10 Best Dividend Stocks to Buy According to John Khoury’s Long Pond Capital

In this article, we will discuss the 10 best dividend stocks to buy according to John Khoury’s Long Pond Capital. If you want to skip our detailed analysis of Khoury’s history, investment philosophy, and hedge fund performance, go directly to the 5 Best Dividend Stocks to Buy According to John Khoury’s Long Pond Capital.

John Peter Khoury is the portfolio manager of Long Pond Capital. The hedge fund is based in the New York City. Long Pond Capital primarily focuses on long/short equity investments in the real estate sector. The real estate sector accounts for over three-fourth of the hedge fund’s total asset allocations.

The firm’s 13F portfolio is valued at nearly $2.93 billion as of the end of the first quarter of 2021. In 2020 the hedge fund posted a return of 40.65% compared to the 18.25% return posted by SPDR S&P 500 ETF Trust (NYSE: SPY).

As of the first quarter of 2021, John Khoury’s Long Pond Capital holds shares in several big companies like Hilton Worldwide Holdings Inc. (NYSE: HLT), AvalonBay Communities, Inc. (NYSE: AVB), and Equity Residential (NYSE: EQR).

John Khoury initiated a new stake in Hilton Worldwide Holdings Inc. (NYSE: HLT) in the first quarter, buying 315K shares of the company, worth $38.09 million. Shares of the company rallied 49.87% in the last 12 months, resulting in a $33.35 billion market capitalization. On May 6, Raymond James analyst William Crow raised Hilton Worldwide Holdings Inc. (NYSE: HLT)’s price target to $135 from $125 and kept an “Outperform” rating on the shares. New York-based hedge fund Pershing Square is a leading shareholder in Hilton Worldwide Holdings Inc. (NYSE: HLT), with 12.88 million shares worth more than $1.56 billion.

Long Pond Capital owns 425,889 shares in AvalonBay Communities, Inc. (NYSE: AVB) as of the end of the first quarter. The shares gained 46.77% over the past 12 months. On June 14, Wolfe Research analyst Andrew Rosivach initiated a coverage on AvalonBay Communities with a “Peerperform” rating and a price target of $238. On May 20, AvalonBay Communities, Inc. (NYSE: AVB) declared a quarterly dividend of $1.59 per share, in line with the previous. The forward yield is 6.36%. 

Another notable stock in Khoury’s portfolio is Equity Residential (NYSE: EQR). The investor owns a $126.61 million stake in the company. On June 17, Equity Residential (NYSE: EQR) declared a quarterly dividend of $0.6025 per share, in line with the previous. The forward yield is 2.41%. On June 14, Wolfe Research analyst Andrew Rosivach initiated a coverage on Equity Residential (NYSE: EQR) with a “Peerperform” rating and a price target of $83.

The demand for dividend stocks has also been gaining traction as more people look for consistent revenue sources now that there is so much market uncertainty. Finding the best dividend stocks is not exactly a walk in the park, and it requires a lot of research. Even the hedge funds are struggling at finding valuable stocks amid the increasing financial volatility. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its 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 the list of the 10 best dividend stocks to buy according to John Khoury’s Long Pond Capital. We used Long Pond’s 13F holdings data for the first quarter for this analysis.

Best Dividend Stocks to Buy According to John Khoury’s Long Pond Capital

10. Equity LifeStyle Properties, Inc. (NYSE: ELS)

Khoury’s Stake Value: $114,135,000
Percentage of John Khoury’s 13F Portfolio: 3.89%
Dividend Yield: 1.81%
Number of Hedge Fund Holders: 29

Equity LifeStyle Properties, Inc. (NYSE: ELS) is a leading owner and operator of constructed home communities, RV hotels, and camping sites in North America. It was founded in 1992 and ranks tenth on the list of 10 best dividend stocks to buy according to John Khoury’s Long Pond Capital. Equity LifeStyle Properties, Inc. (NYSE: ELS) shares have gained about 24.96% over the last 12 months.

On July 14, UBS analyst Michael Goldsmith raised the price target on Equity LifeStyle Properties, Inc. (NYSE: ELS) to $86 from $80, maintaining a “Buy” rating. On June 14, the company declared a quarterly dividend of $0.3625 per share, in line with the previous.

Long Pond Capital holds 1.79 million shares in Equity LifeStyle Properties, Inc. (NYSE: ELS), worth $114.14 million, representing 3.89% of its portfolio. At the end of the first quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $620.52 million in Equity LifeStyle, up from 24 the preceding quarter worth $701.74 million. 

Just like Hilton Worldwide Holdings Inc. (NYSE: HLT), AvalonBay Communities, Inc. (NYSE: AVB), and Equity Residential (NYSE: EQR), Equity LifeStyle Properties, Inc. (NYSE: ELS) is one of the best stocks to buy according to John Khoury’s Long Pond Capital.

Baron Funds, in their first quarter 2021 investor letter, mentioned Equity LifeStyle Properties, Inc. (NYSE: ELS). Here is what the fund said:

“The Fund also has investments in REITs that would benefit from this movement out of urban areas into suburban areas. In the aftermath of the economic impact from the Coronavirus, we expect demand for affordable housing to benefit manufactured housing REIT Equity Lifestyle Properties, Inc.”

9. First Industrial Realty Trust, Inc. (NYSE: FR)

Khoury’s Stake Value: $150,452,000
Percentage of John Khoury’s 13F Portfolio: 5.13%
Dividend Yield: 1.97%
Number of Hedge Fund Holders: 20

First Industrial Realty Trust, Inc. (NYSE: FR) is a leading owner, operator, and developer of industrial real estate. It was founded in 1993, and the company stands ninth on the list of 10 best dividend stocks to buy according to John Khoury’s Long Pond Capital. First Industrial Realty Trust, Inc. (NYSE: FR) shares have returned 38.34% to investors over the past 12 months.

On July 15, Jefferies analyst Jonathan Petersen raised the price target on First Industrial Realty Trust, Inc. (NYSE: FR) to $61.00 from $57 while maintaining a “Buy” rating. On April 21, First Industrial Realty Trust declared first quarter funds from operations (FFO). It reported FFO of $0.46, in line with the previous. The revenue for the first three months of 2021 was $116.26 million, up 5.4% YoY, beating the estimates by $3.58 million. 

John Khoury’s hedge fund increased its stake in the First Industrial Realty Trust, Inc. (NYSE: FR) by 133% in the first quarter, ending the period with $150.45 million worth of the company’s stock.

Just like Hilton Worldwide Holdings Inc. (NYSE: HLT), AvalonBay Communities, Inc. (NYSE: AVB), and Equity Residential (NYSE: EQR), First Industrial Realty Trust, Inc. (NYSE: FR) is one of the best stocks to buy according to John Khoury’s Long Pond Capital.

8. Mid-America Apartment Communities, Inc. (NYSE: MAA)

Khoury’s Stake Value: $47,669,000
Percentage of John Khoury’s 13F Portfolio: 1.62%
Dividend Yield: 2.21%
Number of Hedge Fund Holders: 25

Mid-America Apartment Communities, Inc. (NYSE: MAA) is a publicly traded real estate investment trust located in Memphis, Tennessee that invests in accommodations in the Southeastern United States and the Southwestern United States. The company was founded in 1977, and it ranks eighth on the list of 10 best dividend stocks to buy according to John Khoury’s Long Pond Capital. Mid-America Apartment Communities, Inc. (NYSE: MAA) shares have returned 63.58% to investors in the last 3 months.

On July 15, Jefferies analyst Jonathan Petersen raised the price target on Mid-America Apartment Communities, Inc. (NYSE: MAA) to $205 from $194, maintaining a “Buy” rating. On May 18, Mid-America Apartment Communities, Inc. (NYSE: MAA) declared a quarterly dividend of $1.025 per share, in line with the previous.

Long Pond Capital holds 330,210 shares in Mid-America Apartment Communities, Inc. (NYSE: MAA) worth over $47 million. This represents 1.62% of its portfolio. King Street Capital is the company’s most significant stakeholder, with 450k shares worth $64.96 million. 

Just like Hilton Worldwide Holdings Inc. (NYSE: HLT), AvalonBay Communities, Inc. (NYSE: AVB), and Equity Residential (NYSE: EQR), Mid-America Apartment Communities, Inc. (NYSE: MAA) is one of the best stocks to buy according to John Khoury’s Long Pond Capital.

7. Camden Property Trust (NYSE: CPT)

Khoury’s Stake Value: $182,958,000
Percentage of John Khoury’s 13F Portfolio: 6.24%
Dividend Yield: 2.31%
Number of Hedge Fund Holders: 24

Camden Property Trust (NYSE: CPT) is a publicly limited real estate investment trust that invests in apartments in the United States. The company was founded in 1981 and is placed seventh on the list of 10 best dividend stocks to buy according to John Khoury’s Long Pond Capital. Camden Property Trust (NYSE: CPT) shares have gained about 58.77% in value over the last 12 months.

On June 15, Camden Property Trust (NYSE: CPT) declared a quarterly dividend of $0.83 per share, in line with the previous. On June 14, Wolfe Research analyst Andrew Rosivach initiated a coverage on Camden Property Trust (NYSE: CPT) with a “Peerperform” rating and a price target of $150.

New York-based hedge fund Long Pond Capital is a leading shareholder in Camden Property Trust (NYSE: CPT) with 1.67 million shares in the company worth $182.96 million, representing 6.24% of their portfolio. Long Pond Capital increased its stake in the firm by 25% in the first quarter.

Just like Hilton Worldwide Holdings Inc. (NYSE: HLT), AvalonBay Communities, Inc. (NYSE: AVB), and Equity Residential (NYSE: EQR), Camden Property Trust (NYSE: CPT) is one of the best stocks to buy according to John Khoury’s Long Pond Capital.

6. JBG SMITH Properties (NYSE: JBGS)

Khoury’s Stake Value: $53,058,000
Percentage of John Khoury’s 13F Portfolio: 1.81%
Dividend Yield: 2.71%
Number of Hedge Fund Holders: 11

JBG SMITH Properties (NYSE: JBGS) owns, operates, invests in, and develops a vital portfolio of fast-growing mixed-use properties in Washington, DC. The company was incorporated in 1957 and is ranked sixth on the list of 10 best dividend stocks to buy according to John Khoury’s Long Pond Capital. JBG SMITH Properties (NYSE: JBGS) shares have offered investors returns of 13.04% over the course of the past 12 months.

On July 12, BMO Capital analyst John Kim initiated a coverage on JBG SMITH Properties (NYSE: JBGS) with an “Outperform” rating and a price target of $40.00. On May 4, JBG Smith (NYSE: JBGS) and JPMorgan Chase & Co. (NYSE: JPM) partnered to design, develop, handle, and possess roughly 2 million square feet of new mixed-use development in Potomac Yard, the southern portion of National Landing in Alexandria, VA. This deal will enhance JBG Smith’s ownership of Potomac Yard development rights by more than 285,000 square feet, and its economic interest holding in National Landing increased to 79% of all future unobstructed development. On April 29, JBG SMITH Properties (NYSE: JBGS) declared a quarterly dividend of $0.225 per share, in line with the previous. 

The hedge fund chaired by John Khoury owns 1.67 million shares worth over $53 million in JBG SMITH Properties (NYSE: JBGS). The biggest stakeholder of the company is V3 Capital, with 3.22 million shares, worth over $102 million.

Just like Hilton Worldwide Holdings Inc. (NYSE: HLT), AvalonBay Communities, Inc. (NYSE: AVB), and Equity Residential (NYSE: EQR), JBG SMITH Properties (NYSE: JBGS) is one of the best stocks to buy according to John Khoury’s Long Pond Capital.

Third Avenue Management, in their first quarter 2021 investor letter, mentioned JBG SMITH Properties (NYSE: JBGS). Here is what the fund said:

“JBG Smith Properties, Inc. (a U.S.-based real estate investment trust that is among the largest commercial real estate owners in the Washington, D.C. area with more than 25 million square feet of office, multifamily, and retail space including future developments) converting a portion of its extensive land holdings to a more productive use by commencing construction on a residential tower in the National Landing sub-market, as well as beginning infrastructure work on the Virginia Tech Institute in the adjacent Potomac Yard division. Through these activities, JBG Smith’s thoughtful business plan is being carried out at the direction of CEO Matthew Kelly by investing capital at compelling yields on its development spend due to a low-cost land position, as well as further strengthening the appeal of the area that will serve as Amazon’s “HQ-2” where the company not only controls roughly 9 million square feet of existing space but land that can accommodate an additional 8 million square feet of development opportunities.”

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Disclosure: None. 10 Best Dividend Stocks to Buy According to John Khoury’s Long Pond Capital is originally published on Insider Monkey.