In this article we discuss the 5 best dividend stocks to buy now according to billionaire Jim Simons. If you want to read our detailed analysis of Simons’ history and hedge fund performance, go directly to the 10 Best Dividend Stocks to Buy Now According to Billionaire Jim Simons.
5. Teekay LNG Partners L.P. (NYSE: TGP)
Simons’ Stake Value: $908,000
Percentage of Jim Simons’ 13F Portfolio: 0.001%
Dividend Yield: 7.52%
No. of Hedge Fund Holders: 9
Teekay LNG Partners L.P. (NYSE: TGP) is an energy industry company that deals with liquefied petroleum gas (LPG) and liquefied natural gas (LNG) transportation across the globe. In mid-April, it declared a Q1 2020 dividend of $0.2875 per share, a notable boost from the $0.25 per share dividend payout in the previous quarter. Teekay ranks fifth on the list of 10 best dividend stocks to buy now according to billionaire Jim Simons.
The company generated $152.8 million revenue in Q1, outperforming the consensus estimate by $3.97 million, and it registered a 9.2% gain YoY. Its non-GAAP EPS for the same quarterly period was $0.61, which was $0.02 higher than the consensus estimate.
B.Riley’s analyst Liam Burke assigned a “Buy“ rating to Teekay LNG Partners L.P. (NYSE: TGP) stock setting $13 as price target in February 2021.
Here is what Horos Asset Management has to say about Teekay LNG Partners L.P. (NYSE: TGP) in its Q2 2020 investor letter:
“We trimmed our exposure to the two Teekay companies after the strong rally they experienced in April from the March lows (Teekay Corp. rallied 120% while Teekay LNG 70%). In the case of Teekay LNG, the share price has been relatively flat since then, while the holding company Teekay Corp. has had a sharp decline and returned to its lows. What justifies this poor performance of the company on the stock market?
On the one hand, Teekay Corp. and Teekay LNG finally announced the expected transaction of the Incentive Distribution Rights (IDRs) that Teekay Corp. held over Teekay LNG. Specifically, Teekay LNG acquired the IDRs by issuing 10.75 million shares (around $120 million at the time of the transaction). As a reminder of the functioning of the IDRs, Teekay Corp. was entitled to receive an extraordinary dividend from Teekay LNG, provided that the latter exceeded certain minimum thresholds for earnings distributions to its shareholders. In addition, as we have mentioned in the past, Teekay Corp. controlled c.34% of Teekay LNG (31.7% via common shares and 2.0% via a General Partner agreement). In our opinion, this complex capital structure made it difficult to value both companies, so the transaction announced on May 11 looks positive to us. However, the terms of this transaction were somewhat disappointing from the perspective of Teekay Corp.’s shareholders—who now control 42.5% of Teekay LNG—so we adjusted our valuation of Teekay Corp. downwards.”
