5 Dividend Stock Picks of Ira Unschuld’s Brant Point Investment

3. LKQ Corporation (NASDAQ:LKQ)

Brant Point Investment Stake Value: $10,891,000
Percentage of Brant Point Investment’s 13F Portfolio: 0.94%
Number of Hedge Fund Holders: 38
Dividend Yield: 1.75%

LKQ Corporation (NASDAQ:LKQ) manufactures alternative and specialty components for automobiles and other vehicles in the United States. In October, LKQ Corporation (NASDAQ:LKQ) declared its first quarterly dividend of $0.25 per share.

For the fiscal third quarter of 2021, LKQ Corporation reported an EPS of $1.02, exceeding market predictions by $0.16. (NASDAQ:LKQ). The company’s revenue was $3.3 billion, up 8.2% year over year and beating estimates by $30 million.

Bonsai Partners cited LKQ Corporation in its first-quarter 2021 investor letter. Here is what the fund said:

“LKQ is the largest provider of alternative collision and mechanical automotive parts in the United States. In Europe, they are the leading distributor of general automotive maintenance parts and supplies. Its shares appreciated 20.1% during the quarter.

During the quarter, LKQ shared its fourth-quarter results: showing a slight revenue decline and a nearly 30% increase in quarterly profit Vs. the same period last year. COVID has proved a surprising catalyst for my investment thesis which revolves around optimizing their recent large acquisitions that were never efficiently integrated.

Admittedly, in addition to LKQ’s quarterly performance, thematically, there has been broad enthusiasm for “re-opening” trades, of which, LKQ has been a beneficiary. Most importantly, the prior overhang related to LKQ’s debt burden is now all but behind us. Their net debt to EBITDA ratio now sits below 2x, a stark change from the near 3x leverage ratio before the pandemic. At that time, LKQ’s leverage had the potential to spiral upward to nearly 4-5x if the business experienced a prolonged shutdown. It’s good to be past this issue.”