The $21.6 billion T. Rowe Price Equity Income Fund announced Tuesday that it added four new stocks from disparate industries to its portfolio in the third quarter.
The fund added Alaska Air Group Inc. (ALK, Financial), Evergy Inc. (EVRG, Financial), SL Green Realty Corp. (SLG, Financial) and AT&T Inc. (T, Financial), each making up less than 1% of the diversified portfolio. It has an outsized 26% weighting in financial services, followed by more even distribution across other sectors. The next largest is health care at 12.4% and energy at 11.2%.
John Linehan has managed the Equity Income Fund since taking over for Brian Rogers, who departed in 2015 after overseeing the fund for 30 years since its inception in 1985.
According to a semi-annual report, “The Equity Income Fund seeks to buy well-established, large-cap companies that have a strong record of paying dividends and appear to be undervalued by the market. The fund’s holdings tend to be solid, higher-quality companies that are going through a period of underperformance, reflecting our dual focus on valuation and dividend yield.”
Though the fund managers favor company fundamentals over macroeconomic predictions, they said they expect more volatility ahead as a result of President Trump’s tariffs, which “could spiral into a broader conflict and unleash protectionist measures in other economies.” Managers would welcome volatility, though, and it would allow them to purchase stocks at lower prices.
At the end of the third quarter, the fund held 102 stocks with a value of $20 billion. Its largest holdings are JPMorgan Chase & Co. (JPM, Financial), Wells Fargo & Co. (WFC, Financial) and Exxon Mobil Corp. (XOM, Financial).
New buys
Alaska Air Group Inc. (ALK, Financial)
The fund purchased 1.63 million shares of the company, which had a third-quarter average share price of $62. The holding represented 0.49% of the portfolio.
Alaska Air Group Inc. has a market cap of $7.86 billion; its shares were traded around $63.86 with a price-earnings ratio of 9.46 and price-sales ratio of 0.97. The trailing 12-month dividend yield of Alaska Air Group Inc. stocks is 1.97%. The forward dividend yield of Alaska Air Group Inc. stocks is 2.07%. Alaska Air Group Inc. had an annual average earnings growth of 27.80% over the past 10 years. GuruFocus rated Alaska Air Group Inc. the business predictability rank of 3.5-star.
The fund purchased 1,717,548 shares of the company, whose third-quarter share price averaged $53. The holding represented 0.48% of the portfolio.
Evergy Inc. has a market cap of $15.25 billion; its shares were traded around $56.14 Tuesday with a price-earnings ratio of 24.09 and price-sales ratio of 2.99. The trailing 12-month dividend yield of Evergy Inc. stocks is 2.94%. The forward dividend yield of Evergy Inc. stocks is 3.30%. Evergy Inc. had an annual average earnings growth of 3.30% over the past 10 years.
SL Green Realty Corp. (SLG, Financial)
The fund purchased 1.23 million shares of the company, whose share price averaged $98. The holding represented 62% of the portfolio.
SL Green Realty Corp. has a market cap of $8.02 billion; its shares were traded around $92.69 with a price-earnings ratio of 30.99 and price-sales ratio of 6.78. The trailing 12-month dividend yield of SL Green Realty Corp. stocks is 3.52%. The forward dividend yield of SL Green Realty Corp. stocks is 3.60%. SL Green Realty Corp. had an annual average earnings growth of 1.50% over the past 10 years.
The fund purchased 977,160 shares of the company, whose share price averaged $33 in the third quarter. The holding represented 0.16% of the portfolio.
AT&T Inc. has a market cap of $234.42 billion; its shares were traded around $32.39 with a price-earnings ratio of 6.32 and P/S ratio of 1.28. The trailing 12-month dividend yield of AT&T Inc. stocks is 6.18%. The forward dividend yield of AT&T Inc. stocks is 6.18%. AT&T Inc. had an annual average earnings growth of 1.60% over the past 10 years.
See the T. Rowe Price Equity Income Fund portfolio here.
Read more here:
Eddie Lampert’s Sears Files for Bankruptcy
