5 Best Dividend Stocks to Buy According to Billionaire James Dinan

4. International Flavors & Fragrances Inc. (NYSE: IFFT)

Dinan’s Stake Value: $4,041,000
Percentage of James Dinan’s 13F Portfolio: 0.58%
Dividend Yield: 2.21%
Number of Hedge Fund Holders: 33

International Flavors & Fragrances Inc. (NYSE: IFFT) produces and sells cosmetic active and natural health ingredients used to manufacture consumer products. It is placed fourth on our list of 10 best dividend stocks to buy according to billionaire James Dinan. 

The company recently announced financial results for Q1 2021, in which net sales increased 83% YoY to $2.47 billion. The increase is attributed to jump in sales from the merger with Nutrition & Biosciences (“N&B”).

International Flavors & Fragrances Inc. (NYSE: IFFT) declared a $0.77/share quarterly dividend based on the impressive results. In March, James Targett from Barenberg upgraded the company’s stock to “Buy” from “Hold” and raised the price target to $160 from $139.

In its Q1 2021 investor letter, Rhizome Partners, an asset management firm, highlighted a few stocks and International Flavors & Fragrances Inc. (NYSE: IFFT) was one of them. Here is what the fund said:

“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as  IFF. We do understand the market’s rationale. IFF’s products account for a small percentage of the customers’ cost while playing critical roles in the products’ performance. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”