Blackstone Group LP (BX), Microsoft Corporation (MSFT), & More: Billionaire Julian Robertson’s Top Dividend Stocks

Investing in dividend stocks is something that everybody who wants to build a strong and reliable portfolio should consider. Dividend-paying stocks usually represent companies that are in a good financial position and whose management is committed to return capital to shareholders. Over the long-run, dividend-paying stocks usually outperform average stocks and companies often tend to increase their dividends over time, which results in good long-term returns. Moreover, dividend-paying stocks represent a good addition to a retirement portfolio as they can provide consistent regular pay-outs, which comes in handy when there are no other sources of income to rely on.

However, not all dividend-paying companies are good investments and it is usually suggested to pick high-quality businesses that have a solid record of paying dividends and buying back shares, in addition to using other metrics to analyze the company. In addition to looking into each company, a good way to identify dividend stocks to invest in is by following hedge funds into them. Hedge funds have a lot of experience in identifying the best stocks to invest in and they can employ skills and resources that are not always available to smaller investors. With this in mind, let’s take a closer look at some of the top dividend stocks of billionaire Julian Robertson‘s Tiger Management.

Billionaire Julian Robertson is a hedge fund legend with several decades of investing experience and his views and opinions are highly valued on the Street. In September, Mr. Robertson attended the Delivering Alpha conference, where he said that the stock market valuation is very high and expressed concerns that a bubble might be forming. He added that the high valuation is due to very low interest rates, which led to investors not having alternatives to get returns. In this way, once the rates start to go up, bonds will become more attractive to investors and the stock market will be affected.

However, Mr. Robertson is still fond of several stocks that he mentioned at the conference. He remains bullish on tech stocks like Facebook Inc (NASDAQ:FB), Apple Inc (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL) and Netflix, Inc. (NASDAQ:NFLX), which he considers are still cheap because of their potential. His position on tech stocks is also reaffirmed in Tiger Management’s latest 13F filing, where tech stocks amass over 35% of the equity portfolio as of the end of September.

Tiger Management’s latest 13F filing revealed an equity portfolio worth $552.72 million, which contains 44 long positions, mostly spread across technology, healthcare, and financial sectors. Julian Robertson is one of the best investors to imitate in order to generate market beating returns. According to our research, following Tiger Management into its long positions in companies with market caps above $1.0 billion, would’ve generated a return of over 30% over the 12-month period ended June 30, 2017, which is higher than the 19% gain posted by the SPDR S&P 500 ETF (NYSEARCA:SPY).

In addition, Tiger Management’s 13F portfolio revealed many positions in dividend-paying companies and we have selected five that have yields above 2%, which we will discuss on the following pages.

Blackstone Group LP (NYSE:BX) represents Tiger Management’s fourth-largest stake, as the fund inched up its position by 6% to 1.0 million shares worth $33.47 million during the third quarter. The stock of the alternative asset manager has gained nearly 18% since the beginning of the year. Julian Robertson has held shares of Blackstone Group LP (NYSE:BX) since the first quarter of 2015 and the stock is down by over 16% since then. In October, the company declared a quarterly dividend of $0.44 per share, which is down from $0.54 paid a quarter earlier, and its stock has a yield of 7.28%. For the third quarter, Blackstone Group LP (NYSE:BX) posted a economic net income of $0.69 per share, beating the estimates of $0.55, while its distributable earnings went up to $0.52 per share from $0.48 per share posted for the same period of 2016.

In Microsoft Corporation (NASDAQ:MSFT), Julian Robertson raised his stake by 20% to 440,040 shares valued at $32.78 million between July and September. The tech giant has been in Tiger Management’s equity portfolio since the second quarter of 2016 and its stock has surged by over 64% since then. Microsoft Corporation (NASDAQ:MSFT) has a solid track record of paying dividends for many years and it has been increasing dividends for over 14 years. Moreover, Microsoft Corporation (NASDAQ:MSFT) is well set on path to become a dividend aristocrat. The company’s focus on cloud with Office 365 and Azure effectively helped turn it into a cash-generating machine. In the fiscal first quarter, Microsoft Corporation (NASDAQ:MSFT) saw its Azure revenue surge by 89% on the year, while Office 365 revenue advanced by 42%. Overall, Microsoft’s third-quarter revenue appreciated by 12% on the year to $24.54 billion and topped the consensus estimate by $980 million, while EPS of $0.84 was higher than the expected $0.72.

On the next page, we will take a look at three other dividend stocks from billionaire Julian Robertson’s 13F portfolio.

JPMorgan Chase & Co. (NYSE:JPM) saw Tiger Management add 64,800 shares during the third quarter, having amassed 239,600 shares worth $22.88 million at the end of September. JPMorgan Chase & Co. (NYSE:JPM)’s stock has gained 13.93% since the beginning of the year and currently sports a dividend yield of 2.28%. The company has been consistently increasing its dividends since the financial crisis. Earlier this year, the Fed has greenlighted US banks to use extra capital for stock buybacks and dividends and if the deregulation promised by the new White House administration kicks in, big banks should see higher profits, while lower capital requirements will result in more capital finding its way to shareholders.

Tiger Management also disclosed a $22.04 million stake in Apollo Global Management LLC (NYSE:APO), which contained 732,081 shares at the end of the third quarter. Apollo Global Management LLC (NYSE:APO), another alternative-asset management company in Tiger’s equity portfolio, has seen its stock soar by 56% since the beginning of the year and it has a dividend yield of 6.10%, based on the $0.39 dividend that the company has declared earlier this month. Recently, Reuters reported that Apollo Global Management LLC (NYSE:APO) is about to acquire Qdoba Mexican Eats, a restaurant chain owned by Jack in the Box Inc. (NASDAQ:JACK). The deal between Apollo and Jack in the Box is valued at over $300 million. Apollo Global Management LLC (NYSE:APO) also owns pizza and arcade chain Chuck E. Cheese, but it does not plan to combine it with Qdoba, according to the source.

Then there’s Delta Air Lines, Inc. (NYSE:DAL), in which Julian Robertson’s fund held 103,375 shares worth $4.99 million heading into the fourth quarter. In addition to Delta Air Lines, Inc. (NYSE:DAL), Tiger Management also holds shares of two other carriers: Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS) and Ryanair Holdings plc (ADR) (NASDAQ:RYAAY), both of which operate low-cost airlines. Delta Air Lines, Inc. (NYSE:DAL) is the best dividend stock to hold among airline operators. It was the first among major carrier to reinstate its dividend in 2013 and has been consistently increasing it over the last couple of years. Earlier this year, Delta Air Lines, Inc. (NYSE:DAL) has raised its dividend by around 50% to $0.31 per share and its stock has a yield of 2.43%, which is the highest among large carriers.

Disclosure: none