Michael F. Price is the founder and managing partner of MFP Investors LLC. Born in Glen Cove, New York, to a Jewish family in 1951, Price completed his B.A from the University of Oklahoma in 1973.
After completing his education, Price started his journey in the world of investment and finance by joining Heine Securities as a research assistant. He became a full partner at the investment firm in 1982 and after the demise of Max Heine in 1988, he took over as president and chairman of the investment firm.
In 1996, Franklin Resources, Inc. (NYSE:BEN), or Franklin Templeton Securities, acquired Heine Securities from Price for $670 million. At that time, Heine Securities had assets under management (AUM) of $17 billion. Price became the chairman of the merged entity and managed the mutual funds. In 1998, he recused himself from the daily operations of the investment firm but continued his duties as the chairman. In 2001, Price stepped down from his position to start his hedge fund MFP Investors LLC.
Investment Philosophy
In 1995, Price came into the limelight when he took a 6.1% stake in Chase Manhattan bank and pressured the management to offload certain segments or find a suitable acquirer for the bank so that the stock price can soar to its actual value. His activism worked as Chemical Banking Corp. acquired Chase Manhattan Bank for $10 billion in August 1995 to create the biggest publicly traded financial institution in the US.
The acquiring company adopted the Chase name and the modern-day JPMorgan Chase & Co. was born after Chase acquired JP Morgan in December 2000. The deal was valued at a price that was 70% higher than Michael Price’s purchases of the stock.
This was a classic example of Price’s investment philosophy, which is based on finding undervalued companies that have higher actual value than the market price and taking an activist position. He works with such companies by helping them restructure their operations and reap the returns once the turnaround is complete.
Price has a stake in some popular companies like Intel Corporation (NASDAQ:INTC), Alphabet Inc. (NASDAQ:GOOG), and Twitter, Inc. (NYSE:TWTR) as of Q3 2021.
MFP Investors held 2.05 million shares in Intel Corporation with a market value of over $109 million. For Q3 2021, Intel Corporation beat the analysts’ estimated EPS of $1.11 by $0.6. Furthermore, Intel Corporation has been increasing its annual dividend since 2010.
At the end of Q3, Price also owned 6300 shares in Alphabet Inc., worth over $16.8 million. The stock price of Alphabet Inc. is up more than 68% YTD as of December 8.
Moreover, MFP Investors also has a stake worth $15.09 million in Twitter, Inc.. Twitter, Inc. recorded revenue of $1.28 billion for Q3, beating the analysts’ estimate by $1.02 million.
Michael Price of MFP Investors
Our Methodology
In this article, we will discuss 10 dividend stocks to buy according to billionaire Michael Price’s MFP Investors. The stocks have been picked from the Q3 portfolio of Michael Price’s MFP Investors.
10 Dividend Stocks to Buy According to Billionaire Michael Price’s MFP Investors
10. Waterstone Financial, Inc. (NASDAQ:WSBF)
MFP Investors LLC’s Stake Value: $11,767,000
Percentage of MFP Investors LLC’s 13F Portfolio: 1.36%
Stock Price as of December 8: $21.27
Waterstone Financial, Inc. (NASDAQ:WSBF) is a regional and mortgage bank with operations focused in the southern Wisconsin region.
The dividend stock has a yield of over 3.7%.
Waterstone Financial, Inc. reported its Q3 2021 results on October 19. Revenue was $67.05 million, which surpassed the consensus estimate of $60.3 million while the EPS was 79 cents as opposed to the consensus estimate of 61 cents.
Waterstone Financial, Inc. is expected to be a beneficiary of the economic boom in the state of Wisconsin as the unemployment rate has fallen to 3.4%, compared to the national average of 4.6%. The low unemployment rate plays in the favor of Waterstone Financial as the housing market will remain strong, which is positively related to the mortgage market.
According to Insider Monkey’s data comprising of 867 hedge funds, 11 hedge funds held stakes in Waterstone Financial, Inc. at the end of Q3 2021. The number of hedge funds holding a position in the stock has increased by two on a sequential basis.
In addition to Waterstone Financial, Inc., Michael Price’s MFP Investors also held stakes in popular companies like Intel Corporation, Alphabet Inc., and Twitter, Inc. at the end of Q3 2021.
9. Franklin Resources, Inc. (NYSE:BEN)
MFP Investors LLC’s Stake Value: $13,006,000
Percentage of MFP Investors LLC’s 13F Portfolio: 1.5%
Stock Price as of December 8: $32.98
Michael Price has still not severed his ties with Franklin Resources, Inc.. It is one of the major holdings in his portfolio. The San Mateo, California-based asset management company was founded in 1947 and is one of the biggest asset management companies in the world with assets under management (AUM) of nearly $1.56 trillion.
The company declared a quarterly dividend of 28 cents, which translates into a forward dividend yield of just under 3.4%.
Of the 867 funds tracked by Insider Monkey, 28 hedge funds held a cumulative stake of $359.4 million in Franklin Resources, Inc. at the end of Q3 2021.
In a report issued to its investors on November 2, William Katz at Citi upgraded Franklin Resources, Inc. from a Neutral to a Buy rating, and revised the target price from $32.50 to $43.
8. BCB Bancorp, Inc. (NASDAQ:BCBP)
MFP Investors LLC’s Stake Value: $15,067,000
Percentage of MFP Investors LLC’s 13F Portfolio: 1.74%
Stock Price as of December 8: $15.12
BCB Bancorp, Inc. (NASDAQ:BCBP) is a regional bank based out of Bayonne, New Jersey. The bank has 32 branches spread across New Jersey and New York with 350 employees managing $3 billion in assets. BCB Bancorp, Inc. disclosed a quarterly dividend of 16 cents per share. This gives the stock a forward dividend yield of 4.2%. The stock has been a part of Michael Price’s portfolio since Q4 2020.
Despite a dividend yield of over 4%, the payout ratio was just over 30%. This means that BCB Bancorp, Inc. can easily sustain its dividend as it is only paying out 30% of its net income to make up for its dividend. BCB Bancorp, Inc. has a loan book of $2.29 billion and 75% of these loans are commercial and multi-family loans. Interestingly, only $17 million of the loans are past due. This is equivalent to 0.75% of the total loan portfolio.
BCP, like Intel Corporation, Alphabet Inc., and Twitter, Inc., is one of the notable stocks in Price’s portfolio.
Out of 867 hedge funds under Insider Monkey’s coverage, eight hedge funds have a stake in BCB Bancorp, Inc. as of Q3 2021. The total value of the stake stands at $28.51 million, which is equivalent to 11% of the company’s market value.
7. Dolby Laboratories, Inc. (NYSE:DLB)
MFP Investors LLC’s Stake Value: $17,603,000
Percentage of MFP Investors LLC’s 13F Portfolio: 2.03%
Stock Price as of December 8: $88.44
Dolby Laboratories, Inc. (NYSE:DLB) is a creator of audiovisual technologies and licenses them to companies in the consumer electronics industry. The company also caters to the end customer by selling and distributing its product to them directly. The San Francisco, California-based company was founded in 1965. Dolby Laboratories, Inc. declared a quarterly dividend of 25 cents per share on November 16. This reflects a forward dividend yield of 1.1%.
For Q1 FY22, Dolby Laboratories, Inc. provided an outlook that anticipates revenue between $345 million and $375 million. The midpoint revenue guidance of $360 million is lower than the consensus estimate of $389.77 million. Meanwhile, the company anticipates adjusted EPS of 98 cents to $1.13 as opposed to the analysts’ estimate of $1.31.
MFP Investors LLC initiated a stake in Dolby Laboratories, Inc. in Q3 2013 and since then, the company has always reported a stake in the stock every quarter with the exception of one in 2014.
6. Scholastic Corporation (NASDAQ:SCHL)
MFP Investors LLC’s Stake Value: $18,720,000
Percentage of MFP Investors LLC’s 13F Portfolio: 2.16%
Stock Price as of December 8: $38.70
Scholastic Corporation (NASDAQ:SCHL) is the biggest publisher and distributor of children’s books globally. The New York-based company was founded in 1920 and has its presence in 115,000 schools catering to 3.8 million teachers, 54 million pupils, and 78 million parents or caregivers through its literacy curriculum in the form of classroom magazines, educational content, and other platforms. On September 22, Scholastic Corporation announced a quarterly dividend of 15 cents per share.
The stock’s dividend yield stands at 1.6%.
Scholastic Corporation is one of the newest holdings in Michael Price’s portfolio as the hedge fund took a stake in the stock for the first time in Q2 2021 with 321,808 shares. The hedge increased its holdings by 63% to 525,103 shares at the end of Q3 2021. As per Insider Monkey’s data, 13 hedge funds had a cumulative position of $47.53 million in Scholastic Corporation as of Q3 2021. This is equivalent to 3.9% of the company’s market capitalization.
Scholastic Corporation is operating in the publishing industry that has come under severe pressure since the start of the COVID-19 pandemic. Furthermore, the overall industry is in a downward trend because of the emergence and growth of digital media.
Besides Scholastic Corporation, Michael Price’s MFP Investors also has a stake in notable companies like Intel Corporation, Alphabet Inc., and Twitter, Inc. as of Q3 2021.
5. Banc of California, Inc. (NYSE:BANC)
MFP Investors LLC’s Stake Value: $21,014,000
Percentage of MFP Investors LLC’s 13F Portfolio: 2.43%
Stock Price as of December 8: $20.52
Banc of California, Inc. (NYSE:BANC) is another regional bank in MFP Investor’s portfolio that has been serving customers for the past eight decades. The Santa Ana, California-based bank has 30 branches spread from San Diego to Santa Barbara with 598 employees. Banc of California, Inc. revealed a six-cent per share quarterly dividend.
The stock has a dividend yield of 1.2%.
Out of the 867 hedge funds being tracked by Insider Monkey, 16 hedge funds have a cumulative stake of $68.455 million in Banc of California, Inc. as of Q3 2021. This is equivalent to 7.3% of the company’s market capitalization.
4. Popular, Inc. (NASDAQ:BPOP)
MFP Investors LLC’s Stake Value: $24,334,000
Percentage of MFP Investors LLC’s 13F Portfolio: 2.81%
Stock Price as of December 8: $79.76
Popular, Inc. (NASDAQ:BPOP) is a financial services conglomerate operating in Puerto Rico for over 125 years through its 170-plus branches and in the US mainland for over five decades through its 35 branches spread across New Jersey, New York, and Southern Florida.
The bank declared a quarterly dividend of 45 cents on November 16. This gives Popular, Inc. stock a forward dividend yield of over 2.2%.
MFP Investors LLC initiated a position in the stock in Q1 2014 with 153,700 shares. Since Q1 2020, the hedge fund has been holding 313,296 shares of Popular Inc, and there has been no change in holdings as of Q3 2021. At that time, the average stock price was $49.51, which has increased by over 61% to the current level.
3. CIT Group Inc. (NYSE:CIT)
MFP Investors LLC’s Stake Value: $33,539,000
Percentage of MFP Investors LLC’s 13F Portfolio: 3.87%
Stock Price as of December 8: $49.90
CIT Group Inc. (NYSE:CIT) is a New York-based commercial and consumer bank that operates nearly 60 branches in the Southern California region. The bank announced a merger with First Citizen BancShares, Inc. (NASDAQ:FCNCA) in October 2020, which is expected to be closed by March 1, 2022.
CIT Group Inc. announced a quarterly dividend of 35 cents per share on October 18. The stock’s dividend yield is 2.92%.
2. Bunge Limited (NYSE:BG)
MFP Investors LLC’s Stake Value: $35,359,000
Percentage of MFP Investors LLC’s 13F Portfolio: 4.08%
Stock Price as of December 8: $87.78
Bunge Limited (NYSE:BG) is an agribusiness and food operator globally. The company buys, stores, processes, transports, and sells agricultural products like corn, wheat, and oilseeds. It also manufactures and sells edible oil-based products like margarine, mayonnaise, milled corn, and rice, etc. Bunge Limited has a headcount of 36,000 employees spread across 40 countries.
Bunge’s dividend yield is 2.39%, as of December 16.
1. Intel Corporation (NASDAQ:INTC)
MFP Investors LLC’s Stake Value: $109,108,000
Percentage of MFP Investors LLC’s 13F Portfolio: 12.63%
Stock Price as of December 8: $52.57
Intel Corporation was founded in 1968 by Gordon Moore and Robert Noyce. The Santa Clara, California-based company is the biggest semiconductor chip manufacturer in the world in terms of revenue. The company scheduled the quarterly dividend payment of 34.75 cents per share on December 1.
Intel’s dividend yield stands at 2.4%.
Intel Corporation was mentioned in the Q3 2021 investor letter of Davis Funds. Here’s what the fund said:
“Semiconductor-related holdings currently include Intel. While each of these businesses is unique, they serve fast-expanding global end markets ranging from e-commerce and AI to cloud computing, mobile technologies and electric vehicles—a set of market opportunities that dwarf this industry’s historical legacy markets in more mature sectors, such as PCs and mobile devices. We are excited by these new, long-tailed areas of future growth for this set of well-resourced, innovative hightechnology companies. In our view, best-inclass operators have successfully made the transition from what were historically cyclical businesses to “growth cyclicals” over the coming decades. Products today are harder to design and manufacture, let alone source given a strained supply chain, making chips more valuable today than before—in some cases by multiples of past pricing. In addition, financially savvy managements have created value by retiring large percentages of their companies’ shares when their stocks were cheap, with some retiring 20–35% over the last seven years alone.”
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This article is originally published at Insider Monkey.
