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A Look At Billionaire Julian Robertson’s Top Dividend Picks

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Hedge fund legend Julian Robertson closed his hedge fund Tiger Management to outside investors way back in 2000 and has been using it as a vehicle to manage his own money since then. In the last 16 years that the fund has been closed to outside investors, its performance is unknown. However, if one takes a look at the estimated net worth of the octogenarian financier over the years, one can get a fair idea about Tiger Management’s performance during that time. According to Forbes, Mr. Robertson’s estimated net worth increased from $400 million in 2003 to $3.4 billion in May 2015,which means a gain of 750% in 12 years. Even if one discounts a large part of that gain as profits he has accumulated from seeding and investing in other hedge funds, the rest of it still points towards Tiger performing phenomenally well over that 12-year timeframe. Mr. Robertson has always been considered a great stock picker and has famously been quoted as saying:

“Our mandate is to find the 200 best companies in the world and invest in them, and find the 200 worst companies in the world and go short on them. If the 200 best don’t do better than the 200 worst, you should probably be in another business.”

With that kind of an aim, it’s clear that when Mr. Robertson decides to buy a stock, his decision is based mostly on the stock’s upside potential rather than factors like forward yield. However, some of his stock picks in recent years have included companies that boast a decent forward yield, which could make them doubly rewarding for dividend investors. Taking that into account, in this article we’ll take a look at five stocks that were a part of Tiger Management’s equity portfolio entering the fourth quarter and which currently sport an annual dividend yield of more than 2.5%.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Julian Robertson

#5 MGM Growth Properties LLC (NYSE:MGP)

– Shares Held By Tiger Management (as of September 30): 40,000

– Value of The Holding (as of September 30): $1.04 Million

Let’s start with MGM Growth Properties LLC (NYSE:MGP), in which Tiger Management reduced its stake by 31% during the third quarter. MGM Growth Properties LLC (NYSE:MGP), a captive REIT of MGM Resorts International (NYSE:MGM), had its IPO in April and since then its stock has appreciated by 17.7%. In September, the company declared a quarterly dividend of $0.3875, which based on its current stock price translates into a forward yield of 6.27%. For its fiscal 2016 third quarter, MGM Growth Properties reported EPS of $0.48 on revenue of $154.8 million, missing analysts estimates by $0.01 and $15.34 million, respectively. On November 22, analysts at Buckingham Research initiated coverage on the stock with a ‘Buy’ rating.

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#4 Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD)

– Shares Held By Tiger Management (as of September 30): 10,919

– Value of The Holding (as of September 30): $1.43 Million

Tiger Management upped its stake in German brewing major Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD) by 16% during the third quarter. Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD)’s stock has taken a massive beating in the last month and owing largely to that, is currently trading down by 16.58% year-to-date. Nevertheless, this decline has been beneficial in the sense of pushing the stock’s forward yield higher, as it now stands at 3.88%. The recent downturn in the stock has been the result of a multitude of factors including the company missing analysts’ revenue and EPS estimates with its third quarter results, a surge in the treasury and dollar rates following billionaire Donald Trump’s election victory, as well as concerns about the next acquisition that the company will make. The Street has been rife with rumors over the past couple of weeks that Anheuser Busch Inbev is contemplating the purchase of Coca-Cola (NYSE:KO). However, most analysts believe that an acquisition of that enormous size would be difficult for the brewer to pull off due to financial constraints and regulatory hurdles.

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We’ll check out three more of Robertson’s favorite dividend stock picks on the next page.

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