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CVR Energy, Inc. (CVI), American Railcar Industries, Inc. (ARII): Billionaire Carl Icahn’s Top Dividend Picks

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Billionaire Carl Icahn is the CEO of Icahn Capital LP, a fund with an equity portfolio worth around $32.05 billion, as of the end of March. According to Forbes, Carl Icahn has a net worth of around $22.3 billion, which makes him the 31st self-made billionaire in the world. Mr. Icahn’s Icahn Capital LP has disclosed its latest 13F with the SEC, revealing a total of 20 long positions held at the end of the first quarter. The fund’s portfolio is diversified across sectors, with technology and industrials amassing over 60% of the total value. Mr. Icahn is an activist investor, therefore he prefers to invest in either underperforming or undervalued companies and then push for changes that would unlock shareholder value. Nevertheless, since Mr. Icahn invests also in many leading companies from their respective industries, he also has significant gains from the dividends on his holdings. In this article, we will take a look at three companies with highest dividend yield, in which Mr. Icahn disclosed a stake in his latest 13F.

Carl Icahn - Icahn Capital Lp

Icahn Capital LP is one of more than 700 investors that we track as part of our small-cap strategy. Through a series of backtests, we found out that imitating a portfolio of 15 most popular small-cap picks among them can generate gains on average around 1.0 percentage points in excess of the S&P 500 Total Return Index’s monthly return. Moreover, these small-cap picks had an alpha of around 80 basis points per month, compared with 50 most popular large-cap stocks among hedge funds that had a monthly alpha of about six basis points. This strategy managed to post gains over 137% in the last 2.5 years since we started following it in real time, outperforming the S&P 500 ETF (SPY) by over 80 percentage points (read more details here).

In the next sections, we will analyze the Carl Icahn’s top picks that have the highest dividend yields. On the first spot is CVR Energy, Inc. (NYSE:CVI), a diversified holding company specialized in manufacturing industries as petroleum refining and nitrogen fertilizer. Mr. Icahn’s stake in CVR Energy, Inc is the third-largest in terms of value and contains 77.20 million shares, worth around $3.15 billion, which represent around 80% of the company. The $3.4 billion company has paid a quarterly cash dividend of $0.50 for the last two quarters, compared to $0.75 paid for the third quarter of 2014, which gives the stock a dividend yield of 5.18%. CVR Energy’s stock dropped by 15.47%, during the last 52 weeks, affected by the fall of the oil price. Among other funds that we track, the largest shareholders of CVR Energy, Inc (NYSE:CVI) are Gotham Asset Management, managed by Joel Greenblatt, with 229,957 shares, worth $9.79 million and Ken Griffin‘s Citadel Investment Group that increased its position to 229,882 shares from 58,087 shares, valued at $9.78 million.

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