5 Best High Yield Dividend Stocks to Buy in June

4. Antero Midstream Corporation (NYSE: AM)

Dividend Yield as of June 11: 8.74%
Number of Hedge Fund Holders: 17

Ranking 4th in our list of 10 best high yield dividend stocks to buy in June is Antero Midstream Corporation (NYSE:AM). The midstream energy company was founded in 2013. On June 9, JonesTrading downgraded Antero Midstream Corporation to Hold.

Antero Midstream Corporation (NYSE:AM) posted its adjusted EBITDA of $219 million in the first quarter of 2021, a 1% increase from $217 million in the first quarter of 2020. AM shares currently trade for $10.36 and have a P/E ratio of 14.19. The current dividend yield is 8.74%. The 52-week price range of Antero Midstream Corporation (NYSE:AM) is $4.77-10.57. Shares of AM jumped 101.2% over the last twelve months.

Bonhoeffer Capital Management mentioned Antero Midstream Corporation (NYSE:AM) in its Q4 2020 investor letter: Here is what the fund said: 

“Public LBOs (32% of Portfolio; Quarterly Average Performance +25%)

This includes our broadcast TV franchises, leasing and roll-on/roll-off (RORO) shipping, and our natural gas pipeline firm. One trend in these levered firms is the increasing spread between bond yields and the firms’ free cash flow yield.

An example is Antero Midstream, whose FCF yield was 15% as of December 31, 2020, with a debt yield of 6% with the bond/equity FCF spread of 9%. This is a large spread given that Antero Midstream has completed its backbone infrastructure and gathering investment and capital expenditures should be small going forward. With natural gas prices rebounding, Antero Midstream cash flows become more secured as Antero Resources has more cash flow cushion in making payments to Antero Midstream. The recovery in natural gas prices is expected to continue as the economy opens up and low oil prices have shut down Permian oil wells that were generating almost-free associated natural gas. Antero Midstream’s FCF yield of 15% is also higher than similarly secured Antero subordinated debt with a yield of 7.8%.”