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10 Best Dividend Stocks to Buy According to Mason Hawkins’ Southeastern Asset Management

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·14 min read
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In this article, we will discuss the 10 best dividend stocks to buy according to Mason Hawkins’ Southeastern Asset Management. If you want to skip our detailed analysis of Hawkins' history and hedge fund performance, go directly to the 5 Best Dividend Stocks to Buy According to Mason Hawkins’ Southeastern Asset Management.

Mason Hawkins is an American hedge fund manager and value investor. In 1975, Mason Hawkins joined hands with three partners and founded Southeastern Asset Management. Southeastern Asset Management provides investment management services, which entail financial planning advice, quantitative analysis, portfolio management, and investment advisory services.

In 1989, Hawkins started working for Longleaf Partners Small-Cap Fund as a co-portfolio manager. The Longleaf fund is named after the longleaf pine tree that Hawkins’ parents brought up as they ran their family lumber business.

Hawkins invests specifically in highly-discounted businesses with a strong balance sheet. He mainly buys stocks at 60% or less than their intrinsic value. The fund offers investment advisory, financial planning, quantitative analysis, consulting, and portfolio management services.

Southeastern Fund's Q1 portfolio has a worth of $4.675 billion as of the first quarter of 2021. Also, Southeastern fund performance in the first quarter of 2021 was 8.07%, while in the last four quarters it was 78.84%.

Mason Hawkins initiated a new stake in Alibaba Group (NYSE: BABA) in the first quarter of 2021, buying 357,571 shares of the company, worth $81.07 million. On April 9, CICC analyst Junhao Fan initiated a coverage on Alibaba Group (NYSE: BABA) , rating it as “Outperform.” On May 13, Alibaba Group (NYSE: BABA) declared its first quarter 2021 revenue of RMB187.4 billion, up 63.9% YoY, beating the estimates by RMB6.73 billion.

Southeastern Asset Management also has a $165.19 million stake in Baidu, Inc. (NASDAQ: BIDU). On June 17, Baidu, Inc. announced that it partnered with BAIC Group's EV brand ARCFOX to jointly release Apollo Moon, a new generation of self-driving taxis that are set to be produced on a large scale. It will cost RMB 480,000 per-unit. On May 18, the company declared its first quarter 2021 earnings. The company declared earnings per share of RMB12.38, beating the market predictions by RMB1.63. The company also declared its quarterly revenue of RMB28.14 billion, up 24.8% YoY, beating the estimates by RMB980 million. On April 13, OTR Global upgraded Baidu (NASDAQ: BIDU) from “Mixed” to “Positive.”

Mason Hawkins also initiated a new stake in Biogen Inc. (NASDAQ: BIIB) in the first quarter of 2021, buying 603,890 shares of the biotechnology company, worth $168.94 million. On June 23, Eisai Co., Ltd., and Biogen Inc. declared that the U.S. Food and Drug Administration granted accelerated approval for lecanemab, which is used for the treatment of Alzheimer's disease. On June 18, Piper Sandler upgraded the stock to “Overweight” from “Neutral,” raising the price target to $450 from $384. On May 21, Biogen announced that it collaborated with Ginkgo Bioworks. This partnership will allow Biogen access Ginkgo's cell programming platform and capabilities by making an advance payment of $5 million to Ginkgo Bioworks.

The demand for dividend stocks has also been gaining traction as more people look for consistent revenue sources now that there is so much market uncertainty. Finding the best dividend stocks is not exactly a walk in the park, and it requires a lot of research. Even the hedge funds are struggling at finding valuable stocks amid the increasing financial volatility. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey's research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter's stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That's why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

10 Best Dividend Stocks to Buy According to Mason Hawkins' Southeastern Asset Management
10 Best Dividend Stocks to Buy According to Mason Hawkins' Southeastern Asset Management

Mason Hawkins of Southeastern Asset Management

With this context and industry outlook in mind, let’s start our list of the 10 best dividend stocks to buy according to Mason Hawkins' Southeastern Asset Management

Best Dividend Stocks to Buy According to Mason Hawkins' Southeastern Asset Management

10. General Electric Company (NYSE: GE)

Hawkins' Stake Value: $284,368,000 Percentage of Mason Hawkins' 13F Portfolio: 6.08% Dividend Yield: 0.31% Number of Hedge Fund Holders: 68

General Electric Company (NYSE: GE) is a high-tech industrial company. The company operates in the following segments: aviation, health protection, power, renewable energy, cyber industry, and finance. General Electric was founded in 1878 and is placed tenth on the list of 10 best dividend stocks to buy according to Mason Hawkins' Southeastern Asset Management. General Electric Company (NYSE: GE) has returned 103.09% to investors during the course of the past twelve months.

Just like Alibaba Group (NYSE: BABA), Baidu, Inc. (NASDAQ:BIDU), and Biogen Inc. (NASDAQ: BIIB), General Electric Company (NYSE: GE) is one of the best stocks to buy according to Mason Hawkins. On June 18, General Electric Company (NYSE: GE) declared a quarterly dividend of $0.01 per share in line with the previous. The dividend yield is 0.31%. On May 14, Andrew Kaplowitz, an analyst at Citi, initiated coverage on General Electric, rating the stock as “Buy,” with a price target of $17.00.

The hedge fund run by Mason Hawkins owns 21.66 million General Electric Company (NYSE: GE) shares worth $284.37 million, representing 6.08% of their investment portfolio. Eagle Capital Management is the company’s most significant stakeholder, with 113.04 million shares worth $1.48 billion.

Vulcan Value Partners, in its Q1 2021 investor letter, mentioned General Electric Company (NYSE: GE). Here is what Vulcan Value Partners has to say about General Electric Company in its letter:

General Electric is outperforming our expectations for 2021 as the economic recovery is occurring faster than expected. We are particularly pleased with its free cash flow generation. We are happy to own it in our portfolio.”

9. CNH Industrial N.V. (NYSE: CNHI)

Hawkins' Stake Value: $41,567,000 Percentage of Mason Hawkins' 13F Portfolio: 0.88% Dividend Yield: 0.82% Number of Hedge Fund Holders: 23

CNH Industrial N.V. (NYSE: CNHI) designs, manufactures, advertises, sells, and finances agricultural and construction equipment, globally. The company was incorporated in 1892 and stands ninth on the list of 10 best dividend stocks to buy according to Mason Hawkins' Southeastern Asset Management. CNH Industrial N.V. (NYSE: CNHI) currently has a $22.39 billion market capitalization. It delivered a return of 145.43% in the past 12 months.

On June 21, CNH Industrial N.V. (NYSE: CNHI) entered into an agreement to acquire 100% of Raven Industries' capital stock for $58 per share. On May 7, Bank of America added CNH Industrial to its US 1 List. The US 1 list represents assembling of its best financing ideas that are drawn from the universe of Buy-rated, US-listed stocks, covered by BofA Global Research fundamental equity research analysts. On March 4, CNH Industrial declared an annual dividend of EUR 0.11 per share.

Southeastern Asset Management holds 2.66 million shares of the company, worth $41.57 million. In the first quarter of 2021, 23 hedge funds in the database of Insider Monkey held stakes worth $739.95 million in CNH Industrial N.V. (NYSE: CNHI), up from 16 the preceding quarter worth $442.79 million.

In its first quarter 2021 investor letter, Longleaf Partners Fund highlighted a few stocks, and CNH Industrial N.V. was one of them. Here is what the fund said:

“CNH Industrial (CNH) (23%, 1.19%), one of the world’s largest agriculture machinery manufacturers, was another top contributor. CNH reported strong fourth quarter results, beating the consensus on every metric. The Agricultural Equipment (Ag) business, which represents the majority of our value, posted strong top-line growth of 19% YoY thanks to rising commodity prices, growing trade with China and the replacement of aging machinery fleets. Visibility for the first half of 2021 is strong, given solid Ag order growth across most key end markets, and we expect to see operational turnarounds in CNH’s other businesses. The company is also guiding 8-12% industrial sales growth for 2021, which is better than our initial expectation. The most positive surprise for the quarter was the company’s strong cash generation. CNH generated approximately $2.4bn FCF in the fourth quarter alone, driven by working capital release leading to a strong net cash position for the industrial segment. Due to the recent stock price appreciation, the price-to-value gap has narrowed, but we continue to have a positive view given a more favorable market outlook, the company’s strong execution capability and management’s continued commitments to value accretive transactions, including the planned splitting of the business and potentially other strategic asset sales.”

8. FedEx Corporation (NYSE: FDX)

Hawkins' Stake Value: $240,456,000 Percentage of Mason Hawkins' 13F Portfolio: 5.14% Dividend Yield: 1.01% Number of Hedge Fund Holders: 63

FedEx Corporation (NYSE: FDX) provides transportation, electronic commerce, and business services globally. The company was founded in 1971 and ranks eighth on the list of 10 best dividend stocks to buy according to Mason Hawkins' Southeastern Asset Management. FedEx Corporation (NYSE: FDX) currently has an $80.58 billion market capitalization and was able to deliver a 124.39% returns in the past 12 months.

FedEx Corporation (NYSE: FDX) has also paid consistent dividends since 2002. On June 14, the company declared a quarterly dividend of $0.75 per share, in line with the previous. The forward yield is 1.01%. On June 24, the company declared its earnings per share for the first quarter 2021. The company declared earnings per share of $5.01, beating the market predictions by $0.01. FedEx quarterly revenue was $22.6 billion, up 29.9% YoY, beating the estimates by $1.06 billion.

Just like Comcast Corporation (NASDAQ: CMCSA), Alibaba Group (NYSE: BABA), Baidu, Inc. (NASDAQ: BIDU) and Biogen Inc. (NASDAQ: BIIB), FedEx Corporation (NYSE: FDX) is one of the best stocks to buy according to Mason Hawkins.

In the first quarter 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $2.26 billion in FedEx, same as the preceding quarter worth $2.01 billion.

Artisan Partners, in its first quarter 2021 investor letter, mentioned FedEx Corporation (NYSE: FDX). Here is what Artisan Partners has to say about FedEx Corporation in its letter:

“Whatever products did make it off the line met a constrained logistics infrastructure, with commercial air capacity cut and ship cargo space at a premium. Then, in the event your dishwasher part actually made it to US waters, our ports were congested due to manpower shortages and COVID-19 protocols. When the goods were finally unloaded, it turns out trucking shortages caused a spike in ground rates! All this might be bad for your dinner parties, home décor or exercise goals, but it can be great for the middlemen. Middlemen like logistics expert FedEx.

FedEx Corporation (NYSE: FDX) provides global logistics services. It gets your dishwasher part on a truck, or that semiconductor chip on a plane. Surging demand for at-home deliveries during the pandemic boosted volumes and allowed management to push through price increases, keeping competitive with industry peers. The industry’s renewed pricing discipline was a welcome change, reflecting a broader commitment to earn better returns on invested capital. Despite a significant re-rating of the business over the last 12 months, FedEx remains attractive based on our margin of safety criteria.”

7. Empire State Realty Trust, Inc. (NYSE: ESRT)

Hawkins' Stake Value: $142,220,000 Percentage of Mason Hawkins' 13F Portfolio: 3.04% Dividend Yield: 1.14% Number of Hedge Fund Holders: 11

Empire State Realty Trust, Inc. (NYSE: ESRT) is a leading real estate investment trust. It was incorporated in 2013 and is placed seventh on the list of 10 best dividend stocks to buy according to Mason Hawkins' Southeastern Asset Management. Empire State Realty Trust, Inc. (NYSE: ESRT) stock has offered investors 85.12% in returns in the past year.

Just like FedEx Corporation (NYSE: FDX), Comcast Corporation (NASDAQ: CMCSA), Alibaba Group (NYSE: BABA), Baidu, Inc. (NASDAQ: BIDU) and Biogen Inc. (NASDAQ: BIIB), Empire State Realty Trust, Inc. (NYSE: ESRT) is one of the best stocks to buy according to Mason Hawkins. On May 17, the company declared a quarterly dividend of $0.035 per share in line with the previous. On June 14, Wolfe Research analyst Andrew Rosivach initiated a coverage on Empire State Realty with an “Outperform” rating and a price target of $16.00.

Southeastern Asset Management holds 12.78 million shares in the company worth over $142.22 million, representing 3.04% of their portfolio.

In its first quarter 2021 investor letter, Longleaf Partners Small-Cap Fund highlighted a few stocks, and Empire State Realty Trust, Inc. (NYSE: ESRT) was one of them. Here is what the fund said:

“Empire State Realty Trust (19%, 1.23%), the New York City property owner, also contributed to strong performance. Quarterly results were resilient, with occupancy remaining in the high-80s% in a challenging environment and Empire State Building observatory volumes slowly improving while gaining share from competing attractions. The company repurchased discounted shares at a 5% annualized pace. The stock still trades at a low multiple of earnings power and a 30%+ discount to our appraisal. CEO Tony Malkin shared his expectation that the depressed New York City market will recover in occupancy and pricing from 2022.”

6. Comcast Corporation (NASDAQ: CMCSA)

Hawkins' Stake Value: $251,772,000 Percentage of Mason Hawkins' 13F Portfolio: 5.38% Dividend Yield: 1.8% Number of Hedge Fund Holders: 88

Comcast Corporation (NASDAQ: CMCSA) functions as a media and technology company globally. Comcast Corporation (NASDAQ: CMCSA) was incorporated in 1963 and is ranked sixth on the list of 10 best dividend stocks to buy according to Mason Hawkins' Southeastern Asset Management. Comcast Corporation (NASDAQ: CMCSA) has returned 45.98% to investors over the past year.

Comcast is indeed a solid dividend-paying pick as the company has been paying a dividend since 1988. On May 25, Comcast Corporation (NASDAQ: CMCSA) declared a quarterly dividend of $0.25 per share, in line with the previous. On April 30, Timothy Horan, an analyst at Oppenheimer, initiated a coverage on Comcast Corporation (NASDAQ: CMCSA). He rated the stock as "Outperform" and set the price target to $75.00.

Just like Alibaba Group (NYSE: BABA), Baidu, Inc. (NASDAQ: BIDU) and Biogen Inc. (NASDAQ: BIIB), Comcast Corporation (NASDAQ: CMCSA) is one of the best stocks to buy according to Mason Hawkins.

Eagle Capital Management is the company’s most significant stakeholder, with 38.13 million shares worth $2.06 billion. The company is getting the attention of the smart money, as 88 hedge funds tracked by Insider Monkey reported owning stakes in the company in the first quarter of 2021, up from 84 funds in the fourth quarter of 2020.

Harding Loevner, in their first quarter 2021 investor letter, mentioned Comcast Corporation (NASDAQ: CMCSA). Here is what the fund said:

“Comcast is the Largest cable provider in t he U.S. and is the dominant internet access provider in the markets it serves. Though Comcast will likely see further declines in cable subscriptions due to ongoing cord-cutting, it should be able to off set that lost revenue by growing internet access customers and instituting higher pricing. The pandemic has increased the importance of a fast internet connection, with more content streaming to homes at increasingly higher quality. Comcast made significant upgrades early on, allowing it to quickly deploy new technology and increase speeds to meet the evolving needs of its customers.”

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Disclosure: None. 10 Best Dividend Stocks to Buy According to Mason Hawkins' Southeastern Asset Management is originally published on Insider Monkey.