In reviewing billionaire Steve Cohen and SAC Capital’s big shakeups last quarter, we at Insider Monkey found five dividend stocks that Cohen and his $14 billion hedge fund own. A couple of them are under-the-radar stocks and could be great additions to anyone looking to add an income and growth stock to their portfolio.
One of Cohen’s largest positions – 14th in his 4Q portfolio — is the dividend paying oil and gas company Occidental Petroleum Corporation (NYSE:OXY), which pays a 3.2% dividend yield.
Last quarter, Occidental Petroleum Corporation (NYSE:OXY) managed to beat estimates thanks to stronger sales and higher fuel prices. This marks the third quarter in a row that the company surpassed expectations. It also has a relatively strong balance sheet, with a debt-to-capital ratio of only 16%.
The oil and gas company also managed to generate $11.3 billion in cash flow from operations last quarter, while spending $10.2 billion on capital expenditures.
The other positive for the company is its greater exposure to the higher-margin upstream business after re-positioning itself by divesting its non-core assets. Now the company has a higher weighting toward low-risk and longer-reserve-life properties. Occidental Petroleum Corporation (NYSE:OXY) also happens to be one of billionaire T. Boone Pickens’ newest additions.
The other of Cohen’s major oil-and-gas dividend payers is Petroleo Brasileiro Petrobras SA (NYSE:PBR), paying the highest dividend of the five at a 5.9% yield. Petroleo Brasileiro Petrobras SA (NYSE:PBR) is a Brazil-based company and the largest publicly-traded Latin American oil company. It produces nearly all of Brazil’s crude oil and natural gas, making the company a semi-monopoly in Brazil.
Petroleo Brasileiro Petrobras SA (NYSE:PBR) managed to post a decent fourth quarter after missing expectations horribly in the 2Q and 3Q. Higher expected fuel prices and a development pipeline that includes various exploration successes are all tailwinds for the company.
EnCana Corporation (USA) (NYSE:ECA) also pays a sturdy dividend yield at 4.2%. EnCana Corporation (USA) (NYSE:ECA) is a North American energy producer, including the transportation and marketing of natural gas, oil and natural gas liquids (NGLs). The company also has one of the largest natural gas resource portfolios in North America.
It should perform nicely over the long-term as demand for natural gas rises, but the weakness in current natural gas prices appears to have provided a solid buying opportunity.
Meanwhile, the company has been focusing on increasing its liquids exposures, as well as taking an active stake in the up-and-coming areas, such as the Horn River Basin in northeastern British Columbia and the Haynesville shale across Texas and Louisiana.
EnCana has also been active disposing of under-performing assets. The net proceeds received from property sales totaled more than $1.5 billion in 2011 and then $4 billion in 2012. This helped the energy company end 2012 with $3.2 billion in cash, well in excess of its $2.5 billion target.
Texas Instruments Incorporated (NASDAQ:TXN) pays one of the lower dividend yields at 3.2% but also has robust growth prospects. The company designs and makes semiconductors, which it then sells to electronics designers and manufacturers. It has sales operations in more than 35 countries, with an impressive exposure to fast-growing Asia, which accounted for around 60% of 2012 total revenue.
As part of the company’s growth strategy, it plans to focus on longer-life cycle products to help reduce dependence on smartphones and tablets. Texas Instruments Incorporated (NASDAQ:TXN) not only has a diverse product portfolio, but also a diverse mix of end market customers, ones that includes communications, which comprised 30% of 2012 revenue, industrial, which made up 17% of sales, computing at 25%, auto at 11% and consumer, which accounted for 13% of last year’s revenue. Texas Instruments is also a big-name tech stock paying a solid dividend.
Cablevision Systems Corporation (NYSE:CVC) pays a 4% dividend yield. Cablevision Systems Corporation (NYSE:CVC) owns and operates cable television systems, providing regional news and advertising sales services for the cable television industry. The company is coming off a challenging 2012, which includes the impact of super-storm Sandy. However, it still plans to keep capital expenditures high in an effort to build up its network for 2013.
In the fourth quarter, the company posted an EPS loss of $0.32 versus the loss expectations of only $0.19. The wider loss was due to a larger-than-expected impact from super storm Sandy and has put the stock trading relatively flat year-to- date, which appears to offer investors a solid entry point.
Cablevision also trades rather cheap compared to major peers at only 0.6 times sales, versus Time Warner Cable’s 1.3 times, Charter Communications, which trades at 1.4 times sales, and Comcast’s 1.7 times.
In the end
Steve Cohen made a lot of moves in the fourth quarter, including shaking up his top-five stocks completely and adding a number of new stocks, but he also has some interesting dividend picks; these include five stocks paying a dividend yield between 3% and 6%.
He likes a couple of top oil-and-gas companies, an energy producer, cable company and of course the semi-conductor pick, Texas Instruments, all of which appear to be solid dividend stocks worth pursuing.
The article 5 Dividend Picks From Billionaire Steve Cohen originally appeared on Fool.com and is written by Marshall Hargrave.
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