In this article we will take a look at the 10 best dividend stocks to buy now according to billionaire Jim Simons.
Dividend stocks present traders with the opportunity to earn a regular passive income. Doing all the research necessary to identify the best dividend stocks requires a lot of work, but one can take a shorter route by following the recommendations of hedge fund managers who have a dividend stock portfolio.
James Harris Simons is one of the most successful hedge fund investors that have made a lot of money through smart stock picking. He founded Renaissance Technologies in 1982, a hedge fund that uses quantitative analysis and mathematical models to analyze stock movements and predict market direction.
According to Forbes, Jim Simons was the 23rd wealthiest American, with a net worth of $23.5 billion in 2020. This success through Renaissance Technologies has earned him the nickname “Quant King.” Renaissance Technologies had a portfolio value of $80.381 billion in Q1 2021, compared to $92.092 billion in Q4 2020. The fund is popular not only for delivering robust growth but also for ignoring fickle market sentiments and focusing on long-term prospects of companies.
Jim Simons has invested in some popular stocks in the past, such as Tesla, Inc. (NASDAQ: TSLA). In the first quarter, Simons’ hedge fund increased its hold in Tesla by over 200%, ending the period with 827,381 shares of the company, worth $552.6 million. Tesla, Inc. (NASDAQ: TSLA) announced towards the end of April that the value of its Bitcoin investment was $2.48 billion, which means it would have made a profit of more than $1 billion if it were to cash out at that point. Tesla, Inc. (NASDAQ: TSLA) has been ramping up its EV production in Europe and Asia to compete more effectively with the growing global EV market. Tesla, Inc. (NASDAQ: TSLA) shares are up 291% over the last 12 months.
Alphabet Inc. (NASDAQ: GOOG) is also one of Jim Simons’ favorite stocks. The company achieved record profits for the second consecutive quarter due to increased ad usage during the pandemic. Its Google Ads sales grew by 32% YoY in Q1. Alphabet Inc. (NASDAQ: GOOG) recently announced a $50 billion share buyback. Alphabet Inc. (NASDAQ: GOOG) Class A shares are up 66% over the last 12 months.
Renaissance Technologies also has a $263 million stake in Facebook, Inc. (NASDAQ: FB). Facebook, Inc. (NASDAQ: FB) Q1 performance surpassed analyst expectations. Billionaire Paul Singer’s Elliott Management bought a $7.3 million stake in Facebook in the first quarter of 2021.
Jim Simons of Renaissance Technologies
Simons is an exception in an industry that is reeling from losses. 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 26th 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 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Here are some of the 10 best dividend stocks to buy now according to billionaire Jim Simons. We picked these dividend stocks from the Q1 portfolio of Simons’ hedge fund.
Best Dividend Stocks to Buy Now According to Billionaire Jim Simons
10. KKR Real Estate Finance Trust Inc. (NYSE: KREF)
Simons’ Stake Value: $5,554,000
Percentage of Jim Simons’ 13F Portfolio: 0.001%
Dividend Yield: 8%
No. of Hedge Fund Holders: 7
KKR Real Estate Finance Trust Inc. (NYSE: KREF) is a mortgage REIT that creates or acquires senior secured loans backed by commercial real estate assets. Like Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG) and Tesla, Inc. (NASDAQ: TSLA), KKR Real Estate is one of the best stocks in Renaissance’s portfolio. The company declared its Q1 dividend of $0.43 per share, in line with its Q4 2020 dividend payout.
KKR Real Estate Finance Trust’s Q1 2021 revenue of $38.54 million outperformed the consensus estimate by $2.17 million and was $38.54 million higher YoY. Its Q1 2020 GAAP EPS was $0.52 per share.
Steven Delaney, an analyst at JMP Securities, upgraded the stock from a “Market Perform” to “Outperform” thanks to its high-quality loan portfolio, balance sheet strength, high quality financing, and proper management. His price target for the stock was $21.50 as of April 2021. JP Morgan’s analyst Richard Shane also upgraded the stock to “Overweight” from “Neutral” in February 2021.
9. Iron Mountain Incorporated (NYSE: IRM)
Simons’ Stake Value: $4,236,000
Percentage of Jim Simons’ 13F Portfolio: 0.001%
Dividend Yield: 5.75%
No. of Hedge Fund Holders: 16
Iron Mountain Incorporated (NYSE: IRM) provides information management and storage services globally. It recently signed a deal to sell its Intellectual Property Management to a cybersecurity and escrow company called NCC Group, and the sale will be worth $220 million. The sale will allow Iron Mountain to focus on innovative new products and shift its attention towards its strengths.
Iron Mountain reported a Q1 2021 revenue of $1.08 billion, which represents a slight improvement from the $1.07 billion revenue achieved in the previous quarter. Its Q1 2021 net revenue of $46.6 million was a slight decline from the $64.9 million net revenue achieved in Q1 2020.
Baird’s analyst Andrew Wittmann upgraded Iron Mountain Incorporated (NYSE: IRM) to a “Neutral” rating and assigned the price target at $29 in August 2019. BofA Securities downgraded the stock to an “Underperform” rating in July 2019 and set the price target at $25. Iron Mountain Incorporated ranks ninth on the list of 10 best dividend stocks to buy now according to billionaire Jim Simons.
8. Spark Energy, Inc. (NASDAQ: SPKE)
Simons’ Stake Value: $11,453,000
Percentage of Jim Simons’ 13F Portfolio: 0.01%
Dividend Yield: 6.78%
No. of Hedge Fund Holders: 4
Spark Energy, Inc. (NASDAQ: SPKE) is a U.S energy industry company that deals with independent retail energy services. It mainly deals with the retail gas, natural gas, and retail electricity segments targeting commercial and residential customers. Like Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG) and Tesla, Inc. (NASDAQ: TSLA), Spark Energy is one of the best stocks in Renaissance’s portfolio.
Jim Simons owns 1.07 million shares of Spark Energy, topping the list of over 850 hedge funds tracked by Insider Monkey. Next on the list is Arrowstreet Capital that owns 23,745 shares of the company.
The company announced a Q1 quarterly dividend of $0.1813 per share, equivalent to the dividend payout announced for the previous quarter. Spark Energy, Inc. (NASDAQ: SPKE) reported a $27.6 million net loss in Q1 and a $32.7 million adjusted EBITDA.
7. One Liberty Properties, Inc. (NYSE: OLP)
Simons’ Stake Value: $19,870,000
Percentage of Jim Simons’ 13F Portfolio: 0.02%
Dividend Yield: 7.2%
No. of Hedge Fund Holders: 8
One Liberty Properties, Inc. (NYSE: OLP) is a self-managed REIT based in Maryland. It was launched in 1982, making it one of the oldest public REITs, and its lengthy presence in the market is a leg-up that substantially allowed it to grow its portfolio. The stock ranks 7th in the list of 10 best dividend stocks to buy now according to billionaire Jim Simons.
One Liberty announced its latest quarterly dividend payout at $0.45 per share, which is in line with the previous dividend payout. The company generated $20.82 million revenue in Q1, which missed the consensus revenue target by $0.4 million.
6. Gladstone Commercial Corporation (NASDAQ: GOOD)
Simons’ Stake Value: $41,994,000
Percentage of Jim Simons’ 13F Portfolio: 0.05%
Dividend Yield: 7.21%
No. of Hedge Fund Holders: 7
Gladstone Commercial Corporation (NASDAQ: GOOD) ranks 6th in the list of best dividend stocks to buy according to Jim Simons. The REIT mainly focuses on the acquisition, ownership, and management of net leased office and industrial properties in the U.S.
Gladstone Commercial Corporation (NASDAQ: GOOD) declared a $0.12515 per share monthly dividend in April this year. The company reported that it had a 95% occupancy rate in its portfolio as of March and its cash base collection for the same month was 98%.
Gladstone Commercial Corporation (NASDAQ: GOOD) signed a lease extension and expansion agreement with Sumitomo Electric Lightwave at its 123,574 sq. ft. industrial property in North Carolina.
Aegis Capital’s analyst Brian Hollenden assigned a “Buy” rating to the stock and assigned a price target of $23 in April 2021. B.Riley’s analyst Craig Kucera upgraded the stock to a “Buy” rating, with a $23 price target in March 2020.
5. Teekay LNG Partners L.P. (NYSE: TGP)
Simons’ Stake Value: $908,000
Percentage of Jim Simons’ 13F Portfolio: 0.001%
Dividend Yield: 7.52%
No. of Hedge Fund Holders: 9
Teekay LNG Partners L.P. (NYSE: TGP) is an energy industry company that deals with liquefied petroleum gas (LPG) and liquefied natural gas (LNG) transportation across the globe. In mid-April, it declared a Q1 2020 dividend of $0.2875 per share, a notable boost from the $0.25 per share dividend payout in the previous quarter. Teekay ranks fifth on the list of 10 best dividend stocks to buy now according to billionaire Jim Simons.
The company generated $152.8 million revenue in Q1, outperforming the consensus estimate by $3.97 million, and it registered a 9.2% gain YoY. Its non-GAAP EPS for the same quarterly period was $0.61, which was $0.02 higher than the consensus estimate.
B.Riley’s analyst Liam Burke assigned a “Buy“ rating to Teekay LNG Partners L.P. (NYSE: TGP) stock setting $13 as price target in February 2021.
Here is what Horos Asset Management has to say about Teekay LNG Partners L.P. (NYSE: TGP) in its Q2 2020 investor letter:
“We trimmed our exposure to the two Teekay companies after the strong rally they experienced in April from the March lows (Teekay Corp. rallied 120% while Teekay LNG 70%). In the case of Teekay LNG, the share price has been relatively flat since then, while the holding company Teekay Corp. has had a sharp decline and returned to its lows. What justifies this poor performance of the company on the stock market?
On the one hand, Teekay Corp. and Teekay LNG finally announced the expected transaction of the Incentive Distribution Rights (IDRs) that Teekay Corp. held over Teekay LNG. Specifically, Teekay LNG acquired the IDRs by issuing 10.75 million shares (around $120 million at the time of the transaction). As a reminder of the functioning of the IDRs, Teekay Corp. was entitled to receive an extraordinary dividend from Teekay LNG, provided that the latter exceeded certain minimum thresholds for earnings distributions to its shareholders. In addition, as we have mentioned in the past, Teekay Corp. controlled c.34% of Teekay LNG (31.7% via common shares and 2.0% via a General Partner agreement). In our opinion, this complex capital structure made it difficult to value both companies, so the transaction announced on May 11 looks positive to us. However, the terms of this transaction were somewhat disappointing from the perspective of Teekay Corp.’s shareholders—who now control 42.5% of Teekay LNG—so we adjusted our valuation of Teekay Corp. downwards.”
4. Arbor Realty Trust, Inc. (NYSE: ABR)
Simons’ Stake Value: $3,778,000
Percentage of Jim Simons’ 13F Portfolio: 0.001%
Dividend Yield: 7.65%
No. of Hedge Fund Holders: 21
Arbor Realty Trust, Inc. (NYSE: ABR) is a real estate company whose portfolio mainly targets commercial real estate, single-family rentals, and multifamily segments. The stock ranks fourth in the list of 10 best dividend stocks to buy now according to billionaire Jim Simons. This month, the company announced that it issued 5.00% senior unsecured notes due April 2026, whose principal amount is $175 million. The notes were issued through a private placement. The proceeds will be used for general corporate purposes and also for business-related investments.
Arbor Realty Trust, Inc. (NYSE: ABR) declared a Q1 quarterly dividend of $0.34 per share, a slight gain from the $0.33 per share dividend announced in the previous quarter.
3. Ares Commercial Real Estate Corporation (NYSE: ACRE)
Simons’ Stake Value: $2,540,000
Percentage of Jim Simons’ 13F Portfolio: 0.001%
Dividend Yield: 8.82%
No. of Hedge Fund Holders: 14
Ares Commercial Real Estate Corporation (NYSE: ACRE) is a company that operates in the specialty finance segment where it creates and invests in commercial real estate loans in the U.S. It recently announced a Q1 2021 dividend of $0.33 per share, consistent with the previous dividend payout. Ares Commercial Real Estate ranks third on the list of 10 best dividend stocks to buy now according to billionaire Jim Simons.
Earlier this month, Ares Commercial Real Estate Corporation announced that it launched an underwritten offering in which it publicly offered 7 million common stock shares. The underwriters will be granted the option of buying an additional 1.05 million shares. The net proceeds from the public offering will go towards general corporate purposes and drawing down the company’s debt.
BTG’s analyst Benjamin Zucker assigned a “Buy” rating to Ares Commercial Real Estate Corporation (NYSE: ACRE) and a $14.50 price target in February 2021. Keefe Bruyette and Woods’ analyst upgraded the stock to “Outperform” and set a price target of $10.50 in June 2020.
2. American Finance Trust, Inc. (NASDAQ: AFIN)
Simons’ Stake Value: $287,000
Percentage of Jim Simons’ 13F Portfolio: 0.001%
Dividend Yield: 9.05%
No. of Hedge Fund Holders: 7
American Finance Trust, Inc. (NASDAQ: AFIN) is another public REIT that is part of the best dividend stocks to buy now, according to billionaire Jim Simons. The REIT acquires and manages a robust and diverse portfolio of real estate properties in the U.S’s distribution and traditional retail industries. Like Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG) and Tesla, Inc. (NASDAQ: TSLA), American Finance Trust is one of the best stocks in Renaissance’s portfolio.
American Finance Trust announced a Q1 dividend of $0.212 per share, which was in line with the previous quarter’s dividend payout. The REIT announced on April 7 that it managed to collect 99% of Q1 2021s’s original cash rent and 100% of the cash rent from its single-tenant portfolio.
BMO Capital’s analyst Frank Lee rated American Finance Trust, Inc. (NASDAQ: AFIN) stock as a “Sector Perform” and has a $13 price target. B.Riley’s analyst Bryan Maher upgraded the stock to a “Buy,” and has a price target of $11.
1. Apartment Investment and Management Company (NYSE: AIV)
Simons’ Stake Value: $9,988,000
Percentage of Jim Simons’ 13F Portfolio: 0.01%
Dividend Yield: 60.8%
No. of Hedge Fund Holders: 18
Apartment Investment and Management Company (NYSE: AIV) operates as a real estate investment trust that develops and manages a portfolio that mainly deals with the multifamily segment in the real estate industry. The company stands first on the list of 10 best dividend stocks to buy now according to billionaire Jim Simons.
The publicly traded REIT revealed that it earned $21.5 million revenue in Q1, which is down 5.8% YoY and 5.8% from the previous quarter’s revenue. The revenue figure was shy of analyst estimates by $182.28 million.
You can also take a peek at 10 Blue Chip Dividend Stocks Hedge Funds Are Buying and 14 Best European Dividend Stocks To Buy
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Best Dividend Stocks for Passive Income
- 10 Best Healthcare Dividend Stocks
- 10 Extreme Dividend Stocks with Huge Upside
Disclosure: None. 10 Best Dividend Stocks to Buy Now According to Billionaire Jim Simons is originally published on Insider Monkey.
