In the prevalent low interest rate environment, dividend stocks have become increasingly popular among retail investors. However, many lose sight of the risks involved with investing in companies that offer an exceptionally high dividend yield, and also face difficulty in selecting companies that provide the least level of risk given a particular dividend yield. To put these concerns to rest we looked into the latest 13F filing of one of the greatest investor of our times, George Soros of Soros Fund Management, and extracted three of his most valuable positions including Dow Chemical Co (NYSE:DOW), General Motors Company (NYSE:GM), and LyondellBasell Industries NV (NYSE:LYB), having a dividend yield higher than 3%. Earlier, we also formulated a list of the most popular dividend stocks among over 700 hedge funds that we track, that sport a dividend yield of more than 4%.
George Soros is widely known in investment circles as ‘the Man Who Broke the Bank of England’ in light of his $10 billion bet in 1992 when he sold short the British pound. He made a $1 billion as the bank caved in. Soros Fund Management founded in 1969, calls its main series of hedge funds, Quantum Group of Funds. The 84 year old money manager believes in the investment philosophy of ‘reflexivity’, which entails that owing to emotional biases of market participants good investment opportunities can be found by carefully studying the value and market prices of assets. In 2010 the investment firm was reported to be one of the most successful in the world, delivering an average annual return of more than 20% for four decades. The fund’s holdings are primarily concentrated in two sectors namely, information technology which accounts for 28% of the holdings and health care contributing 18% to the portfolio value.
Dow Chemical Co (NYSE:DOW) was Soros’ favorite among high dividend stocks as he increased his stake in the company by 77% to 5.18 million shares valued at $236.43 million. The company which is a worldwide manufacturer and supplier of products used primarily as raw materials in the manufacture of customer products and services increased its quarterly dividend from $0.37 to $0.42 in the fourth quarter to take its dividend yield to 3.59%. This is also the highest yield as compared with other companies on this list. Moreover, Dow Chemical Co (NYSE:DOW) has consistently increased its dividends since 2011.
Dan Loeb of Third Point and Oz Management’s Daniel S. Och owned 22 million shares valued at $1.0 billion and 13.7 million shares valued at $624.93 million respectively at the end of the fourth quarter. Dow Chemical Co (NYSE:DOW) and Saudi Arabian Oil Co. recently announced plans to move ahead with production in their $20 billion Sadara Chemical joint venture project.