According to the All-in-One Screener, a Premium feature of GuruFocus, the T Rowe Price Equity Income Fund (Trades, Portfolio) and Yacktman Fund (Trades, Portfolio) agree on three stocks that have high financial strength and good dividend yield: Cisco Systems Inc. (CSCO, Financial), Johnson & Johnson (JNJ, Financial) and News Corp. (NWSA, Financial).
T Rowe Price fund profile
Baltimore-based T. Rowe Price Group Inc. (TROW, Financial) offers a broad range of domestic and international mutual funds. The Equity Income Fund, which is managed by John Linehan, invests in common stocks of established companies that are expected to pay dividends and are trading below fair value.
As of the end of the third quarter, the fund's $13.88 billion equity portfolio contains 107 stocks with eight new holdings and a turnover ratio of 3%. The fund's top three sectors in terms of weight are financial services, health care and industrials, representing 19.44%, 14.50% and 12.34% of the equity portfolio.
Yacktman Fund profile
Austin, Texas-based Yacktman Fund (Trades, Portfolio) also seeks long-term capital appreciation through investments in stocks where some of them pay dividends. Yacktman fund managers Stephen Yacktman and Jason Subotky look for companies with good businesses, shareholder-oriented management and low purchase prices.
As of the third-quarter-end, the fund's $5.21 billion equity portfolio contains 49 stocks, with one new position and a turnover ratio of 1%. The fund's top three sectors in terms of weight are technology, communication services and consumer staples, representing 23.75%, 23.33% and 22.13% of the equity portfolio.
As the two funds have similar investing strategies, they may have stocks in common. The All-in-One Screener found three common holdings that have a GuruFocus financial strength rank of at least 6 and a dividend yield of at least 1.1%.
Cisco Systems
The Equity Income Fund owns 5.37 million shares of Cisco, giving the position 1.52% equity portfolio weight. Likewise, the Yacktman Fund owns 1.4 million shares, giving the position 1.06% equity portfolio weight. Shares closed at $37.53; the company's dividend yield of 3.84% is near a 10-year high and outperforms 76% of global competitors.
GuruFocus ranks the San Jose, California-based hardware company's financial strength 6 out of 10 on the back of interest coverage and debt ratios outperforming over 61% of global competitors.
Cisco's profitability ranks 9 out of 10 on positive investing signs like a high Piotroski F-score of 9, a five-star business predictability rank and an operating margin that has increased approximately 3.70% per year on average over the past five years and is outperforming 97.11% of global competitors.
Johnson & Johnson
The Equity Income Fund owns 1.655 million shares of Johnson & Johnson, giving the stake 1.77% equity portfolio weight. Likewise, the Yacktman Fund owns 1 million shares, giving the position 2.86% equity portfolio weight. Shares closed at $142.25; the company's dividend yield of 2.75% outperforms 78% of global competitors.
GuruFocus ranks the New Brunswick, New Jersey-based drug manufacturer's financial strength 6 out of 10, driven primarily by a strong Altman Z-score of 4 and an interest coverage ratio in the triple digits despite debt-to-equity ratios underperforming over 72% of global competitors.
Johnson & Johnson's profitability ranks 8 out of 10 on the back of operating margins outperforming over 90% of global drug manufacturers despite declining approximately 2.9% per year on average over the past five years.
News
The Equity Income Fund owns 12.125 million shares of News, giving the position 1.22% equity portfolio weight. Likewise, the Yacktman Fund (Trades, Portfolio) owns 11.7 million shares, giving the position 3.15% equity portfolio weight. Class A shares closed at $15.16; the company's dividend yield of 1.33% underperforms 68% of global competitors.
GuruFocus ranks the New York-based company's financial strength 6 out of 10 on the back of interest coverage and debt-to-equity ratios outperforming approximately 52% of global competitors.
Disclosure: No positions.
Read more here:
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- Wallace Weitz Tones Down Intelligent Systems Stake
- Steven Romick's Top 5 Holdings as of the 3rd Quarter
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