Popular, Inc. (BPOP): A Defensive Gem Rises as Institutions Double Down

The addition of Popular, Inc. (BPOP) to the Russell 1000 Value-Defensive Index has positioned the bank as a prime example of stability-driven growth in an uncertain market. With a robust 25.4% year-to-date (YTD) price increase through early 2025 and institutional investors like Vanguard and Dimensional Fund Advisors bolstering their stakes, BPOP is emerging as a compelling play for investors seeking resilience and value.

YTD Performance: A Strong Start to the Year

BPOP's YTD gains—driven by its inclusion in the Russell 1000 Value-Defensive Index—reflect investor confidence in its defensive characteristics. The stock's price surged 25.4% from February 20, 2024, to February 18, 2025, before consolidating to a 17.49% return through June 2025. This resilience, despite broader market volatility, underscores BPOP's appeal as a financial services firm with a diversified portfolio in the Caribbean and U.S. markets.

Institutional Ownership: A Dance of Accumulation and Caution

Institutional ownership trends reveal a nuanced narrative of support. Vanguard increased its stake by 5.74% to 8.99 million shares, cementing its position as the largest institutional holder with 12.46% ownership. Dimensional Fund Advisors also raised its holdings by 1.35%, signaling optimism about BPOP's long-term prospects.

However, BlackRock's direct holdings remain opaque, though its affiliated funds showed mixed signals: the iShares Core Dividend Growth ETF cut its position by 4.57%, while the iShares Russell Mid-Cap ETF reduced its allocation by 2.54%. Meanwhile, legacy investors like Wellington Management and T. Rowe Price trimmed their stakes by over 50% and 6.78%, respectively—a reminder that not all institutions are bullish.

The Russell 1000 Value-Defensive Index Catalyst

BPOP's inclusion in the Russell 1000 Value-Defensive Index, which emphasizes stable, low-volatility firms in defensive sectors, is a strategic win. This index targets companies with consistent earnings, dividend payouts, and low beta—traits BPOP exemplifies. The move will likely attract passive inflows from index-tracking ETFs, potentially boosting demand for the stock.

Fund Sentiment: A Net Positive

While the Fund Sentiment Score isn't explicitly measured, institutional behavior suggests a cautiously optimistic outlook. Active funds like Geode Capital Management increased their holdings, while passive funds such as Vanguard's Extended Market Index Fund maintained steady allocations. Even as some investors reduced exposure, the net flow remains upward, reflecting BPOP's defensive profile in an era of economic uncertainty.

Why Investors Should Take Notice

BPOP's 25.4% YTD gains up to February, followed by a consistent rise to 17.49% through June, highlight its ability to outperform during market swings. Its inclusion in the Russell 1000 Value-Defensive Index adds a structural tailwind, while its 0.7% dividend yield (as of May 2025) offers income stability.

The mixed institutional moves—Vanguard's confidence versus BlackRock's hesitancy—shouldn't deter investors. The net accumulation by key players and BPOP's defensive moat suggest it's a stock poised to weather macroeconomic headwinds.

The Investment Case

For investors seeking a balance of growth and stability, BPOP offers an intriguing entry point. Its YTD performance, defensive positioning, and institutional backing make it a standout in the financial sector. While the stock's near-term volatility remains possible, its inclusion in the Russell index and resilient earnings profile justify a strategic allocation.

Final Verdict: A Defensive Play with Growth Legs

BPOP is more than a dividend stock—it's a hybrid of stability and growth. With a 12.46% stake from Vanguard and a strategic index inclusion, the stock is primed to attract both passive and active investors. While caution is warranted with any financial holding, BPOP's diversified operations and defensive traits make it a compelling candidate for portfolios seeking to navigate 2025's choppy waters. Consider adding BPOP to your holdings as a defensive core position with upside potential.