In this article, we discuss 10 dividend stocks with over 15% yield from Jim Simons’ Renaissance Technologies’ portfolio.
The American billionaire hedge fund manager and renowned quant genius, Jim Simons founded Renaissance Technologies in 1982, which is a New York-based hedge fund following a quantitative investment strategy. Simons, with his PhD focused on Mathematics, has a unique approach to investing, using patterns and algorithms to identify market inefficiencies, leveraging automated programs to predict price fluctuations and trends in investment vehicles.
Simons remained the CEO of Renaissance Technologies from 1982 till 2010, and currently, he serves as the non-executive chairman of the hedge fund. According to the 13F filings from September 2021, the portfolio of Renaissance Technologies is worth more than $77 billion, down from approximately $80 billion in the preceding quarter.
With a top ten holdings concentration of 12.38%, Simons’ fund is concentrated in the information technology, industrials, healthcare, consumer staples, communications, and consumer discretionary sectors. The largest holding in the Renaissance Technologies’ portfolio as of the third quarter is Novo Nordisk A/S (NYSE:NVO), with the hedge fund holding 21.64 million shares of the company, valued at more than $2 billion.
The most notable stocks in the Q3 portfolio of Jim Simons’ Renaissance Technologies include Microsoft Corporation (NASDAQ:MSFT), Zoom Video Communications, Inc. (NASDAQ:ZM), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG).
Jim Simons of Renaissance Technologies
Our Methodology
We used the Q3 portfolio of Renaissance Technologies to screen for dividend stocks, selecting the stocks with a yield of more than 15%.
Ranking the stocks according to the yield, we have mentioned important metrics like the third quarter earnings, hedge fund sentiment around each stock, and analyst ratings to give additional context on each company. The hedge fund sentiment was gauged from the 867 elite funds that were tracked by Insider Monkey in Q3 2021.
Jim Simons’ Renaissance Technologies’ Portfolio: Dividend Stocks With Over 15% Yield
10. China Yuchai International Limited (NYSE:CYD)
Renaissance Technologies’ Stake Value: $6,855,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.00%
Number of Hedge Fund Holders: 8
Dividend Yield as of December 21: 15.28%
Headquartered in Singapore, China Yuchai International Limited (NYSE:CYD) is a holding company that operates via its subsidiaries, engaged in engine manufacturing and the hospitality industry.
Jim Simons’ Renaissance Technologies holds 504,393 shares of China Yuchai International Limited as of September 2021, worth $6.85 million. Overall, 8 hedge funds tracked by the database of Insider Monkey were bullish on China Yuchai International Limited in the third quarter, with total stakes amounting to $58.1 million.
China Yuchai International Limited’s subsidiary, GYMCL, entered into an agreement with the Government of Nanning Municipality for the research and development of a new production facility for up and coming energy technologies, including fuel cell systems, range extenders, hybrid power, and electric drive systems. GYMCL has established a wholly-owned subsidiary, Yuchai Xin-Lan New Energy Power Technology, as the primary investment vehicle for the construction of the Yuchai Xin-Lan New Energy Power Project.
Shah Capital Management is the largest company stakeholder as of Q3, with 3.51 million shares worth $47.7 million. With a dividend yield of 15.28%, China Yuchai International Limited is one of the best dividend stocks to buy according to Jim Simons’ Renaissance Technologies.
9. KNOT Offshore Partners LP (NYSE:KNOP)
Renaissance Technologies’ Stake Value: $23,204,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.02%
Number of Hedge Fund Holders: 3
Dividend Yield as of December 21: 16.12%
KNOT Offshore Partners LP (NYSE:KNOP) owns and operates a fleet of shuttle tankers that it charters to companies like Royal Dutch Shell plc (NYSE:RDS-A), Equinor ASA (NYSE:EQNR), and Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR), among others. Jim Simons’ fund holds a $23.2 million stake in KNOT Offshore Partners LP as of Q3 2021, which represents 0.02% of the total investments of Renaissance Technologies.
In the third quarter of 2021, 3 hedge funds were bullish on KNOT Offshore Partners LP, namely Renaissance Technologies, Citadel Investment Group, and McKinley Capital Management, with total stakes worth $25.1 million.
On November 17, KNOT Offshore Partners LP posted its Q3 results. The company announced an EPS of $0.41, missing estimates by $0.23.
With a yield of 16.12%, KNOT Offshore Partners LP’s latest quarterly dividend was paid on November 10, amounting to $0.52 per share, to shareholders of record on October 28.
In addition to Microsoft Corporation, Zoom Video Communications, Inc., Amazon.com, Inc., Apple Inc., and Alphabet Inc., KNOT Offshore Partners LP is a notable stock from the Q3 portfolio of Renaissance Technologies.
8. Orchid Island Capital, Inc. (NYSE:ORC)
Renaissance Technologies’ Stake Value: $79,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.00%
Number of Hedge Fund Holders: 10
Dividend Yield as of December 21: 17.49%
Orchid Island Capital, Inc. (NYSE:ORC), a specialty finance company investing in residential mortgage-backed securities, is one of the highest paying dividend stocks from Jim Simons’ fund in the third quarter, with a yield of 17.49%. Renaissance Technologies added Orchid Island Capital, Inc. to its portfolio in Q3 2021, holding 16,200 shares of the company, worth $79,000.
In the Q3 earnings report published on October 28, Orchid Island Capital, Inc. posted earnings per share of $0.22, missing estimates by $0.03.
On December 9, Orchid Island Capital, Inc. announced a monthly dividend of $0.065 per share, payable on January 27, 2022 to shareholders of record on December 31.
In Q3 2021, 10 hedge funds were bullish on Orchid Island Capital, Inc., with total stakes amounting to $16.1 million. Balyasny Asset Management is the largest stakeholder of the company, increasing its stake in Orchid Island Capital, Inc. by 1131% in the third quarter, holding 1.71 million shares worth $8.40 million.
7. Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR)
Renaissance Technologies’ Stake Value: $74,552,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.09%
Number of Hedge Fund Holders: 23
Dividend Yield as of December 21: 19.29%
Petróleo Brasileiro S.A. – Petrobras, a state-owned oil and gas corporation from Brazil, is one of the best dividend stocks in Jim Simons’ fund, with Renaissance Technologies increasing its stake in Petróleo Brasileiro S.A. – Petrobras by 23% in the third quarter, holding a $74.5 million position in the company. The stock accounts for 0.09% of the total Q3 investments at Renaissance Technologies.
Publishing its Q3 earnings on October 28, Petróleo Brasileiro S.A. – Petrobras posted earnings per share of $0.47, beating estimates by $0.14. Revenue for the period totaled $21.61 billion, missing analysts’ consensus estimates by $296.05 million.
Goldman Sachs analyst Bruno Amorim upgraded Petróleo Brasileiro S.A. – Petrobras to Buy from Neutral with a $14.20 price target on December 15. The analyst said that there is a better risk/reward for Petróleo Brasileiro S.A. – Petrobras despite the existing risks of a change in the fuel pricing policy, the capital allocation strategy going into 2022, and next year’s presidential election in Brazil. Amorim noted, however, that cash returns in 2022 provide a cushion, as he assumed Petróleo Brasileiro S.A. – Petrobras will pay not only the 60% stated in their dividend policy but also distribute as dividends any excess cash generated in 2022.
Of the 23 hedge funds that were long Petróleo Brasileiro S.A. – Petrobras in the third quarter, Rajiv Jain’s GQG Partners is the largest company stakeholder, increasing its stake in Petróleo Brasileiro S.A. – Petrobras by 25% in Q3, holding a $1.79 billion position.
6. Vale S.A. (NYSE:VALE)
Renaissance Technologies’ Stake Value: $61,172,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 27
Dividend Yield as of December 21: 19.39%
Another high dividend stock with a yield of 19.39% from Jim Simons’ Renaissance Technologies’ portfolio is Vale S.A. (NYSE:VALE). Vale S.A., a Brazilian multinational metals and mining corporation, is a new arrival in the third quarter portfolio of Renaissance Technologies, with the hedge fund holding 4.38 million shares of the company, worth $61.17 million. The stock accounts for 0.07% of the fund’s total Q3 investments.
Goldman Sachs analyst Marcio Farid on December 10 initiated coverage of Vale S.A. with a Neutral rating and a $15 price target. According to the analyst, despite its “apparent discounted valuation”, Vale S.A. lacks catalysts for a re-rating due to deteriorating iron ore fundamentals and uncertainties regarding production growth and cost improvement.
The third quarter results were published by Vale S.A. on October 28. The company posted an EPS of $1.26, exceeding estimates by $0.06. The revenue jumped 17.84% on a year-over-year basis to $12.68 billion, but missed estimates by $1.31 billion.
In Q3 2021, 27 funds tracked by Insider Monkey reported owning stakes worth $1.97 billion in Vale S.A.. The largest Vale S.A. stakeholder as of September 2021 is Fisher Asset Management, with 34.8 million shares worth $486.3 million.
Vale S.A. is a notable stock pick of Jim Simons’ hedge fund in the third quarter, just like Microsoft Corporation, Zoom Video Communications, Inc., Amazon.com, Inc., Apple Inc., and Alphabet Inc..
Here is what Miller Value Partners has to say about Vale S.A. in its Q3 2021 investor letter:
“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”
5. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Renaissance Technologies’ Stake Value: $118,838,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.15%
Number of Hedge Fund Holders: 22
Dividend Yield as of December 21: 19.43%
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is a cargo shipping company that is considered to be one of the top global carriers from Israel. Renaissance Technologies, as of Q3 2021, increased its position in ZIM Integrated Shipping Services Ltd. by 399%, holding 2.34 million shares, worth $118.8 million, representing 0.15% of the total securities at the hedge fund.
ZIM Integrated Shipping Services Ltd. posted strong Q3 results on November 17. The company announced earnings per share of $12.16, beating estimates by $2.83. Revenue for the quarter totaled $3.14 billion, outperforming estimates by $374.27 million. After the Q3 performance, ZIM Integrated Shipping Services Ltd. stock jumped 10% to $54.93.
One of the leading ZIM Integrated Shipping Services Ltd. stakeholders from the third quarter is Abrams Bison Investments.
On November 17, ZIM Integrated Shipping Services Ltd. announced a $2.50 per share interim dividend, payable on December 27. The dividend payout equals roughly 20% of the net quarterly income, and going into 2022, ZIM Integrated Shipping Services Ltd. is expected to distribute 30-50% of the total 2021 net income as dividends.
Here is what Evermore Global Advisors has to say about ZIM Integrated Shipping Services Ltd. in its Q2 2021 investor letter:
“ZIM Integrated Shipping Services (ZIM) was the largest contributor to the Fund’s performance during the second quarter. With a market cap of $5.2 billion, ZIM is an Israel-based containership operator that had its initial public offering on the New York Stock Exchange this past January. As a reminder, we discussed ZIM at length in the Q1 2021 quarterly commentary as one of the new investments that we initiated during that period.
There were several notable developments during the second quarter. Given the company’s unique asset light business model and targeted, global niche approach, ZIM continued to generate exceptionally strong cash flows. ZIM ended the period with approximately $1.25 billion in cash and about $915 million in net debt. Due to the strong operational performance, the company further strengthened its balance sheet by redeeming its Series 1 and Series 2 unsecured notes due in 2023. With the early redemption of the unsecured notes, ZIM was no longer subject to certain dividend restrictions, and it declared a special dividend of $2 per share, which will be payable on Sept 15th (goes ex on August 24th). Lastly, management revised its 2021 full year EBITDA guidance from $1.4 – 1.6 billion to $2.5 – $2.7 billion, which was a sizable increase compared to the levels set last March. To that end, we continue to have high conviction in our position in ZIM.”
4. Enel Chile S.A. (NASDAQ:ENIC)
Renaissance Technologies’ Stake Value: $5,830,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.00%
Number of Hedge Fund Holders: 7
Dividend Yield as of December 21: 22.41%
Enel Chile S.A. (NASDAQ:ENIC), the largest electric utility company in Chile, posted on October 29 its Q3 results. The company reported a loss per share of $0.01, missing estimates by $0.05. The $955.70 million revenue exceeded estimates by $77.12 million.
In the third quarter of 2021, 7 hedge funds reported owning stakes worth $14.5 million in Enel Chile S.A.. One of the leading company stakeholders is Cliff Asness’ AQR Capital Management, with 2.1 million shares worth more than $5 million.
Renaissance Technologies holds 2.41 million Enel Chile S.A. shares as of September 2021, worth $5.83 million, making the hedge fund the largest stakeholder of Enel Chile S.A..
On October 15, Morgan Stanley analyst Miguel Rodrigues initiated coverage of Enel Chile S.A. with an Overweight rating and a CLP 52 price target. According to the analyst, Enel Chile S.A. is a good “vehicle to play the ESG theme” in Latin America due to its rapid decarbonization process and “increasingly high ESG scores by different rating agencies”.
With a yield of 22.41%, Enel Chile S.A. is one of the best dividend stocks to buy according to Jim Simons’ fund as of the third quarter.
3. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Renaissance Technologies’ Stake Value: $1,932,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.00%
Number of Hedge Fund Holders: 21
Dividend Yield as of December 21: 24.51%
Star Bulk Carriers Corp. (NASDAQ:SBLK) offers a high yield of 24.51%, making it a top dividend stock in Jim Simons’ Renaissance Technologies’ portfolio. Star Bulk Carriers Corp. is a Greece-based shipping company that transports iron ore, coal, grain, bauxite, fertilizers, and steel products via a fleet of dry bulk carrier vessels.
In the third quarter of 2021, Renaissance Technologies held 80,366 shares of Star Bulk Carriers Corp., worth $1.93 million. The largest Star Bulk Carriers Corp. stakeholder is Howard Marks’ Oaktree Capital Management, with almost 26 million shares worth $624.8 million.
Publishing its third quarter results on November 16, Star Bulk Carriers Corp. posted an EPS of $2.19, beating estimates by $0.05. Revenue over the period jumped 126.61% year-over-year to $354.84 million, outperforming estimates by $14.59 million.
Here is what Massif Capital has to say about Star Bulk Carriers Corp. in its Q3 2021 investor letter:
“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 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…” (Click here to see the full text)
2. Companhia Paranaense de Energia – COPEL (NYSE:ELP)
Renaissance Technologies’ Stake Value: $649,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.00%
Number of Hedge Fund Holders: 7
Dividend Yield as of December 21: 25.53%
Companhia Paranaense de Energia – COPEL (NYSE:ELP), a Brazilian electric utility company, posted its Q3 results on November 11. The company reported earnings per share of $0.04, missing estimates by $0.86. Revenue for the period totaled $1.29 billion, exceeding estimates by $487 million.
Jim Simons’ fund holds 99,376 shares of Companhia Paranaense de Energia – COPEL, worth $649,000 as of September. Overall, 7 hedge funds in the Q3 database of Insider Monkey were long Companhia Paranaense de Energia – COPEL, down from 13 funds in the preceding quarter.
Billionaire Israel Englander’s Millennium Management is the largest Companhia Paranaense de Energia – COPEL stakeholder from the third quarter, holding a $20.3 million position in the company.
1. Golden Ocean Group Limited (NASDAQ:GOGL)
Renaissance Technologies’ Stake Value: $15,374,000
Percentage of Renaissance Technologies’ 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 13
Dividend Yield as of December 21: 40.72%
Golden Ocean Group Limited (NASDAQ:GOGL) is the highest yielding dividend stock from Jim Simons’ Renaissance Technologies’ portfolio, offering a yield of 40.72%. As of Q3 2021, Renaissance Technologies owns 1.42 million Golden Ocean Group Limited shares, worth $15.37 million, representing 0.01% of the fund’s total investments.
On December 7, Golden Ocean Group Limited declared a quarterly dividend of $0.85 per share, which reflects a 70% increase from the prior dividend of $0.50. The dividend was paid on December 16.
In the third quarter earnings report published on November 24, Golden Ocean Group Limited posted earnings per share of $0.92, beating estimates by $0.27.
Of the 13 hedge funds that were bullish on Golden Ocean Group Limited as of September 2021, Arrowstreet Capital is the leading stakeholder of the company, with 4.30 million shares worth $45.8 million.
You can also take a look at 10 Best High Dividend Stocks in Canada for 2022 and 10 Financial Stocks to Buy According to Ken Griffin’s Citadel Investment Group.
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This article is originally published at Insider Monkey.
