In this article we discuss the 5 best dividend stocks to buy according to billionaire Paul Tudor Jones. If you want to read our detailed analysis of Jones’ history and hedge fund performance, go directly to the 10 Best Dividend Stocks to Buy According to Billionaire Paul Tudor Jones.
5. PennyMac Mortgage Investment Trust (NYSE: PMT)
Dividend Yield: 9.56%
Value: $1,536,000
Percent of Paul Tudor Jones’ 13F Portfolio: 0.0434%
No. of hedge Fund Holders: 15
PennyMac Mortgage Investment Trust (NYSE: PMT) a specialty finance company invests in residential mortgage loans and mortgage-related assets. PNMAC Capital Management, owned by PennyMac Financial Services, Inc. (NYSE: PFSI), manages PMT.
Earlier in March the company declared a cash dividend of $0.47. In February, David A. Spector, CEO of the company, assumed the role of Chairman and will and continue serving as CEO. For Q3 2020 the net income was $99.3 million and EPS was $0.94.
PennyMac Mortgage Investment Trust (NYSE: PMT) stock has yielded a return of 96.81% over the last 12 months.
4. Armour Residential REIT, Inc. (NYSE: ARR)
Dividend Yield: 9.87%
Value: $323,000
Percent of Paul Tudor Jones’ 13F Portfolio: 0.0091%
No. of hedge Fund Holders: 13
Armour Residential REIT, Inc. (NYSE: ARR) is a REIT managed and owned by ARMOUR Residential Management LLC to invest in the U.S real estate market. It has a particular interest in government-guaranteed and mortgage-backed residential securities. The REIT has an impressive 9.73% yield. It ranks 4th in the list of best dividend stocks to buy according to billionaire Paul Tudor Jones.
The company was off to a rather rough start in 2021 as its latest financials indicate that its comprehensive income for Q1 dropped to $29.1 million compared to the $60 million comprehensive income reported in Q4 2020. Its core income in Q1 was 23 cents per share, a notable decline from 32 cents per share in the previous quarter.
Armour Residential REIT, Inc. (NYSE: ARR) latest dividend payout was $0.10 per share, consistent with the previous dividend payout. It also announced the waiving of $2.4 billion worth of management fees. The goal was to use the funds to cover its operating expenses.
3. National Presto Industries, Inc. (NASDAQ: NPK)
Dividend Yield: 11.86%
Value: $296,000
Percent of Paul Tudor Jones’ 13F Portfolio: 0.0084%
No. of hedge Fund Holders: 9
National Presto Industries, Inc. (NASDAQ: NPK) produces small home-use cooking appliances. Originally it used to manufacture pressure canners. It operates mainly for the US Department of Defense. NPK ranks 3rd in the list of best dividend stocks to buy according to billionaire Paul Tudor Jones.
National Presto Industries, Inc. (NASDAQ: NPK) stock has generated a return of 24.50% in last one year. The company first changed its name to National Pressure Cooker Company in 1905 from Northwestern Steel and Iron Works. Later it changed its name to National Presto Industries in 1953.
Recently the company acquired OneEvent Technologies for $6.5 million. One of the products of OneEvent is monitoring home activity. As per a recent research the home security market will grow at CAGR of 20.6% by 2024. National Presto Industries can benefit from this segment by tapping the potential market in this segment.
2. Colony Credit Real Estate, Inc. (NYSE: CLNC)
Dividend Yield: 14.08%
Value: $249,000
Percent of Paul Tudor Jones’ 13F Portfolio: 0.007%
No. of hedge Fund Holders: 10
Colony Credit Real Estate, Inc. (NYSE: CLNC) is a commercial real estate credit REIT that manages a diversified portfolio of net lease real estate investments and real estate debt.
Last month, Matt Howlett, an analyst at B.Riley, initiated coverage on the stock and gave it a “Buy” rating. He has a price target of $11. Colony Credit ended its management agreement with Colony Capital, Inc. (NYSE: CLNY) and will now internalize it. Colony Capital will receive $102.3 million as part of the agreement. The internalization will help Colony Credit save $14 million to $16 million every year, which is $0.10 to $0.12 per share.
Colony Credit Real Estate, Inc. (NYSE: CLNC) has given a return of 92.58% over past one year to investors.
1. The GEO Group, Inc. (NYSE: GEO)
Dividend Yield: 17.50%
Value: $121,000
Percent of Paul Tudor Jones’ 13F Portfolio: 0.0034%
No. of hedge Fund Holders: 18
The GEO Group, Inc. (NYSE: GEO) offers a public repository for genomics data which supports the submission of MIAME-compliant data. The company’s capital structure has heavily relied on debt in the past, which means that it boosts its valuation each time it slashes its debt profile.
GEO’s board announced that the company would forego dividend payouts to divert more capital towards deleveraging. The move might seem unfavorable to investors, but it is a strategic move that could facilitate more substantial dividend payouts in the future. The company might issue an additional dividend payment to meet the minimum REIT distribution requirements.
The company plans to clear between $125 million and $150 million worth of debt this year. The company recently revealed 6.50% exchangeable senior unsecured notes worth $200 million, which will expire in 2026.
The GEO Group, Inc. (NYSE: GEO) reported a better-than-expected performance in Q4 2020. Its FFO per share during the quarter was 48 cents which outperformed the 45 cents estimate. However, it was still an underperformance considering that its FFO per share in Q4 of the previous year was 53 cents per share. Its Q4 2020 revenue was $578.1 million, which was higher than the $576.0 million average estimate provided by two analysts.
Miller Value Partners, in their Q4 2020 Investor Letter, mentioned that The GEO Group, Inc. (NYSE: GEO) was their top detractor in their fourth quarter 2020 results. Here is what Miller Value Partners has to say about The GEO Group, Inc. in their letter:
“GEO Group (GEO) was the top detractor over the quarter, falling 19.4%. The company reported Q3 revenue of $579.1M (-1% Quarter-over-Quarter (Q/Q)), net operating income of $151.4M (+2% Q/Q), and Earnings Before Income, Taxes, Depreciation, Amortization, and Restructuring (EBITDAR) of $112.1M (-1% Q/Q). Adjusted funds from operations (AFFO) of $0.67 drove 2.0x coverage on the quarterly dividend of $0.34/share (15.4% annualized yield). GEO exited the quarter with cash of $54M and net debt of $2.6Bn, which on TTM EBITDAR of $448.8M implies net leverage of 5.8x. Management lifted Fiscal Year (FY) 20 guidance across the board, including revenue +0.3% to $4.347Bn, Net Operating Income (NOI) +3% to $609M, EBITDAR +4.4% to $429M, and AFFO +5.6% to $2.44/share (28% FCF yield). Additionally, GEO maintained guidance for $100M of debt paydown in 2020 and a minimum of $50M each year moving forward, which coupled with savings from the previously announced reduced dividend will be applied towards debt reduction.”
You can also take a peek at Top 15 Dividend Stocks With Upside Potential and 10 Extreme Dividend Stocks with Huge Upside.
