In this article, we will discuss the 10 Best Dividend Stocks to Buy According to Billionaire Izzy Englander.
Israel Englander, the founder of Millennium Management, was born in Brooklyn. He joined a religious school for his early education and later went to New York University for his undergraduate degree.
From an early age, Englander expressed great interest in the stock market. While in high school, Englander began trading in stocks at Oppenheimer. Later in 1989, he, together with Ronald Shear, founded Millennium Management. He is the co-founder and current CEO of Millennium Management.
Millennium Management has grown over the years, and today it’s one of the leading investment management companies. The firm’s 13F portfolio is valued at approximately $139.75 billion as of the end of the first quarter.
Millennium Management uses a multi-strategy investment approach to minimize risks. The approach guarantees positive performance even during adverse economic times. For instance, in 2000 the hedge fund gained 36% returns on less than $2 billion of the invested capital. While in 2020, Englander’s hedge fund gained about 23.3%. In 2020, Englander received $3.8 billion from the fund, becoming the highest-paid hedge fund manager.
A notable company in Izzy Englander’s portfolio is Microsoft Corporation (NASDAQ: MSFT), in which the fund owns 1.99 million shares, worth over $469 million. Investors are responding to the news that Microsoft Corporation (NASDAQ: MSFT) is all set to reveal its next generation of Windows products. On June 21, shares of the software maker touched an all-time high. Microsoft finished the day higher at $262.63, up 1.2% from its previous close. On June 16, the company declared its quarterly dividend of $0.56 per share, in line with the previous. On June 18, Bloomberg reported that Microsoft Corporation plans to open up four new data centers in China before 2022. Currently, Microsoft Corporation has six data centers in China.
Another notable stock in Izzy Englander’s portfolio is Amazon.com, Inc. (NASDAQ: AMZN). The investor owns a $1.1 billion stake in the company. On June 21, Bloomberg reported that the tech company is planning to buy as much as 20% stake in self-driving truck startup Plus. Amazon will buy Plus’ preferred shares through a warrant at a price of about 47 cents per share.
Billionaire Izzy Englander also has a stake in Facebook, Inc. (NASDAQ: FB), in which the fund owns 2.30 million shares worth $676.33 million. On June 21, Facebook, Inc. (NASDAQ: FB) announced that it plans to launch its Clubhouse rival, live audio rooms, with selected exclusive podcasts available to U.S. Facebook, Inc. users. On June 2, KGI Securities initiated coverage on Facebook, Inc. with an “Outperform” rating and a price target of $420.00. While on June 11, Facebook bought BigBox VR, maker of the virtual reality game “Population: One,” for an undisclosed amount. Facebook, Inc. ranks 1st in our list of the 30 Most Popular Stocks Among Hedge Funds.
In this article, however, our focus would be on dividend-paying stocks in billionaire Izzy Englander’s Q1 portfolio.
Israel Englander of Millennium Management
Diversifying your portfolio and investing in strong dividend stocks is extremely important, especially during turbulent times like these when even the smart money is struggling. The hedge fund industry’s reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context and industry outlook in mind, let’s start our list of the 10 best dividend stocks to buy according to billionaire Izzy Englander. We picked stocks with high yields and strong fundamentals from the Q1 portfolio of Englander.
10 Best Dividend Stocks to Buy According to Billionaire Izzy Englander
10. EnLink Midstream, LLC (NYSE: ENLC)
Number of Hedge Fund Holders: $1,535,000
Percentage of Izzy Englander’s 13F Portfolio: 0.001%
Dividend Yield: 6.61%
Number of Hedge Fund Holders: 11
EnLink Midstream, LLC (NYSE: ENLC) supplies midstream energy services in the United States. The company was founded in 2013 and is placed tenth on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. EnLink stock has returned more than 125.46% to investors during the course of the past twelve months.
In June, the stock was upgraded at Raymond James to “Outperform” from “Market Perform” with a price target of $7.50. On April 19, EnLink Midstream, LLC declared a quarterly dividend of $0.09375 per share in line with the previous. The forward yield is 6.61%.
In Q1 2021, Millennium Management increased its stake in the stock by around 15% to 357,855 shares. In Q1 2021, 11 hedge funds in Insider Monkey’s database of 887 funds held stakes in EnLink Midstream, LLC, compared to 8 funds in Q4 2020. Arrowstreet Capital is the company’s most significant stakeholder, with 2.97 million shares worth $12.75 million.
9. PennantPark Investment Corporation (NASDAQ: PNNT)
Englander’s Stake Value: $1,249,000
Percentage of Izzy Englander’s 13F Portfolio: 0.001%
Dividend Yield: 7.22%
Number of Hedge Fund Holders: 8
PennantPark Investment Corporation (NASDAQ: PNNT) is a business expansion company. The company was incorporated in 2007 and stands ninth on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. PennantPark currently has a $460.6 million market capitalization. It delivered a 99.85% return in the past 12 months.
Just like Microsoft Corporation, Amazon.com, Inc., and Facebook, Inc., PennantPark is one of the best stocks to buy according to Izzy Englander. On June 2, the company declared a quarterly dividend of $0.12 per share, inline with the previous. The dividend yield is 7.22%. Last month, PennantPark announced Q2 2021 net investment income per share of $0.13, missing the market predictions by $0.05. Total investment income over the period was $19.2 million, down 30.3% YoY, beating the estimates by $0.04 million.
Millennium Management holds 221,063 shares of the company, worth $1.25 million. In Q1 2021, 8 hedge funds in the database of Insider Monkey held stakes worth $22.10 million in PennantPark Investment Corporation, same as the preceding quarter worth $19.29 million.
8. KKR Real Estate Finance Trust Inc. (NYSE: KREF)
Englander’s Stake Value: $2,618,000
Percentage of Izzy Englander’s 13F Portfolio: 0.001%
Dividend Yield: 7.76%
Number of Hedge Fund Holders: 7
KKR Real Estate Finance Trust Inc. (NYSE: KREF) provides personalized, structured loans operated by experienced and well-capitalized sponsors. The company was founded in 2014 and ranks eighth on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. KKR Real Estate Finance Trust Inc. currently has a $1.23 billion market capitalization and was able to deliver a 29.81% return in the past 12 months.
Recently, the company declared a quarterly dividend of $0.43 per share, in line with the previous. The forward yield is 7.58%. On April 28, JMP Securities analyst Steven DeLaney initiated a coverage on the stock, rating it as “Market Outperform” with a price target of $21.50.
KKR Real Estate Finance Trust Inc. is a new arrival in Izzy Englander’s portfolio, as his hedge fund bought about 142,374 shares of the company, worth $2.62 million. In Q1 2021, 7 hedge funds in Insider Monkey’s database of 887 funds held stakes in KKR Real Estate Finance Trust Inc., compared to 4 funds in Q4 2020.
Just like Microsoft Corporation, Amazon.com, Inc., and Facebook, Inc., KKR Real Estate Finance Trust Inc. is one of the best stocks to buy according to Izzy Englander.
7. Nordic American Tankers Limited (NYSE: NAT)
Englander’s Stake Value: $139,000
Percentage of Izzy Englander’s 13F Portfolio: 0.001%
Dividend Yield: 8.14%
Number of Hedge Fund Holders: 10
Nordic American Tankers Limited (NYSE: NAT) is a tanker company, which obtains and authorizes double-hull vessels internationally. It was incorporated in 1995 and is placed seventh on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. Nordic American Tankers Limited has offered investors 14.92% in returns year-to-date.
Just like Microsoft Corporation, Amazon.com, Inc., and Facebook, Inc., Nordic American is one of the best stocks to buy according to Izzy Englander. On June 2, Nordic American declared a quarterly dividend of $0.20 per share in line with the previous. On April 14, board director Alexander Hansson purchased 40,000 shares at $3.16. On May 25, Evercore ISI analyst Jonathan Chappell upgraded Nordic American Tankers Limited from “Underperform” to “In Line,” with a $4 price target.
Billionaire Izzy Englander initiated a new stake in Nordic American Tankers Limited in Q1 2021, buying 42,640 shares of the company, worth $139,000. In Q1 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $7.11 million in Nordic American Tankers Limited, up from 5 the preceding quarter worth $7.56 million.
6. Antero Midstream Corporation (NYSE: AM)
Englander’s Stake Value: $3,379,000
Percentage of Izzy Englander’s 13F Portfolio: 0.0024%
Dividend Yield: 8%
Number of Hedge Fund Holders: 17
Antero Midstream Corporation (NYSE: AM) operates midstream energy infrastructure. The company was incorporated in 2013 and is ranked sixth on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. Antero Midstream Corporation has returned 80.07% to investors over the past year.
On May 24, the company announced that it issued 5.375% senior unsecured notes due 2029, whose upsized principal amount is $750 million. The net proceeds will be used to fund the retrieval of all $650 million aggregate principal amount of its 5.375% senior notes due 2024 and repay its debts. On April 28, the company declared its Q1’2021 revenue of $224.12 million, down 8.0% YoY, but beating the estimates by $1.53 million.
Izzy Englander’s hedge fund owns 374,142 shares of the company, worth over $3.38 million. There were 17 hedge funds in our database that held stakes in Antero Midstream Corporation in Q1 2021, compared to 19 funds in the previous quarter. Brave Warrior Capital is the company’s most significant stakeholder, with 3.48 million shares worth $31.44 million.
In its Q4 2020 investor letter, Bonhoeffer Capital Management highlighted a few stocks, and Antero Midstream was one of them. Here is what the fund said:
“Public LBOs (32% of Portfolio; Quarterly Average Performance +25%)
This includes our broadcast TV franchises, leasing and roll-on/roll-off (RORO) shipping, and our natural gas pipeline firm. One trend in these levered firms is the increasing spread between bond yields and the firms’ free cash flow yield.
An example is Antero Midstream, whose FCF yield was 15% as of December 31, 2020, with a debt yield of 6% with the bond/equity FCF spread of 9%. This is a large spread given that Antero Midstream has completed its backbone infrastructure and gathering investment and capital expenditures should be small going forward. With natural gas prices rebounding, Antero Midstream cash flows become more secured as Antero Resources has more cash flow cushion in making payments to Antero Midstream. The recovery in natural gas prices is expected to continue as the economy opens up and low oil prices have shut down Permian oil wells that were generating almost-free associated natural gas. Antero Midstream’s FCF yield of 15% is also higher than similarly secured Antero subordinated debt with a yield of 7.8%.”
5. Ares Commercial Real Estate Corporation (NYSE: ACRE)
Englander’s Stake Value: $10,304,000
Percentage of Izzy Englander’s 13F Portfolio: 0.001%
Dividend Yield: 9.13%
Number of Hedge Fund Holders: 14
Ares Commercial Real Estate Corporation (NYSE: ACRE) is an American real estate investment trust. The company was founded in 2011 and is placed fifth on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. Ares currently has a $695.15 million market capitalization and was able to deliver a 57.74% return in the past 12 months.
On May 4, Ares Commercial posted earnings for the first quarter of 2021. Revenue in the period was $21.22 million, up 0.4% YoY, beating the estimates by $2.83 million. Ares Commercial has also paid consistent dividends over the last several years. Recently, Ares Commercial declared quarterly dividend of $0.33 per share. The company declared a supplemental cash dividend of $0.02 per share. On February 2, BTIG initiated coverage on Ares Commercial with a “Buy” rating and a price target of $13.50.
There were 14 hedge funds in our database that held stakes in Ares Commercial in Q1 2021, compared to 8 funds in the previous quarter. Millennium Management is the Ares Commercial Real Estate Corporation’s most significant stakeholder, with 751,044 shares worth $10.30 million.
4. Gilat Satellite Networks Ltd. (NASDAQ: GILT)
Englander’s Stake Value: $3,585,000
Percentage of Izzy Englander’s 13F Portfolio: 0.001%
Dividend Yield: 9.79%
Number of Hedge Fund Holders: 8
Gilat Satellite Networks Ltd. (NASDAQ: GILT) provides satellite-based wireless communication solutions and services along with its subsidiaries. The company was founded in 1987 and is ranked fourth on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. Gilat shares have gained about 53.79% in value over the last 12 months.
On June 3, Gilat Satellite announced that Pronatel awarded it a $13 million contract to deliver free WI-FI services over two years to hundreds of sites in Peru. On May 26, Gilat Satellite announced the extension of its multi-million-dollar IoT project in Latin America. Gilat provides the 4G network expansion to support agriculture, with a connectivity of machines that require controlling and observing harvesters and agricultural tractors.
Gilat is a new addition in Izzy Englander’s hedge fund’s portfolio, as Millennium Management bought 342,699 shares of the company, worth $3.59 million. Hedge funds are loading up on Gilat, as Insider Monkey’s data shows that 8 hedge funds held stakes in the company in Q1 2021, compared to 5 funds in the previous quarter.
3. Höegh LNG Partners LP (NYSE: HMLP)
Englander’s Stake Value: $1,121,000
Percentage of Izzy Englander’s 13F Portfolio: 0.001%
Dividend Yield: 10.21%
Number of Hedge Fund Holders: 7
Höegh LNG Partners LP (NYSE: HMLP) offers liquid natural gas services under long-term charters. The company was incorporated in 2014 and is placed third on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. Höegh stock has offered investors returns of 17.82% over the course of the past twelve months.
On May 27, the company posted quarterly earnings per share of $0.59 for Q1 2021, beating market predictions by $0.19. The company also declared revenue of $34.78 million, down 5.2% YoY, missing the estimates by $0.7 million. Höegh is a decent dividend-paying stock. On April 22, Höegh declared a quarterly dividend of $0.44 per share, in line with the previous. The forward yield is 10.03%.
Millennium Management increased its stake in Höegh by 278% in Q1 2021, with $1.12 million worth of the company’s stock. In Q1 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $18.93 million in Höegh LNG Partners LP, up from 6 the preceding quarter worth $ 16.30 million.
2. Sculptor Capital Management, Inc. (NYSE: SCU)
Englander’s Stake Value: $3,735,000
Percentage of Izzy Englander’s 13F Portfolio: 0.002%
Dividend Yield: 10.61%
Number of Hedge Fund Holders: 17
Sculptor Capital Management, Inc. (NYSE: SCU) was incorporated in 1994 and is ranked second on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. Sculptor Capital currently has a $1.44 billion market capitalization and was able to deliver a 95.97% return in the past 12 months.
Sculptor Capital has also paid consistent dividends over the last several years. On May 14, the company declared its quarterly dividend of $0.30 per share. The dividend yield is 10.61%. On May 5, Sculptor Capital announced its Q1 2021 earnings per share of $0.62, beating market predictions by $0.23. The revenue for the first three months of 2021 was $123.3 million, up 55.7% YoY, beating the estimates by $33.08 million.
Millennium Management reduced its stake in Sculptor Capital in Q1 2021 by 3.32%. In Q1 2021, 17 hedge funds in the database of Insider Monkey held stakes worth $.90.52 billion in Sculptor Capital Management, Inc., same as the preceding quarter worth $ 73.29 million.
1. FS KKR Capital Corp. (NYSE: FSK)
Englander’s Stake Value: $1,347,000
Percentage of Izzy Englander’s 13F Portfolio: 0.001%
Dividend Yield: 10.96%
Number of Hedge Fund Holders: 15
FS KKR Capital Corp. (NYSE: FSK) is a business development company focusing on investments in fixed-income securities. It was founded in 2007 and is placed first on the list of 10 best dividend stocks to buy according to billionaire Izzy Englander. FS KKR Capital stock has returned 51.02% to investors over the course of the past four weeks.
On May 10, FS KKR Capital declared a quarterly dividend of $0.60 per share, in line with the previous. With a dividend yield of 10.96% and a market cap of $6.14 billion, FS KKR is one of the best dividend stocks to buy based on Izzy Englander’s Q1 portfolio. On May 10, FS KKR Capital announced its Q1 2021 total investment income of $151 million, down 15.6% YoY, beating the estimates by $1.18 million.
Millennium Management trimmed its stake in the stock by around 47% to 67,903 shares in the first quarter of 2021. Out of the hedge funds being tracked by Insider Monkey, Beach Point Capital Management is a leading shareholder in FS KKR Capital Corp. with 2.42 million shares worth $48.03 million.
You can also take a peek at Billionaire Andreas Halvorsen’s Top Stock Picks and Billionaire Lee Ainslie’s Top 10 Stock Picks.
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This article is originally published at Insider Monkey.
