In this article we discuss the 5 best dividend stocks to buy according to billionaire James Dinan. If you want to read our detailed analysis of Dinan’s history and hedge fund performance, go directly to the 10 Best Dividend Stocks to Buy According to Billionaire James Dinan.
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5. Union Pacific Corporation (NYSE: UNP)
Dinan’s Stake Value: $4,451,000
Percentage of James Dinan’s 13F Portfolio: 0.64%
Dividend Yield: 1.93%
Number of Hedge Fund Holders: 68
Union Pacific Corporation (NYSE: UNP) is a specialist in the railroad business in the United States. The company mainly conducts its business operations through its subsidiary Union Pacific Railroad Company. It is ranked fifth on our list of 10 best dividend stocks to buy according to billionaire James Dinan.
In May, Union Pacific Corporation (NYSE: UNP) announced plans to open a new intermodal terminal to serve Southern California’s import distribution region. The company recently reported a net income of $1.3 billion, or $2.00 per diluted share in Q1 2021, a drop from $1.5 billion, or $2.15 per diluted share, reported in Q1 2020.
Union Pacific Corporation (NYSE: UNP) added 110 basis points to its operating ratio to 60.1%. The operating ratio was negatively affected by weather and rising fuel prices in the quarter. During the quarter, Union Pacific Corporation (NYSE: UNP) increased its quarterly dividend by 10.3% to $1.07 per share compared to $0.97 in Q1 2020. In January, Bernstein upgraded the stock to “Outperform” from “Market Perform.”
In its Q1 2021 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and International Union Pacific Corporation (NYSE: UNP) was one of them. Here is what the fund said:
“There was a slight change in Vltava Fund’s portfolio in the first quarter. We sold shares of Union Pacific. It was one of three stocks we bought a year ago at the market bottom. Although from a P/E viewpoint this was one of our most expensive purchases ever, the shares worked out quite well, and, when they were more than 90% higher at the beginning of this year, we decided to take profit and put the money into stocks with more attractive valuations.”
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.”
3. McDonald’s Corporation (NYSE: MCD)
Dinan’s Stake Value: $2,751,000
Percentage of James Dinan’s 13F Portfolio: 0.39%
Dividend Yield: 2.22%
Number of Hedge Fund Holders: 62
McDonald’s Corporation (NYSE: MCD) is a U.S beverage and restaurant company that operates McDonald’s restaurants across the U.S and worldwide. It is ranked third on our list of 10 best dividend stocks to buy according to billionaire James Dinan. The company has announced plans to increase salary of its workers at 650 of its stores in the U.S.
The company declared a $1.29 per share quarterly dividend, in line with the previous. In March, Brian Mullan from Deutsche Bank upgraded the stock to “Buy” from “Hold.”
2. JOYY Inc. (NASDAQ: YY)
Dinan’s Stake Value: $39,733,000
Percentage of James Dinan’s 13F Portfolio: 5.71%
Dividend Yield: 2.33%
Number of Hedge Fund Holders: 20
JOYY Inc. (NASDAQ: YY), a global video-based social media platform, is placed second on our list of 10 best dividend stocks to buy according to billionaire James Dinan.
Recently, the company announced its unaudited financial results for Q4 and full-year 2020. During the quarter, JOYY Inc. (NASDAQ: YY) reported RMB 3,783.5 million in net revenue compared to RMB 2,131.9 in Q4 2019, representing a whopping 77.5% increase.
During the quarter, the company reported a net loss from continuing operations attributable to controlling interest of RMB791.9 million (US$121.4 million), compared to net loss of RMB816.6 million in Q4 2019. The company declared a $0.51/ADS quarterly dividend, in line with the previous.
JOYY Inc. (NASDAQ: YY) has announced that the planned sales of its YY Live streaming business to Baidu, Inc. (NASDAQ: BIDU) for $3.6 billion is still on track.
In its Q1 2021 investor letter, Tao Value, an asset management firm, highlighted a few stocks and JOYY Inc. (NASDAQ: YY) was one of them. Here is what the fund said:
“We exited YY after 3.5 years near all-time high. The annualized return (13~%) yet is below expectation, especially compared to founder CEO David Xueling Li’s net worth (mainly in YY shares) ballooning from $1.1B in 2018 to $2.3B in 2021. On value realization, I think YY did a good job, acquiring Bigo, spinning off then selling Huya & selling YY Live to Baidu. But as a minority shareholder, we were treated unfairly. E.g. the Bigo deal (for buying shares from executives including Li) was done by YY stock when the price was severely depressed, causing significant dilution for our ownership. We learned our lessons and will evaluate more rigorously in management’s partnership mindset in the future.”
1. Lamar Advertising Company (REIT) (NASDAQ: LAMR)
Dinan’s Stake Value: $3,520,000
Percentage of James Dinan’s 13F Portfolio: 0.5%
Dividend Yield: 2.93%
Number of Hedge Fund Holders: 36
Lamar Advertising Company (REIT) (NASDAQ: LAMR) was founded in 1902 and is one of the largest outdoor advertising companies in North America, accounting for more than 357,500 displays in the U.S and Canada. It is ranked first on our list of 10 best dividend stocks to buy according to billionaire James Dinan.
In the financial report for Q1 2021, Lamar Advertising Company (REIT) (NASDAQ: LAMR) reported net revenue of $370.9 million compared to $406.6 million reported in Q1 2020. The company also reported a drop in net income to $38.3 million in Q1 2021 from $40.5 million in Q1 2020.
You can also take a peek at 10 Best Healthcare Dividend Stocks and 14 Best European Dividend Stocks To Buy.
