In this article, we will discuss the 5 dividend stocks to buy according to billionaire Kerr Neilson. If you want to read our detailed analysis of these stocks, you can go directly to 10 Dividend Stocks to Buy According to Billionaire Kerr Neilson.
5. Louisiana-Pacific Corporation (NYSE:LPX)
Platinum Asset Management’s Stake Value: $83,428,000
Percentage of Platinum Asset Management’s 13F Portfolio: 2.34%
Dividend Yield as of January 7: 0.94%
Louisiana-Pacific Corporation (NYSE:LPX) is a manufacturer and seller of building products for the construction, remodeling, and repair of houses and other outdoor structures. The Nashville, Tennessee-based company has mastered the production of oriented strand board (OSB) panels and engineered wood building products in the US. The company is the world’s biggest producer of OSB.
Louisiana-Pacific Corporation (NYSE:LPX) reported its Q3 2021 results on November 2. The company reported revenues of $1.22 billion as opposed to the estimate of $1.11 billion. Meanwhile, the adjusted EPS for the quarter was $3.87, compared to the analysts’ forecast of $3.42.
L1 Capital shared its stance on Louisiana-Pacific Corporation (NYSE:LPX) in its Q3 2021 investor letter. Here’s what the firm said:
“We reinvested the proceeds from the partial sale of Eagle Materials by increasing the Fund’s position in Louisiana-Pacific Corporation. We expect the company to deliver strong earnings and cashflow over coming years, and the company remains undervalued at its current share price.”
4. Intercontinental Exchange, Inc. (NYSE:ICE)
Platinum Asset Management’s Stake Value: $86,203,000
Percentage of Platinum Asset Management’s 13F Portfolio: 2.42%
Dividend Yield as of January 7: 0.98%
Intercontinental Exchange, Inc. (NYSE:ICE) was founded in 2000 and is an operator of 12 regulated exchanges and six clearing houses for commodity, equity, financial, and fixed income markets globally. The Atlanta, Georgia-based company accommodates nearly two-third of the traded crude oil futures and also houses the leading natural gas markets.
Earlier in January 2021, Intercontinental Exchange, Inc. (NYSE:ICE) announced that it would spin off its cryptocurrency exchange Bakkt Holdings, Inc. (NYSE:BKKT) and publicly list it on the NYSE through a merger with a special purpose acquisition company (SPAC). On the first day of trading on October 26, the stock price of Bakkt skyrocketed 234%.
Intercontinental Exchange, Inc. (NYSE:ICE) announced a Q4 2021 dividend of 33 cents per share on October 28. The quarterly dividend reflected a 10% increase from the same period last year. In a research note issued on November 2, Richard Repetto at Piper Sandler termed the Q3 2021 results as outstanding and shared that the outperformance was due to its under-stress segment Mortgage Technology. The analyst also highlighted the upward movement of Bakkt Holdings and believed that it is not fully priced into the fundamentals of Intercontinental Exchange stock. Repetto kept an Overweight rating on Intercontinental Exchange, Inc. (NYSE:ICE) with a price target of $145.
Oakmark Funds shared its views on Intercontinental Exchange, Inc. (NYSE:ICE) in its Q2 2021 investor letter. Here’s what the fund said:
“Intercontinental Exchange is one of the largest and, in our view, most successful financial exchange operators in the world. The company was created through a series of shrewd acquisitions executed by their founder and CEO Jeff Sprecher. Sprecher is one of the more capable CEOs we’ve evaluated, having demonstrated a long history of astute capital allocation and a willingness to act and adapt rapidly to new opportunities and competitive threats. Today, Intercontinental Exchange competes in three primary business segments: exchanges, fixed income/data services and mortgage technology. We believe each of these businesses exhibits attractive economic characteristics and that each should grow earnings well in excess of GDP over the long term. Despite this favorable long-term outlook, the company currently trades at a P/E ratio that is roughly in line with the S&P 500. We believe a business with Intercontinental Exchange’s strong competitive position, excellent management team and attractive growth outlook deserves to trade well above a market multiple. We like buying great businesses at average prices and believe Intercontinental Exchange represents a compelling opportunity to do just that.”
3. Gilead Sciences, Inc. (NASDAQ:GILD)
Platinum Asset Management’s Stake Value: $101,892,000
Percentage of Platinum Asset Management’s 13F Portfolio: 2.86%
Dividend Yield as of January 7: 3.93%
Gilead Sciences, Inc. (NASDAQ:GILD) is a biotech company that is focused on discovering, developing, and selling innovative medicines to cater to unmet medical needs across the globe. These medicines are discovered either through research or via acquisition. The Foster City, California-based company’s antiviral drug Veklury (remdesivir) was one of the first treatments for COVID-19. This has given an impetus to the top line and the bottom line of the company.
Gilead Sciences, Inc. (NASDAQ:GILD) announced a quarterly dividend of 71 cents per share following its Q3 2021 results on October 28. The stock’s forward yield as of January 7 is 3.93%. In addition to this, Gilead Sciences, Inc. (NASDAQ:GILD) has a share buyback plan in place as well, which has reduced the total outstanding shares from 1.7 billion to 1.25 billion in the past five years.
On December 6, Salveen Richter at Goldman Sachs initiated coverage on Gilead Sciences, Inc. (NASDAQ:GILD) with a Neutral rating and an $82 price target. The analyst anticipates the company to stay as the dominant player in the HIV area due to its blockbuster HIV treatment Biktarvy. Furthermore, the analyst has highlighted the current evolution of Gilead Sciences, Inc. (NASDAQ:GILD) into a more diversified biopharma company.
2. Barrick Gold Corporation (NYSE:GOLD)
Platinum Asset Management’s Stake Value: $128,839,000
Percentage of Platinum Asset Management’s 13F Portfolio: 3.62%
Dividend Yield as of January 7: 1.94%
Barrick Gold Corporation (NYSE:GOLD) is an explorer, developer, and producer of gold and silver properties. The Toronto, Ontario-based company has projects spread across 13 countries globally and a stable production outlook for the next five to 10 years. Furthermore, there is a potential of increasing production if the company looks further into the possibility of developing the Donlin property in Alaska with NovaGold. Barrick Gold Corporation (NYSE:GOLD) has a 50% stake in the project. Research has shown that the mine has a life of over 30 years with an expected annual production of 1.1 million ounces of gold. The mine is expected to produce 1.5 million ounces of gold annually during the first five years. If the project goes through then, it can add around 30% to Barrick Gold’s current production profile of around 4.5 million ounces of gold. Furthermore, Barrick Gold Corporation (NYSE:GOLD) is intending to bring the Porgera assets back online, which will be a catalyst in future production increases.
Kerr Neilson held over 7.1 million shares in Barrick Gold Corporation (NYSE:GOLD), worth nearly $129 million at the end of Q3 2021. The investment represents 3.62% of the overall portfolio, down from 4.57% in the preceding quarter.
Following the Q3 2021 earnings results, the company announced a nine-cent dividend per share. The stock has a forward dividend yield of 1.94% as of January 7. In addition to this, Barrick Gold Corporation (NYSE:GOLD) announced the third and final tranche of a special dividend of 14 cents per share or $250 million to be paid along with the quarterly dividend. The first two tranches of $250 million were paid in June 2021 and September 2021.
1. Microchip Technology Incorporated (NASDAQ:MCHP)
Platinum Asset Management’s Stake Value: $301,756,000
Percentage of Platinum Asset Management’s 13F Portfolio: 8.49%
Dividend Yield as of January 7: 1.06%
Microchip Technology Incorporated (NASDAQ:MCHP) is a manufacturer of microcontroller and analog semiconductor products for the aerospace, automotive, computing, consumer, defensive, and industrial sectors, catering to more than 120,000 consumers around the world.
For Q3 FY22, Microchip Technology Incorporated (NASDAQ:MCHP) provided strong guidance as it expects revenue to be around $1.71 billion to $1.78 billion. This is higher than the analysts’ estimate of $1.68 billion. Meanwhile, Microchip Technology Incorporated (NASDAQ:MCHP) expects EPS to be around $1.14 to $1.20, which is also higher than the analysts’ forecast of $1.09.
Along with its quarterly results, the company also announced a 6.2% increase in quarterly dividends to 23.2 cents per share, resulting in a forward dividend yield of 1.06%. In addition to that, Microchip Technology Incorporated (NASDAQ:MCHP) boosted shareholder return by announcing a share buyback plan of $4 billion that replaced the previously implemented buyback plan of 30 million shares. Microchip Technology Incorporated (NASDAQ:MCHP) will execute the buyback plan from its cash flow from operations after capital expenditure and dividend payments.
On December 6, Mark Lipacis at Jefferies increased the price target on Microchip Technology Incorporated (NASDAQ:MCHP) stock from $98 to $109 while maintaining a Buy rating. The analyst highlighted the increase in dividends and the announcement of a share buyback plan along with investment-grade ratings received from Fitch and Moody’s in mid-November. Lipacis termed the stock as his top Risk vs. Reward idea.
You can also take a peek at the 10 Stocks to Invest in According to Victor Ho’s Yarra Square Partners and Echo Street Capital Management: Greg Poole’s Top 10 Stock Picks.
