is what the firm has to say:

“Cisco Systems (NASDAQ:CSCO) traded lower as investors weighed how supply chain concerns would impact sales growth. The company has been upgrading its switching and routing offerings, which should lead to strong demand as on-site locations upgrade infrastructure.”

3. Merck & Co., Inc. (NYSE:MRK)

Gotham Asset Management’s Stake Value: $19.4 million
Dividend Yield as of February 15: 2.70%

An American multinational pharmaceutical company, Merck & Co., Inc. (NYSE:MRK) is next on our list of top dividend stocks in value investor Joel Greenblatt’s portfolio. In Q4 2022, Gotham Asset Management owned MRK stakes worth over $19.4 million, which represented 0.54% of its 13F portfolio.

Credit Suisse raised its price target on Merck & Co., Inc. (NYSE:MRK) to $125 with an Outperform rating on the shares, appreciating the company’s ongoing research on its drugs.

On January 24, Merck & Co., Inc. (NYSE:MRK) announced a quarterly dividend of $0.73 per share, which was in line with its previous dividend. The company maintains a 12-year streak of consistent dividend growth and has a dividend yield of 2.70%, as of February 15.

At the end of Q3 2022, 82 hedge funds tracked by Insider Monkey presented a bullish stance on Merck & Co., Inc. (NYSE:MRK), up from 79 in the previous quarter. The stakes owned by these hedge funds have a total value of over $4.7 billion.

Baron Funds mentioned Merck & Co., Inc. (NYSE:MRK) in its Q4 2022 investor letter. Here is what the firm has to say:

“Merck & Co., Inc. (NYSE:MRK) is a large-cap pharmaceutical company with a deep heritage in drug discovery. Share gains were led by the continued growth of key asset Keytruda, the leading immune oncology agent used to treat a variety of cancers. Shares also benefited from increased investor interest as Merck proves its ability to scale its Gardasil vaccine that had previously been constrained by supply issues. We retain long-term conviction, as we expect Keytruda to solidify its position as the best-selling biopharmaceutical drug of all time.”

2. Apple Inc. (NASDAQ:AAPL)

Gotham Asset Management’s Stake Value: $46.7 million
Dividend Yield as of February 15: 0.60%

Apple Inc. (NASDAQ:AAPL) ranks second on our list of top dividend stocks according to value investor Joel Greenblatt. On February 2, the company declared a quarterly dividend of $0.23 per share, which was consistent with its previous dividend. The company maintains a 9-year streak of consistent dividend growth. The stock’s dividend yield on February 15 came in at 0.60%.

In the fourth quarter of 2022, Gotham Asset Management increased its position in Apple Inc. (NASDAQ:AAPL) by 4% and owned a $46.7 million stake. The company made up 1.31% of the firm’s 13F portfolio. The hedge fund has been investing in the company since Q2 of 2011.

In Q3 2022, 140 hedge funds in Insider Monkey’s database owned stakes in Apple Inc. (NASDAQ:AAPL), up from 128 in the preceding quarter. These stakes are valued at over $144 billion.

Distillate Capital mentioned Apple Inc. (NASDAQ:AAPL) in its Q4 2022 investor letter. Here is what the firm has to say:

“The largest new purchase was Apple Inc. (NASDAQ:AAPL), which after underperforming saw its valuation improve significantly. Over the course of the last year, Apple’s consensus estimated forward free cash flows rose modestly, while its enterprise value fell by around 30%. Apple ranks below the 25th most attractive name in the portfolio and so its weight is capped at 4% vs. 6% for names in the top quartile.”

1. Microsoft Corporation (NASDAQ:MSFT)

Gotham Asset Management’s Stake Value: $50 million
Dividend Yield as of February 15: 1.01%

Microsoft Corporation (NASDAQ:MSFT) was the fifth-largest holding of Gotham Asset Management in the fourth quarter of 2022. The hedge fund increased its position in the company by 4%, which took its total MSFT stake to over $50 million. The company represented 1.4% of value investor Joel Greenblatt’s portfolio.

Microsoft Corporation (NASDAQ:MSFT) pays a quarterly dividend of $0.68 per share for a dividend yield of 1.01%, as of February 15. The company holds a 16-year track record of consistent dividend growth.

Microsoft Corporation (NASDAQ:MSFT) was the most popular stock among hedge funds in Q3 2022, as 269 funds in Insider Monkey’s database owned stakes in the company, compared with 258 in the previous quarter. The consolidated value of these stakes is over $61 billion.

Polen Capital mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q4 2022 investor letter. Here is what the firm has to say:

“In the case of Microsoft Corporation (NASDAQ:MSFT), the company is performing very well. Azure now represents nearly 25% of the total business and continues to compound at a higher rate. Although growth is moderating a bit recently (as it is for AWS and Google Cloud Platform as well), these three platforms collectively generated more than $140 billion in revenue during the last 12 months and are still growing at a healthy rate. Further, Microsoft Cloud, or commercial cloud (which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other cloud properties) continues to grow roughly 30% and is now about half the business. Mathematically, commercial cloud could decelerate to 20% growth with all other segments decelerating to zero growth and total company revenue growth would still be at least double digits. We believe Microsoft is positioned to compound underlying earnings per share at a midteens rate over the next five years. At 22x earnings, we felt the valuation was attractive and that it should be a large position.”

You can also take a look at 12 Best S&P 500 Dividend Stocks To Buy and 12 Cheap Biotech Stocks To Buy

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