In light of Ford Motor Co. (F, Financial) suspending its dividend to strengthen its cash position amid the coronavirus outbreak, five dividend growth stocks broadly owned by hedge fund gurus are Skyworks Solutions Inc. (SWKS, Financial), MSC International Direct Co. Inc. (MSM, Financial), W.W. Grainger Inc. (GWW, Financial), Lincoln Electric Holdings Inc. (LECO, Financial) and Novo Nordisk A/S (NVO, Financial).
The Dividend Growth Portfolio, one of our Premium screens within the All-in-One Screener, seeks high-quality companies that have grown dividends over the past five years. The above stocks have at least two hedge fund gurus owning shares as of the December 2019 filing.
Ford skids on dividend cut as coronavirus outbreak shuts down plant operations
Shares of Ford sank near a 52-week low of $4.10 as the Dearborn, Michigan-based automaker withdrew its 2020 financial performance guidance and suspended its dividend to preserve cash and provide additional flexibility in the current environment. Ford CEO Jim Hackett said in a press release that the company is “managing through the coronavirus outbreak” like the company did during the Great Depression.
As such, investors might seek opportunities in high-quality companies that have grown dividends over the past five years.
Skyworks Solutions
Skyworks Solutions has at least five hedge fund gurus owning shares.
Skyworks Solutions produces semiconductors for wireless handsets and other devices used for wireless connectivity. GuruFocus ranks the Woburn, Massachusetts-based company’s financial strength 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 12.58 and debt ratios that outperform over 84% of global competitors.
Skyworks’ expanding profit margins and strong returns on assets contribute to a GuruFocus profitability rank of 9. Additionally, the company has increased its dividend approximately 41.4% per year on average over the past five years.
Gurus with large holdings in Skyworks include Ken Heebner (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
MSC International Direct
At least five gurus own shares of MSC International Direct as of December 2019. The company distributes metalworking, maintenance, repair and operations products and services through a network of over 100 branches and over 12 fulfillment centers.
GuruFocus ranks the Melville, New York-based company’s profitability and valuation 8 out of 10 on several positive investing signs, which include price valuations near 10-year lows and operating margins that are outperforming over 86.96% of global competitors despite contracting over the past five years.
MSC International Direct’s dividend has increased approximately 13.7% per year on average over the past five years.
W.W. Grainger
W.W. Grainger has at least three hedge fund guru owners as of December 2019. The company distributes over 1.7 million maintenance, repair and operations products sourced from over 5,000 suppliers.
GuruFocus ranks the Lake Forest, Illinois-based company’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 7 and an operating margin that has outperformed over 83% of global competitors despite contracting over the past five years.
W.W. Grainger’s dividend has grown approximately 6.1% per year on average over the past five years. The company has continuously increased its dividend since 1972.
Gurus with large holdings in Grainger include Jerome Dodson (Trades, Portfolio)’s Parnassus Endeavor Fund (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
Lincoln Electric
Lincoln Electric manufactures a wide range of welding, cutting and brazing products. GuruFocus ranks the Cincinnati-based company’s profitability 9 out of 10 on several positive investing signs, which include expanding operating margins and returns that are outperforming over 94% of global competitors.
Lincoln Electric has increased its dividend approximately 13.3% per year on average over the past five years. The company has continuously upped its dividend since 1995.
Novo Nordisk
Novo Nordisk manufactures and markets a wide range of human and modern insulins, injectable diabetes treatments and oral antidiabetic agents. GuruFocus ranks the Danish biotech company’s profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank, expanding operating margins and a return on equity that outperforms 99% of global competitors.
Novo Nordisk has increased its dividend approximately 12.5% per year on average over the past five years.
See also
Our GuruFocus YouTube Channel includes a few videos on how to find high-quality companies using our All-in-One Screener, one of our major Premium features.
Disclosure: The author has no positions in the stocks mentioned. The number of gurus owning or buying shares discussed in this article are based on the December 2019 13-F portfolio filings from 55 hedge fund gurus. Such numbers do not include data from gurus not among the 55 screened or during the first quarter.
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