10 Best Dividend Stocks To Buy According To Kahn Brothers
In this article, we discuss the 10 best dividend stocks to buy according to Kahn Brothers. You can skip our detailed analysis of the hedge fund’s investment philosophy and go straight to reading The 5 best dividend stocks to buy according to Kahn Brothers.
Kahn Brothers Group, an investment management firm, was founded by Irving Kahn, Thomas Graham Kahn and Alan Kahn in 1978. Irving Kahn, who died in 2015, began his investing career after the stock market crash of 1929.
Kahn Brothers provides investment management and brokerage services to its clients, particularly those who have been associated with the fund for a long time. Over the years, Kahn Brothers has evolved its investment strategy from traditional value investing to a refocusing on margin of safety for long-term investments. Through this shift, the hedge fund aims to generate superior returns for shareholders, while limiting the associated risks.
In the fourth quarter of 2021, the value of Kahn Brothers’ 13F portfolio increased to $741 million, from $710 million in the prior quarter. The hedge fund invests heavily in the healthcare, financials and basic materials sectors. The fund’s portfolio was concentrated in just 43 stocks, with the top five companies accounting for 45% of the portfolio. Some of the fund’s top holdings include Berkshire Hathaway Inc. (NYSE: BRK-A), PepsiCo, Inc. (NASDAQ: PEP) and Pfizer Inc. (NYSE: PFE).
Our Methodology:
In this article, we discuss the best dividend-paying stocks in Kahn Brothers’ portfolio. For this list, we considered Kahn Brothers’ Q4 13F portfolio.
The best dividend stocks to buy according to Kahn Brothers
10. PepsiCo, Inc. (NASDAQ:DYNAMISM)
Number of hedge fund holders: 60
Value of the Kahn brothers’ participation: $330,000
Dividend yield as of February 22: 2.56%
On February 10, PepsiCo, Inc. (NASDAQ: PEP) announced a 7% increase in its annualized dividend to $4.60 per share. The share’s dividend yield was 2.56% as of February 22. PepsiCo, Inc. (NASDAQ: PEP) is maintaining a 49-year streak of consecutive dividend growth, increasing it at a CAGR of 9% from 2013 to 2021.
As of Q4 2021, Kahn Brothers had a $330,000 stake in PepsiCo, Inc. (NASDAQ: PEP), which represented 0.04% of its portfolio. The hedge fund did not change its position in the company during the quarter. As consumer demand remained strong in 2021, in February Morgan Stanley and JPMorgan raised their price targets on PepsiCo, Inc. (NASDAQ:PEP) to $188 and $185, respectively.
At the end of the fourth quarter of 2021, 60 hedge funds tracked by Insider Monkey reported holding stakes in PepsiCo, Inc. (NASDAQ:PEP), up from 61 in the prior quarter. The total value of these holdings is over $4.6 billion. Fundsmith LLP was the company’s largest shareholder in the fourth quarter, holding shares worth $1.8 billion.
Like PepsiCo, Inc. (NASDAQ:PEP), Berkshire Hathaway Inc. (NYSE:BRK-A) and Pfizer Inc. (NYSE:PFE) are also among the hedge fund’s top holdings in the fourth quarter.
9. Bristol-Myers Squibb Company (NYSE:BMY)
Number of hedge fund holders: 66
Value of the Kahn brothers’ stake: $57,461,000
Dividend yield as of February 22: 3.21%
Bristol-Myers Squibb Company (NYSE:BMY), a US pharmaceutical company, has seen a drop in the number of hedge funds holding stakes in it. In Q4 2021, 66 hedge funds tracked by Insider Monkey held stakes in the company, down significantly from 74 in the previous quarter. These holdings are valued at more than $3.3 billion.
In Q4 2021, Kahn Brothers increased its position in Bristol-Myers Squibb Company (NYSE: BMY) by 6% and held shares worth more than $57.4 million. The company represented 7.89% of the hedge fund’s portfolio. Last January, JPMorgan raised its price target on Bristol-Myers Squibb Company (NYSE:BMY) to $80, while maintaining an overweight rating on stocks.
Bristol-Myers Squibb Company (NYSE: BMY) has been raising its dividend for 15 years. Currently, the company pays a quarterly dividend of $0.54 per share, increasing it by 10% in December 2021. The stock’s current dividend yield is recorded at 3.21%.
8. Pfizer Inc. (NYSE: PFE)
Number of hedge fund holders: 83
Value of the Kahn brothers’ stake: $60,108,000
Dividend yield as of February 22: 3.34%
In Q4 2021, Kahn Brothers held a $60.1 million stake in Pfizer Inc. (NYSE: PFE), after increasing its position in the company by 4%. It made up 8.25% of the hedge fund’s 13F portfolio and is the fund’s fourth-largest holding in the fourth quarter.
In December 2021, Pfizer Inc. (NYSE: PFE) increased its quarterly dividend by 2.6% to $0.40 per share. The share’s dividend yield was 3.34% as of February 22. Pfizer Inc. (NYSE: PFE) has an 11-year history of consistent dividend growth. In January, JPMorgan raised its price target on Pfizer Inc. (NYSE:PFE) to $57, with a neutral rating on the stock, expecting growth in the company’s Covid-related sales.
The number of hedge funds tracked by Insider Monkey with stakes in Pfizer Inc. (NYSE: PFE) increased significantly to 83 in the fourth quarter of 2021, from 74 in the previous quarter. The total value of these holdings is over $5 billion, which is a considerable growth from the $2.6 billion in holdings held by hedge funds in the previous quarter.
In its letter to investors for the third quarter of 2021, Capital of Saturn mentioned Pfizer Inc. (NYSE:PFE) among other stocks. Right here does the company have to say:
“The Fund’s best performer during the quarter was pharmaceuticals maker Pfizer. The company has submitted trial data to the FDA for the use of its COVID-19 vaccine for young children, and the FDA is widely expected to approve it. Health authorities have also begun recommending booster shots of the Pfizer vaccine for certain populations, further increasing demand for vaccinations.
7. Merck & Co., Inc. (NYSE: MRK)
Number of hedge fund holders: 80
Value of the Kahn brothers’ stake: $54,354,000
Dividend yield as of February 22: 3.63%
Merck & Co., Inc. (NYSE: MRK), an American multinational pharmaceutical company, currently pays a quarterly dividend of $0.69 per share, increasing it by 6% in 2021. Merck & Co., Inc. (NYSE: MRK) has increased its dividend for 11 years, entering the category of Dividend Achievers. Additionally, the company’s 5-year dividend CAGR is 8.2%.
At the end of the fourth quarter of 2021, 80 hedge funds tracked by Insider Monkey were bullish on Merck & Co., Inc. (NYSE: MRK), up from 77 in the prior quarter. These interests have a consolidated value of approximately $3.8 billion. Of those hedge funds, Fisher Asset Management held the largest stake in the company in the fourth quarter, valued at $874.4 million.
Kahn Brothers had a stake of more than $54.3 million in Merck & Co., Inc. (NYSE: MRK) in the fourth quarter, which represented 7.46% of the hedge fund’s portfolio. Back in January, JPMorgan offered a positive outlook on Merck & Co., Inc. (NYSE: MRK) and set a price target of $95 for the stock, while maintaining an overweight rating on the stock.
Miller Howard Investments mentioned Merck & Co., Inc. (NYSE: MRK) in its letter to investors for the third quarter of 2021. Right here does the company have to say:
“While we are optimistic about a recovery, we continue to balance our cyclical holdings with those that pay dividends in stable and less economically sensitive sectors. We own three pharmaceutical companies, (which includes) Merck (MRK). All three have strong cash flows and balance sheets, which makes their high dividends reasonably safe. The investment controversy surrounding these pharmaceutical companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations of these stocks reflect what we believe is excessive pessimism on the part of investors about the prospects for new drugs. »
6. Provident Financial Services, Inc. (NYSE:PFS)
Number of hedge fund holders: 8
Value of the Kahn brothers’ stake: $665,000
Dividend yield as of February 22: 4.05%
Provident Financial Services, Inc. (NYSE: PFS) is an American bank holding company that provides related services to its consumers in the United States. Kahn Brothers began investing in the company during the third quarter of 2020, with shares worth over $335 million. As of Q4 2021, the hedge fund held a stake worth $665,000 in the company, which represented 0.09% of its 13F portfolio. Along with that, Berkshire Hathaway Inc. (NYSE:BRK-A), PepsiCo, Inc. (NASDAQ:PEP) and Pfizer Inc. (NYSE:PFE) are some of Kahn Brothers’ top holdings in the fourth quarter.
On October 29, Provident Financial Services, Inc. (NYSE: PFS) announced a 4.3% growth in its quarterly dividend to $0.24 per share. Over the past year, Provident Financial Services, Inc. (NYSE: PFS) has returned 17.4% to its shareholders, as of the February 22 close.
At the end of Q4 2021, 8 hedge funds tracked by Insider Monkey reported holding stakes in Provident Financial Services, Inc. (NYSE: PFS), up from 5 in the prior quarter. The consolidated value of these interests exceeds $8 million. Renaissance Technologies was the company’s largest shareholder in the fourth quarter, holding shares worth more than $5 million.
Click to read on and see 5 best dividend stocks to buy according to Kahn Brothers.
Suggested items:
Disclosure. Any. 10 Best Dividend Stocks To Buy According To Kahn Brothers is originally published on Insider Monkey.