Carl Icahn started his investment career in 1961, and today he is one of the most successful investors in the US. In 1968, he founded Icahn & Co, which is now known as Icahn Capital LP. The activist investor also gained popularity through Icahn: The Restless Billionaire, an HBO documentary that featured the life of Icahn. The documentary was released earlier this year and explored the billionaire’s investment strategy.
Icahn Capital LP follows the approach of arbitrage and options trading. Icahn looks for undervalued securities but unlike Warren Buffett, he does not rely on building portfolios for the long-term and focuses on short-selling. Over the years, he sold some of his biggest holdings like Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), and Lyft, Inc. (NASDAQ:LYFT) due to increased competition.
According to a paper published by ValueWalk, the billionaire delivered an average annual return of 31% from 1968 to 2011 while Warren Buffett’s Berkshire Hathaway returned an average of 20% during the same time.
Icahn is widely known for his philanthropic activities. He established seven Icahn Charter schools in different boroughs of New York City. He is also a Charter member of the Nassau Hall Society, which includes individuals who have given $5 million or more to Princeton University. In addition to this, Icahn also established the Children’s Rescue Fund, an organization that operates homeless shelters in NYC.
As of the end of Q2 2022, Icahn Capital LP’s 13F portfolio had a value of over $20.8 billion, compared with $21.8 billion in the previous quarter. The hedge fund had 17 holdings in Q2, with the top three stocks representing 79.05% of its portfolio.
Carl Icahn of Icahn Capital
Our Methodology:
These stocks are picked from the second quarter portfolio of Carl Icahn’s hedge fund.
10 Dividend Stocks to Buy According to Billionaire Carl Icahn’s Icahn Capital LP
10. Cheniere Energy, Inc. (NYSE:LNG)
Icahn’s Capital Stake Value: $746,513,000
Dividend Yield as of September 8: 0.85%
Cheniere Energy, Inc. (NYSE:LNG) is a Texas-based liquified natural gas company that provides affordable energy globally. Icahn Capital started building its position in the company during the second quarter of 2015 with shares worth over $74.4 million. At the end of Q2 2022, the hedge fund owned over 5.6 million LNG shares, valued at over $746.5 million. The company was the third-largest holding of the hedge fund and represented 3.57% of its 13F portfolio.
Cheniere Energy, Inc. started paying dividends during Q2 2021 and has not raised its payouts since then. It currently pays a quarterly dividend of $0.33 per share, with a dividend yield of 0.85%, as of September 8.
In August, Barclays raised its price target on Cheniere Energy, Inc. to $186 with an Overweight rating on the shares, appreciating the company’s fundamentals in this economic condition. The firm also called the stock one of its favored picks.
As of the close of Q2 2022, 65 hedge funds in Insider Monkey’s database owned stakes in Cheniere Energy, Inc., up from 62 in the previous quarter. These stakes hold a collective value of roughly $2.4 billion. Citadel Investment Group was one of the company’s most prominent stakeholders in Q2.
While dividend stocks are gaining ground among investors this year, stocks like Apple Inc., Netflix, Inc., and Lyft, Inc. continue to decline.
9. Herc Holdings Inc. (NYSE:HRI)
Icahn’s Capital Stake Value: $362,659,000
Dividend Yield as of September 8: 1.97%
Herc Holdings Inc. (NYSE:HRI) is an American holding company that provides equipment rental services in a wide range of markets. The company initiated a dividend policy in September 2021 and also announced its dividend hike in February this year. It currently pays a quarterly dividend of $0.575 per share and has a yield of 1.97%, as recorded on September 8.
Herc Holdings Inc. has been a part of Carl Icahn’s portfolio since 2016 when the billionaire purchased HRI shares worth $148.3 million. At the end of Q2 2022, his hedge fund owned over 4 million shares in the company, worth $362.6 million. The company accounted for 1.73% of Icahn’s portfolio.
In August, KeyBanc presented a bullish stance on Herc Holdings Inc. due to the improving trends in non-residential construction. The firm lifted its price target on the stock to $165 with an Overweight rating on the shares.
At the end of Q2 2022, 24 hedge funds tracked by Insider Monkey owned stakes in Herc Holdings Inc., compared with 25 in the previous quarter. These stakes are collectively valued at $761.2 million.
Alger Capital mentioned Herc Holdings Inc. in its Q2 2022 investor letter. Here is what the firm has to say:
“Herc Holdings Inc. (NYSE:HRI) is one of North America’s largest equipment rental companies with products for construction, moving materials and other functions. We believe the company has strong fundamentals, but its stock underperformed because cyclical equities have gone out of favor with many investors due to the Fed increasing interest rates and investors’ growing fears that a potential recession could hurt construction activity in the U.S. In addition, Herc provided mixed results for its first quarter, including profitability falling below expectations as determined by the consensus of analysts at financial services firms. Nevertheless, the company raised its guidance for the fiscal year.
One of Herc’s s main competitors has indicated that rental demand continues to be very strong. Additionally, we believe a decade of underinvestment in capital improvements could support demand for rental equipment.”
8. Dana Incorporated (NYSE:DAN)
Icahn’s Capital Stake Value: $201,011,000
Dividend Yield as of September 8: 2.70%
Another dividend stock in billionaire Icahn’s portfolio is Dana Incorporated (NYSE:DAN), which is an Ohio-based manufacturing corporation. The company supplies transmission, thermal, sealing, and digital equipment for different types of vehicles.
In Q2 2022, Dana Incorporated reported revenue of $2.48 billion, up 9.7% from the same period last year. The company’s operating cash flow came in at $121 million, compared with $27 million in the prior-year quarter. Its free cash flow for the quarter stood at $237 million, up from 426 million in Q2 2021. For FY22, the company expects its free cash flow to represent 1.9 to 2.3 percent of sales.
Icahn Capital opened its position in Dana Incorporated during the fourth quarter of 2020, with shares worth over $77.8 million. In Q2 2022, the hedge fund did not change its position and owned over 14.2 million shares in the company, valued at over $201 million. The company represented 0.96% of billionaire Icahn’s portfolio.
Dana Incorporated reinstated its dividend in April 2021, after halting its payouts for almost a year in the face of the pandemic of 2020. The company currently pays $0.10 per share in quarterly dividends, with a dividend yield of 2.70%, as of September 8.
At the end of June 2022, 18 hedge funds in Insider Monkey’s database reported owning stakes in Dana Incorporated, worth $363.2 million. In the previous quarter, 20 hedge funds owned stakes in the manufacturing company, with a total value of over $441 million. Chuck Royce and Cliff Asness were some of the company’s most prominent stakeholders in Q2.
7. International Flavors & Fragrances Inc. (NYSE:IFF)
Icahn’s Capital Stake Value: $76,774,000
Dividend Yield as of September 8: 2.86%
International Flavors & Fragrances Inc. is an American chemical manufacturing company that mainly specializes in fragrances and cosmetics. The company sells its products globally. In August, Baird maintained its Outperform rating on the stock with a $140 price target. The firm appreciated the management’s realistic and sustainable earnings algorithm, which will be formally launched later this year.
On August 8, International Flavors & Fragrances Inc. hiked its quarterly dividend by 2.5% to $0.81 per share. This marked the company’s 20th consecutive year of dividend growth. In the past five years, it has raised its dividends at a CAGR of 4.30%, coming through as one of the best dividend stocks in billionaire Icahn’s portfolio. As of September 8, the stock’s dividend yield stood at 2.86%.
Carl Icahn initiated his position in International Flavors & Fragrances Inc. during the first quarter of 2021, purchasing shares worth $84.6 million. At the end of Q2 2022, his hedge fund owned 644,510 IFF shares, with a total value of over $76.7 million. The company represented 0.36% of billionaire Icahn’s portfolio.
As of the end of Q2 2022, 34 hedge funds tracked by Insider Monkey owned stakes in International Flavors & Fragrances Inc., up from 33 in the previous quarter. These stakes have a total value of over $2.78 billion.
6. Southwest Gas Holdings, Inc. (NYSE:SWX)
Icahn’s Capital Stake Value: $444,380,000
Dividend Yield as of September 8: 3.03%
Up next on the list of best dividend stocks in billionaire Icahn’s portfolio is Southwest Gas Holdings, Inc. (NYSE:SWX), which provides natural gas and energy services to its consumers in the US. During Q2 2022, Icahn Capital boosted its position in the company by 77%, purchasing nearly 3 million additional shares. The hedge fund’s total SWX stake amounted to over $444.3 million, which represented 2.13% of its 13F portfolio.
In August, BofA raised its price target on Southwest Gas Holdings, Inc. to $96 with a Buy rating on the shares, highlighting the company’s strategic review process and expects the company to show steady revenue growth. Southwest Gas Holdings, Inc. is up 19.3% year-to-date, while major stocks like Apple Inc., Netflix, Inc., and Lyft, Inc. delivered negative returns this year so far.
Southwest Gas Holdings, Inc. has a strong dividend history as the company has been paying dividends since its IPO in 1956. In addition to this, it has been raising its payouts consistently since 2007. The company currently pays a quarterly dividend of $0.62 per share, with a dividend yield of 3.03%, as recorded on September 8.
At the end of Q2 2022, 30 hedge funds in Insider Monkey’s database owned investments in Southwest Gas Holdings, Inc., compared with 29 in the previous quarter. These investments hold a collective value of $933.4 million, up from $632 million worth of stakes owned by hedge funds in the preceding quarter.
5. FirstEnergy Corp. (NYSE:FE)
Icahn’s Capital Stake Value: $728,172,000
Dividend Yield as of September 8: 3.79%
FirstEnergy Corp. (NYSE:FE) is an Ohio-based electric services company that specializes in the distribution and generation of electricity. The company was a part of 42 hedge fund portfolios in Q2 2022, growing from 33 in the previous quarter. The stakes owned by these hedge funds hold a collective value of over $1.78 billion.
Billionaire Icahn initiated his position in FirstEnergy Corp. during the first quarter of 2021 with shares worth roughly $658 million. At the end of Q2 2022, his hedge fund held nearly 19 million shares in the company with a total value of over $728 million. The company accounted for 3.49% of its 13F portfolio.
Though FirstEnergy Corp. hasn’t raised its dividends since 2019 due to the pandemic, the company maintained its payouts during this period. Its quarterly dividend currently stands at $0.39 per share and has a yield of 3.79%, as of September 8.
In July, Barclays reiterated its Equal Weight rating on FirstEnergy Corp. as the firm upgraded price targets on North America’s power and utility sector.
ClearBridge Investments mentioned FirstEnergy Corp. in its Q4 2021 investor letter. Here is what the firm has to say:
“On a regional level, the Strategy’s largest exposure is in the U.S. and Canada (44%), consisting of regulated and contracted utilities (31%) and economically sensitive user-pays infrastructure (13%).
During the quarter we initiated new positions in U.S. electric utility FirstEnergy. With supply chain issues, higher housing costs, higher commodity prices and producer price inflation remaining square in the sights for 2022, we think higher inflation is a risk for global markets. We expect growth to slow to trend or below by mid-2022 and U.S.”
4. CVR Energy, Inc. (NYSE:CVI)
Icahn’s Capital Stake Value: $2,385,157,000
Dividend Yield as of September 8: 4.83%
CVR Energy, Inc. (NYSE:CVI) is another prominent dividend stock in billionaire Icahn’s portfolio. The company specializes in petroleum refining and also manufactures nitrogen fertilizers.
CVR Energy, Inc. was the second-largest holding of Icahn Capital and represented 11.43% of its portfolio in Q2. The hedge fund has been investing in the company since the fourth quarter of 2011 and gradually increased its position. In Q2 2022, the fund owned over 71 million shares in the company, worth nearly $2.4 billion.
On August 1, CVR Energy, Inc. declared a quarterly dividend of $0.40 per share and a supplemental dividend of $2.60 per share. As of September 8, the stock’s dividend yield came in at 4.83%.
The number of hedge funds tracked by Insider Monkey owning stakes in CVR Energy, Inc. grew to 22 in Q2 2022, from 17 in the previous quarter. These stakes hold a collective value of over $2.52 billion. Jim Simons’ Renaissance Technologies was one of the company’s most prominent stakeholders in Q2.
3. Newell Brands Inc. (NASDAQ:NWL)
Icahn’s Capital Stake Value: $629,661,000
Dividend Yield as of September 8: 5.35%
Newell Brands Inc. (NASDAQ:NWL) is an American commercial company that deals in the manufacturing and marketing of consumer and commercial products. The company has not raised its dividend since 2017 but has been paying dividends to shareholders since 1994. It currently pays a quarterly dividend of $0.23 per share, with a dividend yield of 5.35%, as recorded on September 8.
This September, Raymond James maintained its Strong Buy rating on Newell Brands Inc. with a $23 price target. The firm acknowledged the company’s recent quarterly earnings and its guidance and also expects to see improvement in its restructuring.
In Q2 2022, Carl Icahn owned over 33 million shares in Newell Brands Inc., worth roughly $630 million. The company represented 3.01% of the billionaire’s portfolio. He started investing in the company during the first quarter of 2018 with shares worth over $771.5 million.
As of the close of Q2 2022, 22 hedge funds tracked by Insider Monkey owned $1.46 billion worth of stakes in Newell Brands Inc.. In comparison, 31 hedge funds owned stakes in the company in the previous quarter, with a total value of over $1.64 billion.
2. Xerox Holdings Corporation (NASDAQ:XRX)
Icahn’s Capital Stake Value: $508,543,000
Dividend Yield as of September 8: 6.25%
Xerox Holdings Corporation (NASDAQ:XRX) is a Connecticut-based corporation that specializes in print and digital document products and provides related services in 160 countries.
In Q2 2022, Icahn Capital raised its position in Xerox Holdings Corporation by 7%, which takes its total stake in the company to over $508.5 million. The company accounted for 2.43% of the hedge fund’s portfolio.
Xerox Holdings Corporation has been making consecutive dividend payments for the past 15 years. Currently, the company pays a quarterly dividend of $0.25 per share, and as of September 8, the stock’s dividend yield came in at 6.25%.
In July, JPMorgan maintained its Underweight rating on Xerox Holdings Corporation but expects the company to show resilience in its cloud and cable services.
Citadel Investment Group owned over $13.6 million worth of stakes in Xerox Holdings Corporation, becoming one of the major stakeholders of the company in Q2. Overall, 29 hedge funds tracked by Insider Monkey owned stakes in the company in the second quarter, up from 25 in the previous quarter. These stakes have a consolidated value of roughly $620 million.
1. Icahn Enterprises L.P. (NASDAQ:IEP)
Icahn’s Capital Stake Value: $13,360,695,000
Dividend Yield as of September 8: 15.87%
Icahn Enterprises L.P. (NASDAQ:IEP) is an American diversified holding company that provides services in a wide range of industries. The company has sustained the same quarterly payout of $2.00 per share since 2019. As of September 8, the stock’s dividend yield stood at 15.87%.
Icahn Enterprises L.P. was the largest holding of billionaire Icahn’s portfolio in Q2 2022. His hedge fund opened its position in the company during the second quarter of 2011 with shares worth over $3.4 billion. In Q2 2022, the hedge fund owned over 277.6 million IEP shares, worth $13.36 billion. The company represented 64.05% of its 13F portfolio.
At the end of Q2 2022, Icahn Enterprises L.P. was a part of 2 hedge fund portfolios, compared with 4 in the preceding quarter, according to Insider Monkey’s data. The collective value of stakes owned by these hedge funds stood at $13.3 billion.
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This article is originally published at Insider Monkey.
