In this article, we discuss the 9 dividend stock picks of David Einhorn’s Greenlight Capital.
David Einhorn founded Greenlight Capital in 1996 as a 27 year old with around $900,000 in startup capital, and currently serves as its President. He went to Cornell University where he graduated summa cum laude with a B.A. in Government from the College of Arts and Sciences in 1991. For the first 10 years of running Greenlight Capital, Einhorn posted annualized returns of 26 percent, beating broader markets and showing a keen eye for choosing the golden stocks of the day. In 2007, Einhorn shorted Lehman Brothers stock, citing suspect accounting practices and an overexposure to illiquid real estate investments. This proved a genius bet as the company declared bankruptcy in 2008, establishing Einhorn as a renowned investor and a feared critic on Wall Street. However, Greenlight Capital has not enjoyed the same trailblazing success in recent years, and has significantly underperformed peers and the market.
From approximately $12 billion in 2014, the fund’s assets under management (AUM) currently stand at $1.74 billion as of the fourth quarter of 2021. This downward journey was exacerbated by poor investor confidence resulting from short bets against Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Netflix, Inc. (NASDAQ:NFLX) which turned out to be extraordinarily misjudged. During the fourth quarter, Greenlight Capital’s top 10 holdings represented 75.69% of its entire portfolio. The fund made 12 new purchases in the quarter, made additional purchases in 7 stocks, and sold out of and reduced holdings in 13 stocks. However, for this article we’ll be focusing on the top dividend stock picks of David Einhorn’s Greenlight Capital.
David Einhorn of Greenlight Capital
Our Methodology
For the following list, we scoured through Einhorn’s 13F filings for the fourth quarter of 2021 and picked his top holdings which are dividend-payers. Hedge fund data around each stock has also been provided using Insider Monkey’s database of 924 elite hedge funds.
9. Civitas Solutions Inc (NYSE:CIVI)
Greenlight Capital’s Stake Value: $5.78 million
Greenlight Capital’s 13F Portfolio: 0.33%
Number of Hedge Fund Holders: 26
Dividend Yield (as of April 28): 3.08%
Civitas Solutions Inc (NYSE:CIVI) is a Colorado-based energy firm which explores for and produces oil and natural gas across the United States. David Einhorn’s fund Greenlight Capital owned 118,000 shares of Civitas Solutions Inc (NYSE:CIVI) in Q4 2021 with a price target of $5.78 million.
On March 8, Civitas Solutions Inc (NYSE:CIVI) declared a $1.2125 per share quarterly dividend, which was a 162.2% increase from its prior dividend of $0.4625. This included both fixed and variable dividend components. As of April 28, the firm offers shareholders a dividend yield of 3.08%.
Truist analyst Neal Dingmann on April 21 maintained a ‘Buy’ rating on Civitas Solutions Inc (NYSE:CIVI) shares and raised the price target to $95 from $88. He sees most firms in the exploration and production sector focusing on efficiencies and costs, and generating sizeable shareholder returns by taking advantage of continued strong commodity prices. Civitas Solutions Inc (NYSE:CIVI) posted $510.46 million in revenue for the fourth quarter of 2021, which showed an impressive jump of 715% from the year-ago quarter and outperformed estimates by $113.90 million. As of April 28, Civitas Solutions Inc (NYSE:CIVI) has seen its share price rise 76.24% in the last 12 months and 17% year-to-date.
Investors were piling into Civitas Solutions Inc (NYSE:CIVI) in the fourth quarter of 2021, where 26 hedge funds reported bullish bets on the company shares, as opposed to 20 hedge funds a quarter ago.
Just like Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Netflix, Inc. (NASDAQ:NFLX), Civitas Solutions Inc (NYSE:CIVI) is an exciting stock to consider.
8. News Corporation (NASDAQ:NWS)
Greenlight Capital’s Stake Value: $8.12 million
Greenlight Capital’s 13F Portfolio: 0.46%
Number of Hedge Fund Holders: 23
Dividend Yield (as of April 28): 0.98%
Then there’s News Corporation (NASDAQ:NWS), a media and information organization producing content under a range of brand names. The New York-based firm offers a 0.98% yield to shareholders as of April 28, and on February 3 declared a $0.10 per share semi-annual dividend, which was in-line with previous.
According to regulatory filings for the fourth quarter, David Einhorn’s Greenlight Capital owned 361,000 shares of News Corporation (NASDAQ:NWS) with a combined value of $8.12 million which represented 0.46% of the fund’s overall portfolio. Out of the hedge funds tracked by Insider Monkey, 15 hedge funds were long News Corporation (NASDAQ:NWS) shares in the fourth quarter with aggregate stakes worth $92.6 million. This shows improving investor confidence from the previous quarter where 13 hedge funds held $130.9 million worth of positions in the media company.
On February 28, News Corporation (NASDAQ:NWS) announced the acquisition of the Oil Price Information Service and related assets, including the Coal, Mining and Metals business from S&P Global (SPGI) and IHS Markit (INFO) in a $1.15 billion cash transaction. News Corporation (NASDAQ:NWS) also has an agreement to acquire the Base Chemicals business from S&P Global in a deal which is expected to close in the coming months.
On March 2, News Corporation (NASDAQ:NWS) announced its fourth quarter earnings and disclosed earnings per share of $0.44, beating estimates by $0.14. Quarterly revenue of $2.72 billion grew 12.55% year-on-year and also surpassed analysts’ forecasts by more than $78 million.
7. Concentrix Corporation (NASDAQ:CNXC)
Greenlight Capital’s Stake Value: $9.72 million
Greenlight Capital’s 13F Portfolio: 0.55%
Number of Hedge Fund Holders: 23
Dividend Yield (as of April 28): 0.62%
Next up on the list of dividend stock picks of David Einhorn is Concentrix Corporation (NASDAQ:CNXC), a provider of customer experience (CX) solutions which include business transformation services, CX process optimization, front-and-back office automation, analytics, and customer lifecycle management. Greenlight Capital owned a $9.72 million stake in the firm during the fourth quarter consisting of roughly 54,000 shares and representing 0.55% of the fund’s total holdings.
Hedge funds were seen buying up on Concentrix Corporation (NASDAQ:CNXC) in the fourth quarter of 2021, where 23 hedge funds held stakes in the firm worth $391.3 million. In comparison, 21 hedge funds held $589.9 million worth of positions in the firm a quarter ago. Lyrical Asset Management, the leading shareholder in Concentrix Corporation (NASDAQ:CNXC) during Q4 2021, held 767,000 shares of the firm valued at roughly $137 million.
On March 29, Concentrix Corporation (NASDAQ:CNXC) reported its earnings for the first financial quarter of 2022, and disclosed an EPS of $2.85, outperforming estimates by $0.14. The company raked in $1.54 billion in revenue for the quarter, which outperformed estimates by $2.39 million and showed a jump of 13.51% year-on-year.
Here is what investment firm FPA Queens Road had to say about Concentrix Corporation (NASDAQ:CNXC) in its Q4 2021 investor letter:
“Concentrix, a customer experience solutions provider, spun off from one of our other portfolio holdings (Synnex) in December of 2020, continued to validate its value proposition by adding over 24 new clients in the fourth quarter, continuing a trend. The company, which expects to achieve above-average market growth and improved margins, initiated a dividend during the year. Given the company’s growth expectations and what we believe to be a very reasonable valuation, we like the investment opportunity the company offers.”
6. Intel Corporation (NASDAQ:INTC)
Greenlight Capital’s Stake Value: $15.93 million
Greenlight Capital’s 13F Portfolio: 0.91%
Number of Hedge Fund Holders: 72
Dividend Yield (as of April 28): 3.12%
As of April 28, Intel Corporation (NASDAQ:INTC) has increased its dividend payment to shareholders for 19 years in a row. David Einhorn’s Greenlight Capital, according to 13F filings for the fourth quarter, owned 309,500 shares of Intel Corporation (NASDAQ:INTC) with a price tag of $15.93 million. This was a new addition to the fund’s portfolio during the quarter, and represented 0.91% of its overall holdings.
On April 8, Truist analyst William Stein lowered the firm’s price target on Intel Corporation (NASDAQ:INTC) to $49 from $53 and maintained a ‘Hold’ rating on the company shares. He sees a negative shift in demand for semiconductors across computers, consumer and communication sectors and contemplates negative growth and lower earnings multiples for the semiconductor industry. Intel Corporation (NASDAQ:INTC) posted an EPS of $1.09 for the fourth quarter, beating estimates by $0.18. Revenue of $19.53 billion for Q4 was above analysts’ forecasts by $1.21 billion.
Out of all the hedge funds tracked by Insider Monkey, 72 were long Intel Corporation (NASDAQ:INTC) in the fourth quarter of 2021, with aggregate stakes worth $5.5 billion. This shows improving investors confidence in the tech firm over the previous quarter where 66 hedge funds held $6.47 billion worth of positions in the company. Baupost Group was the top shareholder of Intel Corporation (NASDAQ:INTC) in Q4 2021, with a stake worth approximately $929 million and consisting of more than 18 million shares.
O’Keefe Stevens Advisory, an investment firm, talked about Intel Corporation (NASDAQ:INTC) in its Q1 2022 investor letter. Here’s what the fund said:
“Intel announced they are removing stock-based compensation from non-GAAP earnings in 2022 to report results aligning with semiconductor peers. This may seem like a reasonable thing to do as comparability between peers becomes easier. On the other hand, what exactly is the point of adjusted earnings? It is not to conform to some industry norm or because the management teams need to make performance metrics. The point of adjusting earnings is to present results in a light that more closely reflects the actual underlying performance of the business. That is, backing out expenses that might be one-time in nature, such as legal or fire expenses. First off, share-based compensation is an actual expense. Decreasing my ownership stake in a company without receiving any compensation is not free. If a company paid its employees in all stock, would they add back the entire SBC? What a margin profile that would be. Second, should a company be worried about reporting results similar to other companies? Every company is unique. Management should not waste time determining what expenses should be excluded. Run the business, don’t worry about adjusting the numbers.”
5. Graphic Packaging Holding Company (NYSE:GPK)
Greenlight Capital’s Stake Value: $16.23 million
Greenlight Capital’s 13F Portfolio: 0.92%
Number of Hedge Fund Holders: 36
Dividend Yield (as of April 28): 1.37%
Graphic Packaging Holding Company (NYSE:GPK) is up next on David Einhorn’s top dividend-paying stock picks. Investors were seen loading up on the firm in the fourth quarter of 2021, where 36 hedge funds reported bullish bets on the company shares, as opposed to 28 hedge funds a quarter ago. Impax Asset Management held a $170 million stake in Graphic Packaging Holding Company (NYSE:GPK) during the fourth quarter consisting of 8.78 million shares, making it the top shareholder of the firm.
Based in Georgia, United States, Graphic Packaging Holding Company (NYSE:GPK) provides fiber-based packaging solutions to a range of industries such as food, beverage, and other consumer product manufacturers. As of April 28, shares of the firm have climbed 18.37% in the last 12 months, and 11.50% in the year to date.
On April 8, Citi analyst Anthony Pettinari maintained a ‘Buy’ rating on Graphic Packaging Holding Company (NYSE:GPK) shares and increased the price target to $26 from $24. He expects upcoming earnings results to be ‘generally okay’ for the containers and packaging sector, but sees fiscal guidance potentially coming under risk due to weaker consumer sentiment, higher than expected inflation, and uncertainty around Europe and China.
For the first quarter of 2022, Graphic Packaging Holding Company (NYSE:GPK) reported an EPS of $0.48 which outperformed estimates by $0.10. $2.25 billion in quarterly revenue showed a jump of 36.14% from the year-ago quarter and also beat analysts’ forecasts by $57.17 million.
Here is what L1 Capital, an investment firm, had to say about Graphic Packaging Holding Company (NYSE:GPK) in its Q3 2021 investor letter:
“We reinvested the proceeds from the partial sale of Eagle Materials by increasing the Fund’s position in Graphic Packaging. We expect the company to deliver strong earnings and cashflow over coming years, and the company remains undervalued at its current share price.”
In addition to Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Netflix, Inc. (NASDAQ:NFLX), Graphic Packaging Holding Company (NYSE:GPK) is trending on the radar of investors.
4. Jack in the Box Inc. (NASDAQ:JACK)
Greenlight Capital’s Stake Value: $18.46 million
Greenlight Capital’s 13F Portfolio: 1.05%
Number of Hedge Fund Holders: 27
Dividend Yield (as of April 28): 2.08%
Jack in the Box Inc. (NASDAQ:JACK) is a California-based restaurant chain with approximately 2,200 locations across the United States. As of April 28, the firm’s dividend yield stood at 2.08%. Comprising of 211,000 shares, Greenlight Capital’s stake in Jack in the Box Inc. (NASDAQ:JACK) at the end of the fourth quarter was worth $18.46 million, and showed an increase of 42% over the preceding quarter.
On April 12, Citi analyst Jon Tower initiated coverage of Jack in the Box Inc. (NASDAQ:JACK) with a ‘Neutral’ rating and a $104 price target. He expects the shares to remain range-bound as investors digest the announced acquisition of Del Taco. In the fourth quarter, Jack in the Box Inc. (NASDAQ:JACK) posted an EPS of $1.97, which beat estimates by $0.06. Quarterly revenue of $344.71 million was slightly below estimates by $1.17 million.
27 hedge funds were bullish on Jack in the Box Inc. (NASDAQ:JACK) shares in the fourth quarter of 2021, holding stakes with a combined worth of $156.3 million. This is an upward trend from the preceding quarter where 26 hedge funds held $179.7 million worth of positions in the company. Millennium Management was the largest shareholder of Jack in the Box Inc. (NASDAQ:JACK) in the fourth quarter with 337,000 shares worth $29.45 million.
3. The Chemours Company (NYSE:CC)
Greenlight Capital’s Stake Value: $58.45 million
Greenlight Capital’s 13F Portfolio: 3.34%
Number of Hedge Fund Holders: 35
Dividend Yield (as of April 28): 3.01%
The Chemours Company (NYSE:CC) is a Delaware-based firm which provides performance chemicals to a range of industries such as plastics, coatings, transportation, semiconductor and consumer electronics, among others. Einhorn’s Greenlight Capital owned 1.74 million shares of the firm in the fourth quarter, worth $58.45 million amounting to 3.34% of the fund’s total portfolio.
RBC Capital analyst Arun Viswanathan in February maintained an ‘Outperform’ rating on The Chemours Company (NYSE:CC) shares and lowered the price target to $41 from $44. He sees headwinds such as cost inflation moderating in the second half of 2022 and continuing to improve in 2023.
The Chemours Company (NYSE:CC) posted a revenue of $1.58 billion for the fourth quarter, outperforming estimates by $7.28 million and showing an increase of 17.8% year-on-year. EPS was recorded at $0.81, which fell below analysts’ estimates by $0.07.
35 hedge funds held stakes in The Chemours Company (NYSE:CC) during the fourth quarter of 2021, with overall stakes worth $566.7 million. This is down from 38 hedge funds in the preceding quarter with $548.9 million worth of stakes in the company.
Investment firm Miller Value Partners talked about The Chemours Company (NYSE:CC) in its Q4 2021 investor letter. Here’s what the fund said:
“The Chemours Co (CC) rose 16.4% over the period after reporting Q3 revenue of $1.68Bn, +36% Y/Y and +4% ahead of consensus driven by 25% volume growth while pricing added +11%. Earnings Before Income, Taxes, Depreciation, and Amortization (EBITDA) of $372M rose +77% and beat estimates by 9% as higher top-line results more than offset incremental cost headwinds. Chemours raised FY21 guidance, including EBITDA of $1.3Bn-$1.34Bn (from $1.1Bn-$1.25Bn), Earnings Per Share (EPS) of $3.93-$4.13 (from $2.84-$3.56), and free cash flow (FCF) of at least $500M (from >$450M). Additionally, Chemours announced the closing of the previously announced sale of the Mining Solutions business for $520M.”
2. Global Payments Inc. (NYSE:GPN)
Greenlight Capital’s Stake Value: $68.4 million
Greenlight Capital’s 13F Portfolio: 3.91%
Number of Hedge Fund Holders: 67
Dividend Yield (as of April 28): 0.69%
Global Payments Inc. (NYSE:GPN) deals in the provision of digital payment technology and solutions around the world. On April 5, analyst Charles Nabhan at research firm Stephens initiated coverage of Global Payments Inc. (NYSE:GPN) with an ‘Overweight’ rating and a $170 price target. He views the stock as a pure-play payment provider boasting a premium growth profile, and expects it to continue outperforming its competitors.
According to regulatory data for the fourth quarter, Greenlight Capital owned 506,000 shares of Global Payments Inc. (NYSE:GPN) at a price tag of $68.4 million. This was a new addition to the fund’s portfolio, and represented 3.91% of overall holdings. In total, 67 hedge funds were bullish on the company shares in the fourth quarter, down from 68 a quarter ago.
In Q4 2021, Global Payments Inc. (NYSE:GPN) reported earnings per share of $2.13, which outperformed estimates by $0.01. The company raked in $1.98 billion in revenue for the quarter ending December, surpassing analysts’ forecasts by $10.50 million and growing 13.27% year-on-year.
Here is what Artisan Partners, an investment firm, had to say about Global Payments Inc. (NYSE:GPN) in its Q4 2021 investor letter:
“Global Payments was another notable drag on Q4 performance. We wouldn’t say the company’s profit cycle has faltered of late—they appear likely to deliver 14%-15% top-line and 27%-28% profit growth this year (vs. -5% and 4% in 2020). Investors may have expected even more growth in early 2021, but stubborn pandemic pressures remain in certain geographies and categories of consumer spending. However, we think most of the stock’s decline has been due to fears about emerging competitive pressures from new payments technology upstarts (discussed in prior letters). Given our belief the company can continue to sustain solid growth in the coming years despite competitive entrants—management is projecting 17%-20% EPS growth in 2022—we view the stock’s deeply discounted multiple as attractive, and we have maintained our position.”
1. Teck Resources Ltd (NYSE:TECK)
Greenlight Capital’s Stake Value: $97.87 million
Greenlight Capital’s 13F Portfolio: 5.59%
Number of Hedge Fund Holders: 25
Dividend Yield (as of April 28): 1.00%
Teck Resources Ltd (NYSE:TECK) is the largest dividend-paying stock holding of David Einhorn’s Greenlight Capital as of the fourth quarter. Einhorn owned 3.39 million shares of the firm at a value of $97.9 million which amounted to 5.59% of the fund’s overall portfolio. Teck Resources Ltd (NYSE:TECK) is a Canadian natural resource company which mines and explores for coal, copper, zinc and other minerals around the world.
On April 20, Raymond James analyst Brian MacArthur raised the firm’s price target on Teck Resources to C$64 from C$58 and maintained an Outperform rating on the company shares. As of April 22, shares of Teck Resources Ltd (NYSE:TECK) have gained 77.34% in the last 12 months, and 33.60% year-to-date.
25 hedge funds reported bullish bets on Teck Resources Ltd (NYSE:TECK) shares in Q4 2021 with aggregate holdings worth $1.62 billion. In contrast, 41 hedge funds were long on the company shares a quarter ago.
EPS for the fourth quarter was recorded at $1.98, which beat estimates by $0.11. Quarterly revenue came in at $3.44 billion for Teck Resources Ltd (NYSE:TECK), which showed an impressive jump of more than 70% year-on-year.
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