5 High Yield Dividend Stocks to Buy in August

4. Antero Midstream Corporation (NYSE: AM)

Number of Hedge Fund Holders: 17
Dividend Yield: 9.7%

Antero Midstream Corporation (NYSE: AM), an energy company, works to service increasing natural gas and natural gas liquid production in the Appalachian Basin. The company ranks 4th on our list of high yield dividend stocks to buy in August and is based in Denver, Colorado.

Morgan Stanley’s Mark Carlucci upgraded shares of Antero Midstream Corporation (NYSE: AM) this March from Underweight to Equal Weight, with a raised price target of $11 versus the previous $6 price target.

In the second quarter of 2021,  Antero Midstream Corporation (NYSE: AM) had an EPS of $0.23, beating estimates by $0.01. The company’s revenue was $232.79 million, up 5,94% year over year and also beating estimates by $11.9 million. Antero Midstream Corporation (NYSE: AM) has also gained 14.43% in the past 6 months and 20.58% year to date.

By the end of the first quarter of 2021, 17 hedge funds out of the 866 tracked by Insider Monkey held stakes in Antero Midstream Corporation (NYSE: AM) worth roughly $123 million. This is compared to 19 hedge funds in the previous quarter with a total stake value of approximately $141 million.

Bonhoeffer Capital Management, a value-oriented investment management firm, mentioned Antero Midstream Corporation (NYSE: AM) in its fourth-quarter 2020 investor letter. Here’s what they 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%.”