In this article, we discuss 10 dividend stocks to buy according to billionaire Stanley Druckenmiller’s Duquesne Capital.
Stanley Druckenmiller is one of Wall Street’s most celebrated investors, becoming famous by leading George Soros’ bet against the British pound in 1992. He founded Duquesne Capital in 1981, and after reaping profits for 30 years, he shut down his hedge fund in 2010 and converted it into a family office. Over his service of three decades, his hedge fund outperformed his peers. In 2008, Duquesne Capital returned 11% to shareholders, when average hedge funds fell by 19%, as reported by Bloomberg. In addition to this, his fund also delivered an annual average return of 30% from 1986 to 2010, according to MoneyWeek.
Druckenmiller follows the same investment philosophy as George Soros, following a top-down global macro investment strategy. The billionaire focuses on broad market trends by trading different asset classes globally. In addition to this, he also carries out political and social analyses of the markets he is investing in, which are associated with long-term projections.
As Big Tech suffered a massive sell-off in 2022, Druckenmiller also ditched his tech holdings in the second quarter of 2022. The billionaire was bearish on the tech stocks in the first quarter as well and highlighted the probability of a recession in his interview with Bloomberg in August.
At the end of Q2 2022, Duquesne Capital’s 13F portfolio had a value of over $1.38 billion, compared with $2.8 billion in the previous quarter. Basic materials and services sectors made up the major portion of the fund’s portfolio, with healthcare, consumer goods, and finance taking up the smaller fraction. Some of the fund’s major holdings in Q2 include Microsoft Corporation (NASDAQ:MSFT), Chevron Corporation (NYSE:CVX), and Eli Lilly and Company (NYSE:LLY). In this article, we will elaborate on dividend stocks in billionaire Druckenmiller’s portfolio.
With the recent high inflation, the markets have been volatile and many stock prices could decline further. Nevertheless, there’s also opportunity for long term investors who buy quality companies.
Our Methodology:
For this list, we took the 10 highest dividend yield stocks as of September 8 from billionaire Stanley Druckenmiller’s Duquesne Capital’s top 40 holdings in Q2 2022 and then we sorted them based on the number of hedge funds in our database that held stakes in the same quarter.
10 Dividend Stocks to Buy According to Billionaire Stanley Druckenmiller’s Duquesne Capital
10. Edison International (NYSE:EIX)
Number of Hedge Fund Holders: 26
Dividend Yield as of September 8: 4.12%
Edison International (NYSE:EIX) is a California-based public utility holding company that provides industrial and commercial energy services to its consumers. The company is one of the latest holdings of Duquesne Capital, as the hedge fund opened its position with shares worth over $18 million. The company represented 1.31% of billionaire Druckenmiller’s portfolio and is #10 on our list of 10 dividend stocks to buy according to billionaire Stanley Druckenmiller’s Duquesne Capital.
Edison International currently pays a quarterly dividend of $0.70 per share. The company last raised its dividend in December 2021, which marked its 18th consecutive year of dividend growth. As of September 8, the stock’s dividend yield stood at 4.12%.
In August, Mizuho maintained its Neutral rating on Edison International and highlighted the general market issues. The firm also expressed concerns regarding the company’s growing unrecoverable costs.
At the end of Q2 2022, 26 hedge funds tracked by Insider Monkey owned stakes in Edison International, up from 22 in the previous quarter. These stakes hold a collective value of over $1 billion. Among these hedge funds, Pzena Investment Management owned the largest position in the company in Q2.
ClearBridge Investments mentioned Edison International in its Q4 2021 investor letter. Here is what the firm has to say:
“Defensive sectors such as utilities underperformed the broader market, with our California-based utilities, Edison International, generating modestly below-sector returns on continuing wildfire concerns, despite significantly improved financial exposure due to the 2019 legislation AB 1054. The legislation was a major positive step toward reducing wildfire risk to California public utilities, which we expect to be reflected in improved valuations over time.”
Alongside Freeport-McMoRan Inc. (NYSE:FCX), Chevron Corporation, and Eli Lilly and Company, Edison International is also one of the most prominent dividend holdings of billionaire Druckenmiller’s portfolio that’s also held by many hedge funds in Q2 2022.
9. Westlake Corporation (NYSE:WLK)
Number of Hedge Fund Holders: 28
Dividend Yield as of September 8: 1.46%
Westlake Corporation (NYSE:WLK) is an American petrochemical company that manufactures and supplies petrochemicals, polymers, and other related products. The company’s products are widely used in the housing and construction sectors. On August 13, it declared a 20% hike in its quarterly dividend to $0.357 per share, with a dividend yield of 1.46%, as recorded on September 8. The company has been making uninterrupted dividend payments since its IPO in 2004. It also maintains a 19-year track record of consistent dividend growth.
Duquesne Capital initiated its position in Westlake Corporation during the second quarter of 2022, purchasing 145,520 shares. The hedge fund’s total stake in the company amounted to over $14.2 million, which represented 1.03% of its 13F portfolio.
In September, Credit Suisse initiated its coverage of Westlake Corporation with an Outperform rating and a $120 price target. The firm highlighted the company’s growing sales of building products and its margin trends.
As of the close of Q2 2022, 28 hedge funds tracked by Insider Monkey owned stakes in Westlake Corporation, down from 37 in the previous quarter. These stakes hold a collective value of over $372 million, compared with $470.6 million worth of stakes owned by hedge funds in the preceding quarter.
8. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 38
Dividend Yield as of September 8: 4.49%
Phillips 66 (NYSE:PSX) is a Texas-based energy company that specializes in petroleum refining. In addition to this, the company transports and markets natural gas liquids and petrochemicals. In July, Barclays raised its price target on the stock to $113 with an Overweight rating on the shares due to the company’s strong quarterly earnings. The firm also appreciated the company’s strategic management.
Duquesne Capital sold off its $24.3 million worth of stake in Phillips 66 (NYSE:PSX) during the third quarter of 2014. The hedge fund again bought shares in the company in Q1 2022 and increased its position by 6% in the recent quarter. The hedge fund owned 119,380 PSX shares in Q2 2022, worth over $9.7 million. The company accounted for 0.7% of billionaire Druckenmiller’s portfolio.
Phillips 66 (NYSE:PSX) holds a stable history of dividend payments. The company has raised its dividends 11 times since its inception in 2012 at a CAGR of 18%. It currently offers $0.97 per share quarterly dividends, with a yield of 4.49%, as of September 8.
D. E. Shaw owned stakes worth over $282 million in Phillips 66 (NYSE:PSX), becoming the company’s leading stakeholder in Q2 2022. Overall, 38 hedge funds in Insider Monkey’s database owned stakes in the company in Q2, worth over $1.07 billion.
7. Coterra Energy Inc. (NYSE:CTRA)
Number of Hedge Fund Holders: 40
Dividend Yield as of September 8: 2.06%
Another prominent dividend stock in billionaire Druckenmiller’s portfolio is Coterra Energy Inc. (NYSE:CTRA), which specializes in the exploration of hydrocarbon. The company also engages in the development and exploration of oil and gas properties. At the end of June 2022, the company was a part of 40 hedge fund portfolios, up from 39 in the previous quarter, according to Insider Monkey’s data. The stakes owned by these funds are collectively valued at over $437.3 million.
Duquesne Capital has been investing in Coterra Energy Inc. since the third quarter of 2013 when the hedge fund purchased shares worth over $25.7 million. In Q2 2022, the hedge fund owned nearly 1.4 million CTRA shares, worth over $35.7 million. The company constituted 2.58% of its 13F portfolio.
Coterra Energy Inc. declared a quarterly dividend of $0.65 per share in August, consistent with its previous dividend. The company has been raising its dividends consistently for the past five years. As of September 8, the stock’s dividend yield came in at 2.06%.
In August, Barclays raised its price target on Coterra Energy Inc. to $43 with an Equal Weight rating on the shares, highlighting the sector’s free cash flow yield.
Palm Valley Capital Management mentioned Coterra Energy Inc. in its Q2 2022 investor letter. Here is what the firm has to say:
“We sold two Fund positions during the quarter which includes Coterra Energy (NYSE:CTRA). As a result of surging oil and natural gas prices, Coterra reached our valuation, and we exited the position in April.”
6. Cenovus Energy Inc. (NYSE:CVE)
Number of Hedge Fund Holders: 42
Dividend Yield as of September 8: 1.86%
Cenovus Energy Inc. (NYSE:CVE) is a Canadian natural gas company that develops the country’s valuable oil and natural gas resources. The company currently pays a quarterly dividend of C$0.105 per share and has a yield of 1.86%, as recorded on September 8. Cenovus Energy Inc. also ranks among the 10 dividend stocks to buy according to billionaire Stanley Druckenmiller’s Duquesne Capital.
Duquesne Capital resumed its position in Cenovus Energy Inc. during the first quarter of 2021, after selling off its entire CVE stake worth roughly $10 million during the third quarter of 2018. In Q2 2022, the hedge fund owned over 1 million shares in the company, valued at over $20.3 million. The company represented 1.47% of billionaire Druckenmiller’s portfolio and is his important holding among other stocks like Microsoft Corporation, Chevron Corporation, and Eli Lilly and Company.
In August, Credit Suisse initiated its coverage of Cenovus Energy Inc. with an Outperform rating and a C$37 price target.
As per Insider Monkey’s database for Q2 2022, 42 hedge funds reported owning stakes in Cenovus Energy Inc., compared with 44 in the previous quarter. These stakes hold a collective value of nearly $3 billion. Soroban Capital Partners owned the largest stake in the company in Q2, worth roughly $957 million.
L1 Capital mentioned Cenovus Energy Inc. in its Q4 2021 investor letter. Here is what the firm has to say:
“Detailed, bottom-up stock research remains the investment team’s primary focus and the core driver of portfolio performance. 2021 once again demonstrated the team’s ability to identify ‘winners’ through extensive company and industry research across a diverse range of sectors. Key contributors included Cenovus Energy, (due to) recovering oil price leading to improved investor sentiment, consensus earnings upgrades and strong free cashflow generation.”
Like Cenovus Energy Inc., Freeport-McMoRan Inc., Chevron Corporation, and Eli Lilly and Company are dividend stocks in billionaire Stanley Druckenmiller’s Duquesne Capital Q2 2022 portfolio that are also widely held by hedge funds.
5. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders: 52
Dividend Yield as of September 8: 1.30%
EQT Corporation (NYSE:EQT) is an American energy company that specializes in the exploration of hydrocarbon and pipeline transport. The company is one of the latest holdings of Duquesne Capital, as the hedge fund bought 259,055 shares in the company in the recent quarter. The fund’s total stake in the company stood at roughly $9 million, which represented 0.64% of its 13F portfolio.
On July 20, EQT Corporation announced a 20% hike in its quarterly dividend to $0.15 per share. As of September 8, the stock’s dividend yield stood at 1.30%.
In August, Mizuho lifted its price target of EQT Corporation to $59 with a Buy rating on the shares. The firm presented a positive outlook for Exploration and Production sector and expects it to outperform the broader market in the current market situation.
As of the close of Q2 2022, 52 hedge funds tracked by Insider Monkey owned investments in EQT Corporation, ranking the stock as among our list of 5 and 10 dividend stocks to buy according to billionaire Stanley Druckenmiller’s Duquesne Capital. The hedge fund’s investments hold a collective value of over $2.28 billion. Dan Loeb’s Third Point was the company’s leading stakeholder in Q2.
ClearBridge Investments mentioned EQT Corporation in its recently-published Q2 2022 investor letter. Here is what the firm has to say:
“We initiated a position in EQT (NYSE:EQT), the largest natural gas producer in the U.S., which possesses high-quality acreage within the Marcellus Shale basin. EQT has benefited from tight supply and demand dynamics as cleaner-burning natural gas takes global share from coal and exports to Europe and Asia provide an avenue of demand growth. Longer-term contracts enhance EQT’s earnings visibility as Europe eliminates its dependence on Russian gas.”
4. Pioneer Natural Resources Company (NYSE:PXD)
Number of Hedge Fund Holders: 56
Dividend Yield as of September 8: 10.85%
Up next on our list of dividend stocks in billionaire Druckenmiller’s portfolio is Pioneer Natural Resources Company (NYSE:PXD), which is an American company that is engaged in the exploration of hydrocarbon. In August, Barclays reiterated its Overweight rating on the stock with a $309 price target, highlighting the company’s dividend yield and its buyback program.
Duquesne Capital initiated its position in Pioneer Natural Resources Company during the third quarter of 2012, purchasing shares worth over $26 million. In Q2 2022, the hedge fund owned 48,455 PXD shares, worth over $10.8 million. The company accounted for 0.78% of the fund’s 13F portfolio.
Pioneer Natural Resources Company has a long history of offering dividends to shareholders. On August 2, the company declared a base-plus-variable cash dividend of $8.57 per share. The stock has a dividend yield of 10.85%, as of September 8. Given the base-plus-variable cash dividend policy, Pioneer Natural Resources Company dividend could rise if oil prices rise or decline if energy prices fall.
The number of hedge funds tracked by Insider Monkey owning stakes in Pioneer Natural Resources Company grew to 56 in Q2 2022, from 54 in the previous quarter. These stakes hold a consolidated value of roughly $697 million.
3. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 56
Dividend Yield as of September 8: 2.11%
Freeport-McMoRan Inc. is an Arizona-based mining company that is also one of the world’s largest producers of molybdenum and also operates one of the largest gold mines in the world. The company was the fifth-largest holding of Duquesne Capital in Q2 2022. The hedge fund owned over 3.2 million shares in the company, worth over $94.5 million. The company made up 6.84% of billionaire Druckenmiller’s portfolio.
Freeport-McMoRan Inc. currently pays a quarterly dividend of $0.15 per share. As of September 8, the stock’s dividend yield came in at 2.11%.
In July, RBC Capital maintained its Sector Perform rating on Freeport-McMoRan Inc. with a $35 price target. The firm acknowledged the company’s performance in the recent quarter, highlighting its improving revenues.
As of the end of June 2022, 56 hedge funds tracked by Insider Monkey owned stakes in Freeport-McMoRan Inc., down from 68 in the previous quarter. These stakes hold a combined value of over $2.47 billion.
Carillon Tower Advisers mentioned Freeport-McMoRan Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“Supply chains eased for some goods, but remained challenged for many commodities including energy, agriculture, and fertilizer due to war and general scarcity, and also in many consumer products as semiconductors remained in short supply. Copper and gold producer Freeport- McMoRan (NYSE:FCX) rose as copper prices remained strong due to supply shortages and growing use in renewable energy systems and electric vehicles.”
2. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 59
Dividend Yield as of September 8: 3.66%
Chevron Corporation is a California-based energy industry company that deals in the exploration of oil and natural gas. The company currently offers a quarterly dividend of $1.42 per share, with a dividend yield of 3.66%, as recorded on September 8. It has been consistently raising its dividends for the past 35 years, coming through as one of the best dividend stocks in billionaire Druckenmiller’s portfolio.
Chevron Corporation was the third-largest holding of Duquesne Capital in Q2 2022. The hedge fund owned 830,435 shares in the company, worth $120.2 million. The company represented 8.69% of the fund’s 13F portfolio.
In August, BMO Capital raised its price target on Chevron Corporation to $180 with an Outperform rating on the shares, highlighting the company’s strong operational performance, asset base, and financial strength.
Warren Buffett’s Berkshire Hathaway owned stakes worth over $23.3 billion in Chevron Corporation, becoming the company’s leading stakeholder in Q2 2022. Overall, 59 hedge funds in Insider Monkey’s database owned stakes in the energy company in Q2, up from 53 in the previous quarter. These stakes hold a collective value of over $26 billion.
Diamond Hill Capital mentioned Chevron Corporation in its Q1 2022 investor letter. Here is what the firm had to say:
“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 70
Dividend Yield as of September 8: 1.26%
Eli Lilly and Company is an American pharmaceutical company that has operations in 18 countries and sells its products in over 125 countries. The company was a popular buy among elite funds in Q2 2022, as 70 hedge funds tracked by Insider Monkey were bullish on it, compared with 53 in the previous quarter. These stakes hold a collective value of over $6.7 billion.
Eli Lilly and Company was the recent holding of Duquesne Capital, as the hedge fund opened its position in the company with 297,150 shares. The fund’s total stake in the company amounted to over $96.3 million, which represented 6.97% of its 13F portfolio.
Eli Lilly and Company has consistently paid dividends to shareholders since 1885 and has been raising its payouts for the past 8 consecutive years. It currently pays a quarterly dividend of $0.98 per share, with shares boasting a dividend yield of 1.26%, as of September 8.
In August, Citigroup lifted its price target on Eli Lilly and Company to $370 with a ‘Buy’ rating on the shares, calling the stock an attractive opportunity in the current economic landscape.
Baron Funds mentioned Eli Lilly and Company in its Q2 2022 investor letter. Here is what the firm had to say:
“Eli Lilly and Company is a global pharmaceutical company focused on discovering, developing, and selling medicines for patients in the therapeutic areas of diabetes, oncology, immunology, and neuroscience. Stock performance was strong due to positive study results for Eli Lilly’s drug Tirzepatide (subsequently branded Mounjaro), which delivered up to 22.5% weight loss in adults with obesity. We think Tirzepatide is in the early innings of adoption in a large obesity market where penetration of anti-obesity medications is currently low. We continue to think Eli Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to solid revenue and earnings growth over many years.”
You can also take a look at 10 Dividend Stocks to Buy According to Billionaire Paul Tudor Jones’ Tudor Investment Corp and 10 Dividend Stocks to Buy According to Billionaire Carl Icahn’s Icahn Capital LP
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This article is originally published at Insider Monkey.
