Alphabet (GOOG) led the S&P’s communications sector gains

Investment management firm ClearBridge Investments has released its “ClearBridge Dividend Strategy” investor letter for the second quarter of 2024. You can download a copy here . The S&P 500 rose 4.3% in the second quarter, representing a half-year gain of 15.3%. The quarter’s performance was almost entirely driven by the information technology (or “IT”) sector. The firm has an optimistic view of the economy and does not expect a recession anytime soon, despite a slowdown in activity. The strategy underperformed the S&P 500 in the second quarter. The strategy gained four of the 11 sectors it invested in during the quarter on an absolute basis. The IT sector was the main positive driver, while the materials and financials sectors pulled back. Stock selection and sector allocation pulled back, relative to the previous quarter. See the strategy’s top five holdings to see its top picks for 2024.

ClearBridge Dividend Strategy highlighted stocks like Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through its Google Services, Google Cloud, and Other Bets segments. Alphabet Inc. (NASDAQ:GOOG)’s one-month return was 5.83%, and its stock has gained 52.81% of its value over the past 52 weeks. On July 3, 2024, Alphabet Inc. (NASDAQ:GOOG) stock closed at $187.3 per share with a market capitalization of $2.305 trillion.

ClearBridge Dividend Strategy stated in its Q2 2024 investor letter that Alphabet Inc. (NASDAQ:GOOG):

The growth in communication services in the S&P 500 index was mainly driven by Alphabet Inc. (NASDAQ:GOOG) (also known as Google). The company has dominant positions in internet search and video advertising, and a solid cloud services business. Alphabet’s dividend initiation this quarter allowed us to take a small position. We see continued significant revenue opportunities from AI innovations in our segments and may look to increase our stake over time. Alphabet’s exceptional balance sheet and improving cost efficiency further reinforce its strong position and growth prospects, and we expect its dividend to grow rapidly over time.

The recent additions of Alphabet and Meta reflect the benefits of our flexible approach to dividends.. Our active (as opposed to formulaic) approach to dividends has allowed us to move quickly and buy stocks shortly after each dividend is declared. Over the years, our agile approach to dividend investing has often allowed us to profit from long-term investments in fast-growing technology companies that many passive or formulaic dividend investors likely miss (e.g. American Tower, Mastercard, Meta, Visa).

Google

Alphabet Inc. (NASDAQ:GOOG) ranks 7th on our list of the 31 most popular stocks among hedge funds. According to our database, 165 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter, up from 166 in the previous quarter. Alphabet Inc.’s (NASDAQ:GOOG) revenue for the trailing 12 months is $318.15 billion, with a quarterly year-over-year growth rate of 15.40%. While we recognize the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our belief is based on the belief that AI stocks offer a better chance of achieving higher returns in a shorter time frame. If you’re looking for AI stocks that are as promising as NVIDIA but are trading at less than 5 times earnings, check out our report on cheapest AI action.

We covered Alphabet Inc. (NASDAQ:GOOG) in another article and shared the biggest AI stories and ratings updates you shouldn’t miss this week. Also, check out our Q1 2024 Hedge Fund Investor Letters page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article was originally published on The initiated monkey.