If you’ve ever wanted to invest in the same stocks as top hedge fund managers, then the Goldman Sachs Hedge Industry VIP ETF (NYSEARCA:GVIP) may be the fund for you.
With just $176.8 million in assets under management (AUM), GVIP is easy to overlook, but I’m bullish on this small ETF from legendary investment firm Goldman Sachs (NYSE:GS) based on its solid performance. I’m also bullish on GVIP because of its differentiated strategy that takes it well beyond the tried-and-true (but at this point somewhat tired) Magnificent Seven names to give investors exposure to a whole slew of awesome under-the-radar stocks that are quietly generating excellent returns.
GVIP’s Unique Methodology
GVIP is a unique ETF with a differentiated strategy. According to Goldman Sachs, the fund “seeks to track the GS Hedge Fund VIP Index,” which “consists of fundamentally driven hedge fund managers’ ‘Very-Important-Positions,’ which appear most frequently among their top 10 long equity holdings.”
These “fundamentally driven hedge fund managers” are U.S. hedge fund managers that hold between 10 and 200 positions in U.S. equities, according to their most recent 13F filings. The fund excludes managers with less than $10 million in equity assets.
Goldman Sachs explains that the equity positions these remaining hedge funds hold are “then ranked within each individual hedge fund manager’s portfolio by descending market value. The approximately 50 stocks that appear most frequently in the top 10 holdings of this universe then become the Index constituents.”
The constituents are equal-dollar weighted and rebalanced quarterly, which prevents the fund from being dominated by a handful of positions, as we’ll discuss in the next section.
This methodology unearths some real hidden gems and creates an interesting group of holdings that you won’t find in most typical, cookie-cutter ETFs, as we’ll discuss further below.
It’s important to note that the ETF does not invest in the hedge funds themselves, and it doesn’t seek to track the performance of any specific hedge fund.
Portfolio of Hedge Fund Favorites
GVIP owns 47 stocks, and there is very little concentration risk here as its top 10 holdings account for just 23.7% of the fund. Below, you’ll find an overview of GVIP’s top 10 holdings from TipRanks’ holdings tool.
Nvidia (NASDAQ:NVDA) is the second-largest holding here, which is perhaps unsurprising, as the semiconductor juggernaut is beloved by investors of all stripes, whether they are retail investors or seasoned hedge fund managers.
But beyond Nvidia, there are plenty of shrewd investments here in stocks that are less familiar to many investors, myself included.
For example, the top holding is Vertiv (NYSE:VRT), which has ripped a 521.8% gain over the past year and enjoys a ‘Perfect 10’ Smart Score from TipRanks’ Smart Score system. The Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating.
Additional top 10 holdings like Tenet Healthcare (NYSE:THC) and AerCap Holdings (NYSE:AER) also boast 10 out of 10 Smart Scores and have returned 86.1% and 66.3%, respectively, over the past year. APi Group (NYSE:APG), another name that is well off the beaten path, enjoys a 9 out of 10 Smart Score and has returned 80.1% over the past year.
Outside of the top 10 positions, GVIP’s holdings, including Energy Transfer (NYSE:ET), Progressive (NYSE:PGR), Taiwan Semiconductor (NYSE:TSM), and Broadcom (NASDAQ:AVGO), all clock in with 10 out of 10 Smart Scores and have generated impressive returns over the past 12 months.
Add it all up, and GVIP looks like a great way to gain exposure to plenty of names from beyond the Magnificent Seven that are performing well and harbor considerable potential, going forward.
GVIP itself boasts an Outperform-equivalent 8 out of 10 ETF Smart Score.
Another nice thing about GVIP is that it is incredibly diversified by sector and not overly reliant on technology stocks. For investors who have decried the fact that the tech-centric Magnificent Seven has been responsible for much of the broader market’s gain over the past year, GVIP is a welcome antidote, as information technology has just an 18.9% weighting within the fund. For comparison, information technology makes up 29.8% of the S&P 500 (SPX). In fact, the fund’s largest weighting is toward financials (21.2%), followed by industrials (19.7%).
GVIP’s Solid Track Record
GVIP has a solid track record of performance, with a five-year annualized return of 13.9% as of February 29. As of the same date, the fund also returned 14.6% on an annualized basis since its inception in 2016.
What Is GVIP’s Expense Ratio?
GVIP charges an expense ratio of 0.45%. This means that an investor allocating $10,000 into the fund will be charged $45 in fees on an annual basis. While this doesn’t make GVIP one of the cheaper funds out there, it isn’t terrible, and notably, it is still below the average expense ratio for all ETFs, which is currently 0.57%. Assuming that GVIP maintains this fee structure, an investor in the fund will pay $567 in fees in a 10-year period.
Is GVIP Stock a Buy, According to Analysts?
Turning to Wall Street, GVIP earns a Strong Buy consensus rating based on 44 Buys, four Holds, and zero Sell ratings assigned in the past three months. The average GVIP stock price target of $120.14 implies 10% upside potential.
Exposure to the Market’s Hidden Gems
GVIP is an interesting ETF with a differentiated strategy that gives investors exposure to a wide variety of the stock market’s hidden gems, which they won’t find in the many generic ETFs currently flooding the market.
I’m bullish on GVIP based on its solid five-year performance and the fact that it gives investors exposure to overlooked stocks like Tenet Healthcare, Aercap Holdings, and APi Group, which are quietly posting scorching performances. I also like the fact that GVIP invests in many stocks outside of the tech sector that are performing well, giving investors exposure to a different group of the market’s winners.
In this article, we will be taking a look at 12 safe stocks to invest in now. To skip our detailed analysis of current stock market news, you can go directly to see the Starter Stock Portfolio: 5 Safe Stocks To Invest In Now.
Safe Investing For Beginner Investors
Investing in defensive sectors has always been a go-to strategy for investors who like to play it safe, which is why many new investors in particular are heavily drawn to these areas in the market. Traditionally, the main defensive sectors in the market are healthcare, utilities, and consumer staples. Over the past year, some financial professionals saw a trend of most investors avoiding defensive stocks, but this may come to an end in 2024, as John Mowrey, NFJ Investment Group’s executive managing director and CIO, noted on CNBC’s “Squawk Box” on January 30:
“You’ve been paid to avoid some of the more defensive areas because of higher interest rates. So if you look at utilities, if you look at staples, if you look at healthcare, all of these higher-yielding areas have been hollowed out because you’ve been paid to avoid them. Everyone’s been chasing the Mag 7 and the AI trend and then they’re clipping coupons in fixed income. That’s created a real opportunity in the more defensive areas. So should you get a bumpier period in the market, I think you’ll get paid to be in those areas. So I like some of the more defensive areas.”
Mowrey believes that investors would be well-served to start moving into defensive areas as they are offering more attractive valuations, healthy dividends, and dividend growth, the last of which is a strong barrier against inflation. Considering these factors, many believe that defensive stocks are among the best beginner stocks to buy at present.
Considering the above, major fund managers are gravitating towards defensive investments. For instance, on February 21, Thomas Taw, the BlackRock APAC iShares Investment Strategy Head, joined “Bloomberg Markets: Asia” to discuss his recent moves. Taw noted that he is now positioning “more defensively in equity portfolios” instead of pursuing higher valuation companies and that he is particularly looking into more “dividend type of investing.”
Tech-Driven Growth in Defensive Sectors
Investments in defensive sectors have been driving growth exponentially. For instance, JPMorgan Chase & Co.’s healthcare sector outlook report for 2024 noted that the onset of the COVID-19 pandemic propelled venture capitalists and investors to provide financial backing to the healthcare sector, resulting in investments in healthcare startups reaching all-time highs in 2021. The focus on tech in healthcare has also resulted in investors committing significant capital to medical technologies. Additionally, Deloitte’s 2024 outlook on the utilities sector noted that the US Inflation Reduction Act’s one-year anniversary marked the moment when investments worth at least $122 billion in clean-energy generation projects were confirmed. Like healthcare, the utilities sector is also increasingly turning to technology in its operations and goals for electrification, with Deloitte stating that 2024 will see power and utilities companies turning to artificial intelligence and other digital solutions as they work to transform the grid.
Our discussion above highlights the key role that tech has been playing in recent times, not just in the markets but also in terms of contributing to the growth of other sectors. Tech’s contributions till date have resulted in many financial professionals beginning to consider it as a defensive sector as well, making stocks like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META) good options for those looking to buy into some of the best beginner stocks. In our list below, we have highlighted several defensive stocks, including some of the best tech stocks and best consumer staples stocks to buy, among others.
A trader working diligently at her desk, evaluating stocks of multiple industries.
Our Methodology
To compile our list of the best beginner stocks to buy, we screened for stocks in defensive sectors such as healthcare, utilities, consumer staples, and technology. We then shortlisted and ranked the stocks based on the number of hedge funds holding stakes in them by using Insider Monkey’s hedge fund data for the fourth quarter. The stocks are ranked from the lowest to the highest number of hedge funds holding stakes in them. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by over 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Starter Stock Portfolio: Safe Stocks To Invest In Now
12. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 56
Vistra Corp. (NYSE:VST) is an independent power producer and energy trader corporation in the utilities sector. It retails electricity and natural gas to residential, commercial, and industrial customers and is based in Irving, Texas.
An Overweight rating and a $78 price target were maintained on Vistra Corp. (NYSE:VST) on March 26 by Morgan Stanley analysts.
A total of 56 hedge funds were long Vistra Corp. (NYSE:VST) in the fourth quarter, with a total stake value of $1.3 billion.
Sound Shore Management said the following about Vistra Corp. (NYSE:VST) in its fourth-quarter 2023 investor letter:
“For the year, we had a number of stocks up 50% or more and the list includes a diverse set of industries such as homebuilding, heavy truck manufacturing, and semiconductor capital equipment. We would like to highlight one outstanding contributor for the year, electricity generator and marketer Vistra Corp. (NYSE:VST), a low-cost provider with a healthy balance between generation and retail. Demand for electricity is growing and notably, load peaks are changing as well. As the country brings on more renewables and adjusts to greater demand later in the day due to increased use of electric heat pumps and electric car charging, reliable clean power is at a premium. Vistra is well positioned with diversified fuel sources including solar, natural gas, coal, nuclear and battery power storage facilities, along with a marketing division to manage price volatility. The company will soon be closing its accretive acquisition of merchant power generator, Energy Harbor, and the deal will make Vistra the second largest carbon free, nuclear electricity provider behind Constellation Energy, another portfolio holding. Vistra CEO Jim Burke, leads a veteran utility management team that is committed to transitioning the company’s portfolio to a sustainable footprint by closing older fossil fuel plants and increasing the renewables portfolio. They have also been an important voice to advocate for changes that will accelerate the global transition to a clean, renewable energy future, while maintaining adequate near-term supply. Vistra has a strong balance sheet that allows the company to invest in innovation and operational improvements. Additionally, management is using excess cash flow to buy 40% of the outstanding shares over a five year period and they are more than half way through that process. Currently valued at 9 times earnings with a 17% free cash flow yield and a 2.3% dividend, the stock remains a full position. As you can see from the chart below, Vistra’s performance was quite different than many other electricity providers and provides further evidence of the disparate performance that can often be found within a sector.”
Like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META), Vistra Corp. (NYSE:VST) is among the best beginner stocks to buy this year.
11. PG&E Corporation (NYSE:PCG)
Number of Hedge Fund Holders: 58
Third Point was the most prominent shareholder in PG&E Corporation (NYSE:PCG) at the end of the fourth quarter, holding 57.9 million shares in the company.
PG&E Corporation (NYSE:PCG) is another utility company on our list of the best beginner stocks. It is based in Oakland, California, and engages in the sale and delivery of electricity and natural gas. The company uses nuclear, hydroelectric, fossil fuels, fuel cells, and photovoltaic sources to generate electricity.
On January 22, Barclays analysts maintained an Overweight rating and a $19 price target on PG&E Corporation (NYSE:PCG).
PG&E Corporation (NYSE:PCG) was spotted in the 13F holdings of 58 hedge funds in the fourth quarter, with a total stake value of $2.9 billion.
10. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 65
Wells Fargo analysts maintained an Overweight rating and $85 price target on NextEra Energy, Inc. (NYSE:NEE) on March 19.
NextEra Energy, Inc. (NYSE:NEE) is among the best beginner stocks to buy now. It generates, transmits, distributes, and sells electric power to retail and wholesale customers. The company is based in Juno Beach, Florida.
Our hedge fund data for the fourth quarter shows 65 hedge funds long NextEra Energy, Inc. (NYSE:NEE), with a total stake value of $959.2 million.
ClearBridge Investments mentioned NextEra Energy, Inc. (NYSE:NEE) in its fourth-quarter 2023 investor letter:
“We added a new position in NextEra Energy, Inc. (NYSE:NEE), in the utilities sector, which acquires, owns and manages contracted clean energy projects in the U.S. The company was at the center of the defensive stock storm when it slowed its renewable growth outlook modestly in late September, and the stock collapsed almost 30% in less than two weeks. We saw this as an opportunity to invest in arguably the best combination of a regulated utility and an experienced renewable operator with good long-term growth options. Even at a much-reduced estimated growth rate from higher financing costs, which will likely prove to be conservative, our estimate of intrinsic business value is materially higher.”
9. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 68
Holding over 15 million shares in the company, Fundsmith LLP was the largest shareholder in Philip Morris International Inc. (NYSE:PM) at the end of the fourth quarter.
As of February 13, Societe Generale analysts maintain a Hold rating and $87.5 price target on Philip Morris International Inc. (NYSE:PM).
Based in Stamford, Connecticut, Philip Morris International Inc. (NYSE:PM) is a consumer staples company in the tobacco industry. It offers cigarettes and smoke-free products such as heat-not-burn, vapor, and oral nicotine products under the IQOS and ZYN brands. It is among the best beginner stocks to buy now.
Philip Morris International Inc. (NYSE:PM) was seen in the portfolios of 68 hedge funds in the fourth quarter, with a total stake value of $5.5 billion.
8. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 71
For the fourth quarter, 71 hedge funds were long The Procter & Gamble Company (NYSE:PG), with a total stake value of $5.9 billion.
The Procter & Gamble Company (NYSE:PG) is another consumer staples company on our list of the best beginner stocks, operating in the household products industry. It provides branded consumer packaged goods and is based in Cincinnati, Ohio.
Truist Securities analysts upgraded The Procter & Gamble Company (NYSE:PG) from Hold to Buy on March 11 and placed a $175 price target on the stock.
7. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 85
Fisher Asset Management was the largest shareholder in Walmart Inc. (NYSE:WMT) at the end of the fourth quarter, holding 28.6 million shares in the company.
Walmart Inc. (NYSE:WMT) had 85 hedge funds long its stock in the fourth quarter, with a total stake value of $6.2 billion.
Based in Bentonville, Arizona, Walmart Inc. (NYSE:WMT) is a consumer staples merchandise retail company on our list of the best beginner stocks. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores.
An Outperform rating and a $68 price target were maintained on Walmart Inc. (NYSE:WMT) on March 27 by Telsey Advisory Group analysts.
6. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 102
Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company based in Indianapolis, Indiana. It offers human and animal pharmaceuticals and oncology products, among more.
For the fourth quarter, we saw 102 hedge funds long Eli Lilly and Company (NYSE:LLY), with a total stake value of $11.2 billion.
An $850 price target and a Buy rating were maintained on Eli Lilly and Company (NYSE:LLY) on March 22 by Truist Securities analysts.
Like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META), Eli Lilly and Company (NYSE:LLY) is among the best beginner stocks to invest in today.
Click to continue reading and see the Starter Stock Portfolio: 5 Safe Stocks To Invest In Now.
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Disclosure: None. Starter Stock Portfolio: 12 Safe Stocks To Invest In Now is originally published on Insider Monkey.
In this article, we discuss 12 best foreign dividend stocks to invest in. You can skip our detailed analysis of the performance of dividend stocks over the years, and go directly to read 5 Best Foreign Dividend Stocks To Invest In.
Investors have consistently shown a preference for dividend stocks, whether they originate from American or international companies. The primary objective of investing in these stocks is to generate a steady income, making it a top priority for investors. Dividends can serve as indicators of a company’s financial strength. Over time, companies that have initiated or raised their dividends have tended to outperform those that have reduced or eliminated dividend payments. As per findings from Franklin Templeton, companies in the S&P 500 that consistently increased or initiated dividends experienced a positive return of 8.58% over the 30-year period ending in December 2022. In contrast, those that reduced dividends showed a negative return of 2.64%. Additionally, stocks that did not pay any dividends provided a 3.25% return during the same timeframe.
These returns extend beyond solely U.S. stocks; global companies that consistently increase dividends have also demonstrated robust performance over time. There is significant evidence from various equity markets indicating that investment strategies focused on dividends tend to outperform the broader market in the long term. Abrdn referenced data from Factset and disclosed that over the last two decades, companies in the MSCI All Country World Index, that initiated or consistently increased their dividends, yielded a return of 10.68%. In contrast, companies that cut or eliminated dividends experienced a negative return of 2.70%. The report highlighted that within the realm of global equities, the annual return volatility of Dividend Growers and Initiators is notably lower than that of Non-Dividend Payers and Dividend Cutters & Eliminators. Moreover, in comparison to the broader global equities represented by the MSCI ACWI Index, the return volatility of Dividend Growers & Initiators has also been lower, contributing to more favorable risk-adjusted returns.
During periods characterized by elevated inflation and surging interest rates, investors place a higher value on high yields. The prospect of earning additional percentage points on returns becomes particularly appealing. According to a report by Morningstar, as of May 2023, the markets with the highest yields include Norway, Hungary, Romania, and Iceland. On average, Norwegian stocks that provide dividends are anticipated to yield an impressive 17.83%, making them particularly attractive to investors seeking robust returns in such economic conditions.
Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV) are some of the most prominent US dividend stocks. However, in this article, we will take a look at some of the best foreign dividend stocks to invest in.
Image Source: Shutterstock
Our Methodology:
For this list, we initially used a stock screener to identify foreign (non-U.S.) stocks that are traded on US stock exchanges. Subsequently, from this dataset, we selected 12 stocks that boasted the highest number of hedge fund investors from Insider Monkey’s database of Q3 2023. The stocks presented in the article were then arranged in ascending order based on the count of hedge fund investors. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
12. Royal Bank of Canada (NYSE:RY)
Number of Hedge Fund Holders: 19
Royal Bank of Canada (NYSE:RY) is one of the largest and most prominent banks in Canada, and it is also a major player in the global financial industry. In November 2023, the company declared a 2% hike in its quarterly dividend to C$1.38 per share. It has raised its dividends every year since 2012, which makes RY one of the best foreign dividend stocks to invest in. The stock has a dividend yield of 4.16%, as of January 26.
RY can be added to dividend portfolios alongside popular US dividend stocks, such as Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV).
At the end of Q3 2023, 19 hedge funds tracked by Insider Monkey reported having stakes in Royal Bank of Canada (NYSE:RY), down slightly from 20 in the previous quarter. The consolidated value of these stakes is over $193.6 million. Among these hedge funds, Israel Englander’s Millennium Management was the largest stakeholder of the company in Q3.
11. Unilever PLC (NYSE:UL)
Number of Hedge Fund Holders: 21
Unilever PLC (NYSE:UL) is a London-based multinational consumer goods company with a broad portfolio of products in various categories. In November 2023, the company declared a quarterly dividend of $0.453 per share, which was consistent with its previous dividend. With a dividend yield of 3.94% as of January 26, UL is one of the best foreign dividend stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in Unilever PLC (NYSE:UL) grew to 21 in Q3 2023, from 19 in the previous quarter. The collective value of these investments is over $628 million.
Artisan Partners mentioned Unilever PLC (NYSE:UL) in its Q2 2023 investor letter. Here is what the firm has to say:
“We made two significant purchases during the quarter: Unilever PLC (NYSE:UL) and Bayer AG. Both companies have been owned in prior years. And the share price of both companies became more attractive at least partially due to the stock market’s recent focus on technology stocks.
Unilever PLC is a manufacturer of consumer goods with a market cap of 100 billion pounds. You will be familiar with some of their products, such as Ben and Jerry’s ice cream, Dove Soap and Hellman’s mayonnaise. The company is a global powerhouse with 60 billion euros in revenue and 14 brands with sales over 1 billion euros. Dove, Knorr and OMO (Old Mother Owl, which is a global detergent brand) generate more than 4 billion euros in sales each. The company is diversified across five global divisions, including beauty and wellbeing, personal care, homecare and nutrition. Each of these businesses generates between 12 billion and 14 billion euros in revenue. Ice cream is the fifth division with close to 5 billion euros in revenue.”
10. Novartis AG (NYSE:NVS)
Number of Hedge Fund Holders: 26
Novartis AG (NYSE:NVS) is a multinational pharmaceutical and healthcare company headquartered in Switzerland. It is one of the largest pharmaceutical companies in the world, and it operates in various segments of the healthcare industry. The company currently offers an annual dividend of CHF 3.20 per share, having raised it by 3.2% in February. This was the company’s 26th consecutive year of dividend growth, which places NVS on our list of the best foreign dividend stocks. As of January 26, the stock offers a dividend yield of 3.27%.
As of the close of Q3 2023, 26 hedge funds tracked by Insider Monkey reported having stakes in Novartis AG (NYSE:NVS), which remained unchanged from the previous quarter. The total value of these stakes is more than $468 million.
9. Sanofi (NASDAQ:SNY)
Number of Hedge Fund Holders: 29
Sanofi (NASDAQ:SNY) is a Paris-based multinational pharmaceutical company that is primarily focused on the research, development, manufacturing, and marketing of pharmaceutical products. The company offers an annual dividend of €3.56 per share and has a dividend yield of 3.81%, as of January 26. With a dividend growth streak of 29 years under its belt, SNY is one of the best foreign dividend stocks on our list.
Of the 910 hedge funds tracked by Insider Monkey at the end of Q3 2023, 29 funds owned stakes in Sanofi (NASDAQ:SNY), compared with 30 in the preceding quarter. The collective value of these stakes is $1.18 billion. With roughly 15 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
8. BP plc (NYSE:BP)
Number of Hedge Fund Holders: 35
BP plc (NYSE:BP) is a British multinational oil and gas company with operations across the entire energy spectrum. It provides a dividend of $0.4362 per American Depositary Share (ADS), equating to a dividend yield of 4.86, as of January 10. The company has been paying regular dividends to shareholders since 1998, which makes BP one of the best foreign dividend stocks on our list. The stock’s dividend yield on January 26 came in at 4.82%.
At the end of September 2023, 35 hedge funds owned investments in BP plc (NYSE:BP), down from 36 in the previous quarter, as per Insider Monkey’s database. These stakes are worth over $2.05 billion in total.
7. Barrick Gold Corp (NYSE:GOLD)
Number of Hedge Fund Holders: 36
Barrick Gold Corp (NYSE:GOLD) ranks seventh on our list of the best foreign dividend stocks. The leading international gold mining company is headquartered in Toronto, Canada, and has a significant presence in the global mining industry. The company is primarily engaged in the exploration, development, and operation of gold mines. It currently pays a quarterly dividend of $0.10 per share and has a dividend yield of 2.58%, as of January 26.
As of the end of Q3 2023, 36 hedge funds in Insider Monkey’s database reported having stakes in Barrick Gold Corp (NYSE:GOLD), growing from 32 in the previous quarter. The collective value of these stakes is over $454.4 million. First Eagle Investment Management was the company’s leading stakeholder in Q3, owning over 42 million shares.
6. LyondellBasell Industries NV (NYSE:LYB)
Number of Hedge Fund Holders: 36
LyondellBasell Industries NV (NYSE:LYB) is a multinational chemical industry company, based in the Netherlands. The company operates in the manufacturing and refining of petrochemicals, polymers, and other chemical products. LYB is one of the best foreign dividend stocks on our list as the company maintains a 13-year track record of consistent dividend growth. As of January 26, the stock has a dividend yield of 5.24%.
In addition to popular dividend stocks, such as Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV), LYB van also offer reliable investment options for investors.
The number of hedge funds tracked by Insider Monkey owning stakes in LyondellBasell Industries NV (NYSE:LYB) stood at 36 in Q3 2023, which remained unchanged from the previous quarter. The consolidated value of these stakes is over $687.2 million.
Click to continue reading and see 5 Best Foreign Dividend Stocks To Invest In.
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Disclosure. None. 12 Best Foreign Dividend Stocks To Invest In is originally published on Insider Monkey.
In this article, we will take a detailed look at the 13 High-Growth Canadian Dividend Stocks To Invest In. For a quick overview of such stocks, read our article 5 High-Growth Canadian Dividend Stocks To Invest In.
Dividend investing took a backseat in 2023 as an unending optimism prevailed the market thanks to the AI-led rally that kept buoying tech stocks higher and higher, defying recession forecasts and inflation-related worries. But can the 2023 rally continue through 2024? US Bank in its 2024 outlook report titled “The Year of It Ain’t Over ’til it’s Over” said that its experts forecast slower growth at least during the first half of 2024 as consumer savings dissipate and effects of rate hikes become visible.
“Inflation, interest rates and earnings are interrelated keys to equity price movements, with inflation levels persisting above the Fed’s price stability target entrenching a period of higher interest rates. Higher interest rates increase competition from bond investments, which pressures valuation measures such as the price-to-earnings ratio (the share price equity investors are willing to pay for realized or future earnings). Additional cautionary factors likely to weigh on equity returns in the new year include narrow equity sector performance leadership in 2023, the potential for economic and corporate earnings pressures to emerge in 2024, already-elevated prices of technology- related companies and geopolitical issues including ongoing conflicts between Russia/Ukraine and Israel/Hamas as well as tensions between the U.S. and China.”
The Pendulum is Swinging in Favor of Dividend Stocks
The latest inflation report showed the Fed’s long battle against inflation might not be over after all and we are not out of the woods yet. Geopolitical risks, diminishing household savings and persistent inflation have made dividend stocks like The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) relevant again. Matt Powers, managing partner at Powers Advisory Group, said in a program on CNBC earlier this month that the “pendulum is swinging” in favor of dividend stocks as he advised investors to load up on dividend-paying companies with a strong history of dividend growth.
Methodology For this article used manual research and stock screeners to pick Canadian dividend stocks with high sales growth reported over the past five years and in the most recent quarters. With each stock we have mentioned hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Image: Depositphotos
13. Vox Royalty Corp (NASDAQ:VOXR)
Number of Hedge Fund Investors: 5
With over 2% dividend yield and high revenue growth, Vox Royalty Corp (NASDAQ:VOXR) ranks 13th in our list of the high-growth Canadian dividend stocks to invest in.
As of the end of the third quarter of 2023, five hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Vox Royalty Corp (NASDAQ:VOXR).
12. Centerra Gold Inc. (NYSE:CGAU)
Number of Hedge Fund Investors: 10
Centerra Gold Inc. (NYSE:CGAU) ranks 12th in our list of the high-growth Canadian dividend stocks. In November, Desjardins started covering the stock with a Buy rating and a C$12 price target. The financial service company praised Centerra Gold Inc’s (NYSE:CGAU) strong cash flow.
As of the end of the third quarter of 2023, 10 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in Centerra Gold Inc. (NYSE:CGAU). The biggest hedge fund stakeholder of Centerra Gold Inc. (NYSE:CGAU) during this period was Ryan Schedler and Bradley Shisler’s Condire Investors which owns a $46 million stake in Centerra Gold Inc. (NYSE:CGAU).
Heartland Value Fund stated the following regarding Centerra Gold Inc. (NYSE:CGAU) in its fourth quarter 2023 investor letter:
“Early last year, we highlighted Centerra Gold Inc. (NYSE:CGAU), a producer of gold and copper. With the recent pivot by the Federal Reserve to an easy money policy, we thought an update of this underappreciated hard asset was timely.
Centerra continues to make progress in increasing production while lowering costs. During the third quarter, the Oksut mine restarted, resulting in earnings per share of $0.20 while throwing off cash flow in excess of $100 million. Centerra remains debt free with cash soaring to $492 million, or $2.28 per share. A new management team is focused on optimizing a diverse portfolio of assets, including a strategy to boost the value of its molybdenum business for eventual sale. With an admirable balance sheet, Centerra has the resources to fund an aggressive exploration program in North America, pay a 3.3% dividend, and embark on an 8.5% repurchase of shares outstanding.
Trading below stated book value, approximately 60% of NAV, and less than 3X EV/EBITDA, we believe Centerra remains an outstanding small cap value.”
11. Bank of Nova Scotia (NYSE:BNS)
Number of Hedge Fund Investors: 11
With a dividend yield of 6.8% as of January 11, Bank of Nova Scotia (NYSE:BNS) is a notable dividend stock. Over the past decade, Bank of Nova Scotia (NYSE:BNS) has increased its dividend at a CAGR of 5.75%.
In November Bank of Nova Scotia (NYSE:BNS) posted fiscal Q4 results. Adjusted EPS in the quarter came in at C$1.26. Revenue in the period jumped 8.9% year over year to C$8.31 billion.
Like BNS, hedge funds are also loading up on The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
10. Manulife Financial Corp (NYSE:MFC)
Number of Hedge Fund Investors: 13
Canadian insurance company Manulife Financial Corp (NYSE:MFC) has a dividend yield of about 5% as of January 11. Manulife Financial Corp (NYSE:MFC) posted a strong third quarter in November thanks to strong growth from Asia segment and positive results from Global Wealth and Asset Management division.
As of the end of the third quarter of 2023, 13 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Manulife Financial Corp (NYSE:MFC). The most significant stakeholder of Manulife Financial Corp (NYSE:MFC) during this period was Joseph Sirdevan’s Galibier Capital Management which owns a $37.4 million stake in Manulife Financial Corp (NYSE:MFC).
9. Toronto-Dominion Bank (NYSE:TD)
Number of Hedge Fund Investors: 14
Toronto-Dominion Bank (NYSE:TD) is a high-yield dividend stock. The stock’s dividend yield is over 4.8% as of January 11. In November, Toronto-Dominion Bank (NYSE:TD) increased its dividend by 6.3%.
As of the end of the third quarter of 2023, 14 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Toronto-Dominion Bank (NYSE:TD). The most notable hedge fund stakeholder of Toronto-Dominion Bank (NYSE:TD) was Joseph Sirdevan’s Galibier Capital Management which owns a $28 million stake in Toronto-Dominion Bank (NYSE:TD).
8. Open Text Corp (NASDAQ:OTEX)
Number of Hedge Fund Investors: 16
Enterprise software company Open Text Corp (NASDAQ:OTEX) shares have gained about 31% over the past one year. In November Open Text Corp (NASDAQ:OTEX) declared a quarterly dividend of $0.25 per share. Forward dividend yield came in at 2.9%. The dividend was payable on December 20.
As of the end of the third quarter of 2023, 16 hedge funds tracked by Insider Monkey had stakes in Open Text Corp (NASDAQ:OTEX). The most notable hedge fund stakeholder of Open Text Corp (NASDAQ:OTEX) during this period was Natixis Global Asset Management’s Harris Associates which owns a $404 million stake in Open Text Corp (NASDAQ:OTEX).
FPA Crescent Fund made the following comment about Open Text Corporation (NASDAQ:OTEX) in its Q2 2023 investor letter:
“Open Text Corporation (NASDAQ:OTEX)t was a relatively short-lived holding in comparison to our typical time frame. We were attracted to this Canadian-based provider of enterprise software due to its stable revenue stream. More than 80% of Open Text’s revenue was recurring, which helped deliver attractive mid-30s EBITDA margins. We considered the business to have a sticky customer base that included 97 of the 100 largest companies in the world. Purchased at a low double-digit multiple to after-tax free cash flow, we expected to own the company for years, with capital deployment going towards dividends, buybacks, and small bolt-on acquisitions, as it had in the past. Unfortunately, to our surprise, while we owned the stock, Open Text announced a relatively large acquisition in the form of UK-based Micro Focus. Familiar with the target, we were unenthused about both the asset and increased debt on the balance sheet from funding the purchase, so we chose to exit stage left rather than try to re-write our investment thesis.”
7. Canadian Imperial Bank of Commerce (NYSE:CM)
Number of Hedge Fund Investors: 17
With a dividend yield of 5.8% and high revenue growth, Canadian Imperial Bank of Commerce (NYSE:CM) ranks 7th in our list of the high-growth Canadian dividend stocks to buy now. In November, Canadian Imperial Bank of Commerce (NYSE:CM) upped its dividend by 3.4%.
During the same month Canadian Imperial Bank of Commerce (NYSE:CM) posted fiscal fourth quarter results. Adjusted EPS in the period came in at C$1.57. Revenue in the quarter jumped 8.3% year over year to C$5.84 billion.
6. B2Gold Corp (NYSE:BTG)
Number of Hedge Fund Investors: 19
Canadian-based mining company B2Gold Corp (NYSE:BTG) is among the high-yield dividend stocks popular among hedge funds. A total of 19 hedge funds tracked by Insider Monkey reported having stakes in B2Gold Corp (NYSE:BTG). The biggest hedge fund stakeholder of B2Gold Corp (NYSE:BTG) was John Overdeck and David Siegel’s Two Sigma Advisors which owns a $34.3 million stake in B2Gold Corp (NYSE:BTG). In addition to BTG, hedge funds are also piling into The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
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Disclosure. None. 13 High-Growth Canadian Dividend Stocks To Invest In was initially published on Insider Monkey.