In this article, we will look at 10 dividend stocks to buy according to billionaire Steve Cohen. If you want to skip our detailed analysis of these stocks, Steve Cohen’s early beginnings, and Point72 Asset Management’s performance over the past years, you can go directly to 5 Dividend Stocks to Buy According to Billionaire Steve Cohen.
Steve Cohen is an American billionaire and the hedge fund manager of Point72 Asset Management. According to Forbes, as of 2021, Mr. Cohen is the 5th richest hedge fund manager with a net worth of approximately $16 billion, up from $14.5 billion in 2020. As of September 30th, Steve Cohen manages over $22.76 billion in 13F securities through his hedge fund, Point72 Asset Management.
Mr. Cohen was an Economics major at the University of Pennsylvania, from where he graduated in 1978. Mr. Cohen was then recruited as a junior trader at Gruntal & Co where he stayed until 1992. After leaving Gruntal & Co, the billionaire founded SAC Capital with a total investment of $25 million.
The Evolution of Cohen’s Investment Philosophy
Steve Cohen’s investment strategies have evolved over time. The billionaire’s initial approach towards managing equities at SAC Capital was to encourage rapid-fire trading. Mr. Cohen would be trading more than 20 million shares every day, holding onto trading positions for not more than a few days, and sometimes only a few hours.
However, as market and investing trends changed, so did Mr. Cohen’s strategies. The billionaire investor started targeting long-short and fixed income equities.
In 2006, The Wall Street Journal reported that while Mr. Cohen was a rapid-fire trader who never held onto stocks for long, he had started holding trading positions for longer periods of time. Steve A. Cohen’s strategies have almost always worked out since the billionaire made a fortune during his days at SAC. The hedge fund’s returns, from inception till its closing in 2013, were averaged around 25%.
In 2014, Steve A. Cohen founded Point72 Asset Management as a family office. After waiting out the two-year ban, the firm opened itself for outside money in 2018. In 2020 the Point72 Asset Management reported a 16% gain, making it the fund’s best year since its reopening. However, in January of 2021, Mr. Cohen invested $750 million in Melvin Capital, which was suffering losses as a result of attacks on short bets by retail investors. This move triggered a community of Reddit investors, which cost Point72 Asset Management losses between 10% and 15%.
Among the top holdings of Point72 Asset Management, we have Microsoft Corporation (NASDAQ:MSFT), Visa Inc (NYSE:V), Mastercard Incorporated (NYSE:MA), and International Business Machines Corp. (NYSE:IBM).
However, for the purposes of this list, we will take a look at the 10 dividend stocks on Mr. Cohen’s 13F portfolio that have the highest yields.
Our Methodology
We scoured Point72 Asset Management’s investment portfolio to find the stocks that pay dividends. We narrowed our selection down to stocks that yielded more than 2%.
These stocks were ranked according to Point72 Asset Management’s investment portfolio at the end of the third quarter of 2021.
Dividend Stocks to Buy According to Billionaire Steve Cohen
10. Sibanye Stillwater Limited (NYSE:SBSW)
Stake Value of Point72 Asset Management: $940,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0%
Number of Hedge Fund Holders: 9
Dividend Yield as of December 12: 13.63%
Sibanye Stillwater Limited (NYSE:SBSW) operates as a precious metals mining company in South Africa, the United States, Zimbabwe, Canada, and Argentina. As of December 12th, Sibanye Stillwater Limited (NYSE:SBSW) has a forward yield of 13.63% and a price-to-earnings ratio of 3.47.
By the end of the third quarter of 2021, Sibanye Stillwater Limited (NYSE:SBSW) was present in 9 hedge fund portfolios. The total stakes of these hedge funds in the company were over $141.72 million. Mr. Cohen’s stake in Sibanye Stillwater Limited (NYSE:SBSW) as of 30th September was valued at $940,000.
This October, Deutsche Bank analyst Abhi Agarwal initiated coverage of Sibanye Stillwater Limited (NYSE:SBSW) and assigned the stock a Buy rating along with a $19 price target.
Here is what Desert Lion Capital has to say about Sibanye Stillwater Limited in its first-quarter 2021 investor letter:
“Sibanye is a South African gold and platinum group metals (“PGM”) producer with mines in South Africa and the U.S. Established in 2012, it has since become one of South Africa’s largest gold producers and the largest PGM producer in the world. Sibanye also operate a PGM recycling facility and own a majority interest in DRDGOLD, a specialist in the recovery of gold and other precious metals from open pit tailings.
The investment thesis incorporates the following logic:
- If central banks globally are going to continue printing money unabated, precious metals prices should rise.
- The drive for cleaner and greener is accelerating. The market for platinum, palladium and rhodium is structurally attractive.
- The company is generally mischaracterized. Ask around, and one will find that most people still refer to Sibanye as “a South African gold miner” with “lots of debt from that Stillwater acquisition.”
- It is not quick and easy to ramp up PGM supply in response to higher demand and prices. Favorable supply-demand characteristics will likely remain favorable for longer.
- Bad capital allocation decisions, corporate excesses, and resultant tarnished reputations from the previous boom period are still fresh in the minds of most mining executives. Neal Froneman has proven himself a disciplined capital allocator. His approach to capital allocation is straightforward: deploy capital at expected returns that enhances value to shareholders or distribute it via dividends and buybacks.
- The company is debt-free and generating heaps of cash.
- The valuation is cheap. At current metal prices, Sibanye is trading at about 5 times after-tax cash profits.
Sibanye is effectively a call option on a potential commodity super cycle. In the meantime, the value of our “option” is unlikely to deteriorate as we are rewarded with healthy dividend flows.”
9. Takeda Pharmaceutical Company Limited (NYSE:TAK)
Stake Value of Point72 Asset Management: $21,292,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.15%
Number of Hedge Fund Holders: 15
Dividend Yield as of December 12: 5.94%
Takeda Pharmaceutical Company Limited (NYSE:TAK) engages in the research, development, manufacturing, marketing, and out-licensing of pharmaceutical products worldwide.
This October, Jefferies analyst Stephen Barker upgraded Takeda Pharmaceutical Company Limited (NYSE:TAK) to Buy from Hold and reiterated a $35 price target.
By the end of the third quarter of 2021, Insider Monkey identified Takeda Pharmaceutical Company Limited (NYSE:TAK) on 15 investment portfolios. The total stakes that these hedge funds had in the company exceeded $443.62 million.
Like Microsoft Corporation (NASDAQ:MSFT), Visa Inc (NYSE:V), Mastercard Incorporated (NYSE:MA), and International Business Machines Corp. (NYSE:IBM), Mr. Cohen has significant stakes in Takeda Pharmaceutical Company Limited (NYSE:TAK).
8. Enbridge Inc (NYSE:ENB)
Stake Value of Point72 Asset Management: $28,233,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.12%
Number of Hedge Fund Holders: 24
Dividend Yield as of December 12: 7.20%
Enbridge Inc (NYSE:ENB) operates as an energy infrastructure company. The company operates through five segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services. This December, the company declared its 27th consecutive annual common share dividend raise and upped the dividend by 3%. The dividend will be effective as of March 1st, 2022. The stock’s forward yield as of December 12 stands at 7.20%.
On November 8th, RBC Capital analyst Robert Kwan raised his price target on Enbridge Inc (NYSE:ENB) to CA $61 from CA $57 and reiterated an Outperform rating on the shares.
ClearBridge Investments, an investment management firm, published its “Global Infrastructure Value Strategy” second quarter 2021 investor letter, in which it mentioned Enbridge Inc (NYSE:ENB). Here’s what the firm had to say:
“On a regional basis, the U.S. and Canada was the top contributor to quarterly performance, of which Canadian energy infrastructure company Enbridge was one of the lead performers. Enbridge owns and operates one of the largest oil and gas pipeline networks in North America. The company also owns regulated gas distribution utilities in Ontario, Canada. Enbridge’s Line 3 Replacement Project received a favorable court ruling regarding the adequacy of its Environmental Impact Statement. This significantly lowers the execution risk for the project and enables the company to place the project into service later in the year.”
7. AT&T Inc. (NYSE:T)
Stake Value of Point72 Asset Management: $30,317,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 66
Dividend Yield as of December 12: 9.11%
AT&T Inc. (NYSE:T) provides telecommunication, media, and technology services worldwide. The company operates through Communications, WarnerMedia, and Latin America segments.
For the quarter ending this September, AT&T Inc. (NYSE:T) turned over revenues of $39.92 billion and beat on EPS. The company reported an EPS of $0.87, beating expert estimates by $0.08.
AT&T Inc. (NYSE:T) was found to be a part of 66 hedge fund portfolios, including Point72 Asset Management, by the end of the third quarter of 2021. The total stake value of these funds in the company was in excess of $3.21 billion, up from $2.89 billion in the previous quarter with 68 identified positions.
AT&T Inc. (NYSE:T) is one of the top dividend stocks to buy according to billionaire Steve Cohen. Other popular stocks among the billionaire’s top picks include Microsoft Corporation (NASDAQ:MSFT), Visa Inc (NYSE:V), Mastercard Incorporated (NYSE:MA), and International Business Machines Corp. (NYSE:IBM).
6. Plains GP Holdings LP (NYSE:PAGP)
Stake Value of Point72 Asset Management: $17,974,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 12
Dividend Yield as of December 12: 7.24%
Plains GP Holdings LP (NYSE:PAGP) owns and operates midstream energy infrastructure in the United States and Canada. It operates through three segments: Transportation, Facilities, and Supply and Logistics. On November 29th, Barclays analyst Christine Cho reinstated coverage of Plains GP Holdings LP (NYSE:PAGP) with an Equal Weight rating.
There were 12 hedge funds in Insider Monkey’s database that held stakes in Plains GP Holdings LP (NYSE:PAGP) by the end of the third quarter of 2021. These stakes exceeded $73.98 million. Point72 Asset Management’s stake in Plains GP Holdings LP (NYSE:PAGP) by the end of September 2021 was valued at $17.97 million.
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Disclosure. None. 10 Dividend Stocks to Buy According to Billionaire Steve Cohen is originally published on Insider Monkey.
