Summary
- Hedge funds employ some of the world's brightest analysts, with the most resources for analyzing companies.
- Lists of the most widely owned blue-chips among hedge funds can be a good source of new investing ideas.
- Here are the 15 most widely owned dividend blue-chips among hedge funds.
- Of these eight have strong enough long-term return potentials to be worth owning.
- Of those five are reasonable to very strong buys today, offering great short and long-term return potentials, along with attractive and safe to very safe yields.
This article was published on Dividend Kings on Monday, February 6th, 2023.
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Wall Street is home to some of the world's best-paid analysts, backed up by multi-million dollar salaries, an army of quantitative analysts, and the most powerful supercomputers.
Rocket scientist PhDs from Stanford, Princeton, and MIT sometimes program their machine trading algorithms.
Does that mean their recommendations are fantastic? No. But lists of the most popular stocks among hedge funds can serve as a useful source of ideas for further research.
I recently found this article on Yahoo Finance, which highlighted the 15 most popular dividend blue-chips among hedge funds.
Note that the article's title is a bit misleading because Yahoo's screen doesn't measure how large of a position each company is. It can only determine how many hedge funds owned a particular company based on 13-F filings with a 3 to 5-month lag.
Also note that long stocks are just one of over a dozen strategies hedge funds employ. In other words, even the largest position in a dividend blue-chip might make up just 1% or 2% of the overall portfolio.
- Almost no hedge fund or fund of any kind is "swinging for the fences" with giant positions in any single stock.
My last such article was focused on growth blue-chips, and was very well received.
So let's take a look at the 15 most popular dividend blue chips in the hedge funds, to see why X are actually worth considering buying today.
And just like last time, we'll do a countdown starting with the 15th most popular company and working our way to the 1st most popular. Each company will get a short summary of its fundamentals and both short and long-term return potential.
15th Most Popular Dividend Blue Chip With Hedge Funds - Cardinal Health ( CAH )
Further Reading
Cardinal Health Is Being Undervalued, Has Significant Upside In The Near Term .
- The number Of Hedge Funds That Own It: 45
- Price: $78.67
- Fair Value: $58.65
- Historical Discount: -34%
- Quality Rating: 80% very low risk 11/13 SWAN quality dividend aristocrat
- DK Rating: hold
- Yield: 2.5%
- Growth Consensus: 2.5%
- Long-Term Return Potential: 5.0%.
2025 Consensus Total Return Potential
Note that hedge funds don't always strive to own the best stocks for the long term; they sometimes buy momentum stocks, which CAH became in 2022.
14th Most Popular Dividend Blue-Chip With Hedge Funds - Altria ( MO )
Further Reading
Altria: Buy This 8% Yielding Dividend Aristocrat Before The Yield Goes To 10.5% .
- The number Of Hedge Funds That Own It: 47
- Price: $46.91
- Fair Value: $69.59
- Historical Discount: 33%
- Quality Rating: 98% medium-risk 13/13 Ultra SWAN dividend king
- DK Rating: Potential very strong buy
- Yield: 8.0%
- Growth Consensus: 5.5%
- Long-Term Return Potential: 13.5%.
2025 Consensus Total Return Potential
13th Most Popular Dividend Blue-Chip With Hedge Funds - 3M ( MMM )
Further Reading
3M Is Struggling, So Buy These 7+% Yielding Dividend Aristocrats Instead .
- The number Of Hedge Funds That Own It: 49
- Price: $117.49
- Fair Value: $182.16
- Historical Discount: 36%
- Quality Rating: 97% very low risk 12/13 Super SWAN dividend king
- DK Rating: Potential very strong buy
- Yield: 5.1%
- Growth Consensus: 6.6%
- Long-Term Return Potential: 11.7%.
2025 Consensus Total Return Potential
12th Most Popular Dividend Blue-Chip With Hedge Funds - Pioneer Natural Resources ( PXD )
Further Reading
Pioneer Natural Resources: 10% Total Yield And Rising
- The number Of Hedge Funds That Own It: 49
- Price: $220
- Fair Value: $301.39 (8.03X cash flow)
- Historical Discount: 27%
- Quality Rating: NA
- DK Rating: Potential Good Buy
- Yield: 11.6% (including variable dividend)
- Growth Consensus: 7.2%
- Long-Term Return Potential: NA.
2025 Consensus Total Return Potential
11th Most Popular Dividend Blue-Chip With Hedge Funds - Devon Energy ( DVN )
Further Reading
Devon Energy: China Is A Game Changer .
- The number Of Hedge Funds That Own It: 51
- Price: $60.85
- Fair Value: $55.91 (4.87X cash flow)
- Historical Discount: -7%
- Quality Rating: NA
- DK Rating: Hold
- Yield: 8.5% (including variable component)
- Growth Consensus: 12.1%
- Long-Term Return Potential: NA.
2025 Consensus Total Return Potential
10th Most Popular Dividend Blue-Chip With Hedge Funds- U.S. Bancorp ( USB )
Further Reading
U.S. Bancorp: Strong Acquisitions And Partnerships Grow Core Business .
- The number Of Hedge Funds That Own It: 52
- Price: $49.30
- Fair Value: $65.79
- Historical Discount: 25%
- Quality Rating: 73% medium-risk 10/13 blue-chip
- DK Rating: Potential good buy
- Yield: 3.9%
- Growth Consensus: 3.8%
- Long-Term Return Potential: 7.7%.
2025 Consensus Total Return Potential
9th Most Popular Dividend Blue-Chip With Hedge Funds - United Parcel Service (UPS)
Further Reading
United Parcel Service Delivers The Dividend Goods .
- The number Of Hedge Funds That Own It: 55
- Price: $191.66
- Fair Value: $221.64
- Historical Discount: 14%
- Quality Rating: 86% very low risk 12/13 Super SWAN
- DK Rating: Potential buy
- Yield: 3.9%
- Growth Consensus: 10.8%
- Long-Term Return Potential: 14.2%.
2025 Consensus Total Return Potential
8th Most Popular Dividend Blue-Chip With Hedge Funds - Gilead Sciences ( GILD )
Further Reading
Gilead Sciences: Potential To Continue Its Upward Trend .
- The number Of Hedge Funds That Own It: 56
- Price: $84.5
- Fair Value: $63
- Historical Discount: -25%
- Quality Rating: NA
- DK Rating: Hold
- Yield: 3.6%
- Growth Consensus: 4.7%
- Long-Term Return Potential: 8.3%.
2025 Consensus Total Return Potential
7th Most Popular Dividend Blue-Chip With Hedge Funds - Blackstone ( BX )
Further Reading
Blackstone: A 6.6% Yielding Retirement Dream Blue-Chip .
- The number Of Hedge Funds That Own It: 61
- Price: $97.13
- Fair Value: $91.39
- Historical Discount: -6%
- Quality Rating: 93% low risk 10/13 blue-chip
- DK Rating: hold
- Yield: 4.5%
- Growth Consensus: 11.8%
- Long-Term Return Potential: 16.3%.
2025 Consensus Total Return Potential
6th Most Popular Dividend Blue-Chip With Hedge Funds - Verizon ( VZ )
Further Reading
Verizon And AT&T: One Could Potentially Triple In 5 Years .
- The number Of Hedge Funds That Own It: 62
- Price: $41.51
- Fair Value: $59.03
- Historical Discount: 30%
- Quality Rating: 85% medium-risk 12/13 Super SWAN
- DK Rating: Potential very strong buy
- Yield: 6.3%
- Growth Consensus: 3.2%
- Long-Term Return Potential: 9.5%.
2025 Consensus Total Return Potential
5th Most Popular Dividend Blue-Chip With Hedge Funds - Philip Morris International ( PM )
Further Reading
The Good, Bad, And Wonderful News About Philip Morris .
- The number Of Hedge Funds That Own It: 63
- Price: $102.59
- Fair Value: $104.83
- Historical Discount: 2%
- Quality Rating: 98% very low risk 13/13 Ultra SWAN dividend king
- DK Rating: Potential reasonable buy
- Yield: 5.0%
- Growth Consensus: 4.1%
- Long-Term Return Potential: 9.1%.
2025 Consensus Total Return Potential
4th Most Popular Dividend Blue-Chip With Hedge Funds - Cisco Systems, Inc. ( CSCO )
Further Reading
Cisco And Intel: Avoid One Of These High-Yield Blue-Chips .
For further details see:
Hedge Funds Love These 8 Dividend Blue Chips, And So Should You