In this article, we will look at 5 dividend stocks to buy according to billionaire Steve Cohen. If you want to see our detailed analysis of these stocks, Steve Cohen’s early beginnings, and Point72 Asset Management’s performance over the past years, you can go directly to 10 Dividend Stocks to Buy According to Billionaire Steve Cohen.
5. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Stake Value of Point72 Asset Management: $7,940,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 21
Dividend Yield as of December 12: 23.71%
Star Bulk Carriers Corp. (NASDAQ:SBLK) operates as a shipping company that engages in marine transportation of dry bulk cargoes worldwide. The company’s vessels transport a range of major bulks, including iron ores, coal, and grains, as well as minor bulks, such as bauxite, fertilizers, and steel products.
This November, the company announced that its board of directors has declared a quarterly cash dividend of $1.25 per share on the company’s common stock, up 78.6% from the previous dividend of $0.70 per share. The dividend will be payable by December 22nd, to shareholders of record on December 10th.
On 13th September 2021, H.C. Wainwright analyst Magnus Fyhr initiated coverage of Star Bulk Carriers Corp. (NASDAQ:SBLK) with a Buy rating and $35 price target.
Massif Capital mentioned Star Bulk Carriers Corp. (NASDAQ:SBLK) in its third-quarter 2021 investor letter. Here’s what the investment management firm had to say:
“We initiated one long position, one short position and exited one position during the third quarter. Our new long position was in Star Bulk Carriers (SBLK), a pure-play dry bulk operator with roughly 120 controlled vessels and 14 million tons of combined cargo capacity globally.
SBLK has one of the better management teams in the maritime shipping industry and the lowest cost structure among all dry bulk names. After announcing their new dividend policy in May, SBLK now has one of the best payout structures in shipping. The firm has paid out $0.3 and $0.7 per share in dividends for the first and second quarters of 2021. SBLK will most likely announce a dividend for the third quarter somewhere in the $1.15-$1.25 per
share range, depending on movement in net working capital.We believe the best way to look at this business is through cash generation potential and how much is returned to investors. The current equity valuation does not reflect current rates for shipping (earnings), partly because of the velocity of the move in rates and because shipping cycles turn, and it’s not clear whether this is a local top or the early innings of a multi-year cycle. Our belief is the latter. Part of our catalyst is the market re-rating the stock higher once the length of the increased earnings power becomes understood. It is a relatively strong catalyst in the sense that with a strong dividend policy, we can be patient for the market to underwrite this story as the cash is either returned to us via a high dividend yield if the market is either slow or chooses not to join our side of the trade.
Our estimates suggest a time-charter equivalent rate (net profit or loss of operating a vessel daily) of at least $30,000 for SBLK in Q4, with the firm earning a potential annual average of $26,000. Our base case is that this is a strong floor going into next year, with little need to articulate much more upside. If rates hold, which we expect them to do, we could see a 20+% annual dividend year next year for SBLK. If the market priced the equity such that the dividend yield was 8%, that implies a $62 stock. Today our base case target for the firm is $37 per share. This is likely conservative as we know that third-quarter rates are higher than the second quarter, and third-quarter dividends will most likely reflect that. We are cautious about diving too deep into the sensitivities to the upside with this position as we are arriving at some pretty remunerative torque using current contracted values and seemingly conservative forecasts…”
4. Equitrans Midstream Corporation (NYSE:ETRN)
Stake Value of Point72 Asset Management: $31,474,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 25
Dividend Yield as of December 12: 6.10%
Equitrans Midstream Corporation (NYSE:ETRN) owns, operates, acquires, and develops natural gas gathering, transmission and storage, and water services assets in the Appalachian Basin. It operates through three segments: Gathering System, Transmission and Storage System, and Water Service System.
Insider Monkey data showed 25 hedge fund positions, including Point72 Asset Management, for Equitrans Midstream Corporation (NYSE:ETRN) by the end of the third quarter of 2021.
On 28th September, BofA analyst Chase Mulvehill reinstated coverage of Equitrans Midstream Corporation (NYSE:ETRN) and gave the stock a Neutral rating and $11 price target.
3. Altria Group Inc (NYSE:MO)
Stake Value of Point72 Asset Management: $354,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0%
Number of Hedge Fund Holders: 45
Dividend Yield as of December 12: 7.98%
Altria Group Inc (NYSE:MO) manufactures and sells cigarettes, oral tobacco products, and wine in the United States. On December 8th, Altria Group Inc (NYSE:MO) announced that its board of directors declared a quarterly cash dividend on the company’s common stock of $0.90 per share. The stock has a forward yield of 7.98%, and the common stock cash dividend is payable on 10th January 2022, to shareholders of record on December 23rd, 2021.
By the end of the third quarter of 2021, there were 45 hedge funds in Insider Monkey’s database that held stakes in Altria Group Inc (NYSE:MO) that were in excess of $829.78 million.
Broyhill Asset Management, an investment management firm, mentioned Altria Group Inc (NYSE:MO) in its second-quarter 2021 investor letter. Here’s what they had to say:
“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
2. LyondellBasell Industries NV (NYSE:LYB)
Stake Value of Point72 Asset Management: $12,773,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.05
Number of Hedge Fund Holders: 39
Dividend Yield as of December 12: 5.03%
LyondellBasell Industries NV (NYSE:LYB) is a chemical company with operations in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally.
This October Christopher Parkinson, an analyst at Mizuho, initiated coverage of LyondellBasell Industries NV (NYSE:LYB) with a Buy rating and gave the stock a $125 price target.
Insider Monkey was able to spot LyondellBasell Industries NV (NYSE:LYB) among 39 hedge fund portfolios by the end of the third quarter of 2021. The total value of these hedge funds’ stakes was $676.59 million.
1. Rio Tinto Group (NYSE:RIO)
Stake Value of Point72 Asset Management: $3,819,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.01
Number of Hedge Fund Holders: 20
Dividend Yield as of December 12: 11.73%
Rio Tinto Group (NYSE:RIO) is involved in the exploration, mining, and processing of mineral resources worldwide. The company offers aluminum, copper, diamonds, gold, borates, titanium dioxide, salt, iron ore, and uranium. This November, the company announced its plans on expanding its smelter site in Canada, which will maximize low-carbon aluminum production.
By the end of the third quarter of 2021, 20 hedge funds had stakes in Rio Tinto Group (NYSE:RIO) that exceeded $1.33 billion. Mr. Cohen’s stake in the company was valued at $3.81 million, which covers 0.01% of Point72 Asset Management’s 13F portfolio.
On December 9th, Morgan Stanley analyst Alain Gabriel upgraded Rio Tinto Group (NYSE:RIO) to Overweight from Equal Weight.
You can also take a look at 10 Best Oil Stocks to Buy Amid Post-COVID Demand Boom and Price Volatility and 15 Best Energy Stocks to Buy Now.
