The 13F reported that Druckenmiller initiated a position of 1.2 million shares in $40 billion market cap electric utility The Southern Company (NYSE:SO) between October and December. Point State Capital- which is managed by several of his former Duquesne Capital portfolio managers- was also buying the stock (research more stocks that Point State was buying). The utility (which operates in the southern U.S.) pays a dividend yield of 4.3%. With utilities generally even being more protected from macro conditions than drug manufacturers, it’s unsurprising that Southern’s beta is only 0.1.
Duke Energy Corp (NYSE:DUK) was another electric utility where the filing reported a new position (of about 400,000 shares) for Q4. Duke essentially matches Southern in terms of both its yield and its beta, making either an attractive option for income or dividend investors. Duke is a bit pricier in terms of trailing earnings but Wall Street analysts expect improvement over the next couple years such that the forward P/Es are more or less even as well. Billionaire Israel Englander’s Millennium Management also liked Duke last quarter, increasing its stake to about 750,000 shares (see more stocks Englander liked).
Druckenmiller also included somewhat smaller electric and natural gas utility PG&E Corporation (NYSE:PCG) in his portfolio as of the beginning of January. The $19 billion market cap company- less than half of Southern’s valuation, but still a large cap stock- operates in California. The beta is a little higher here, at 0.3, but that is still quite low and the dividend yield of 4.2% is very much in line with the other utilities we discussed. D.E. Shaw, a large hedge fund managed by billionaire David Shaw, disclosed ownership of 1.7 million shares in its own 13F filing.
Disclosure: I own no shares of any stocks mentioned in this article.