In this article, we discuss the top dividend stock picks of billionaire George Soros’ hedge fund.
George Soros is a Hungarian-born American investor who is best known for earning $1.1 billion in profits by betting on the fall of the pound in 1992. He is known as ‘the man who broke The Bank of England’ because of this feat. Soros founded Soros Fund Management in 1970. As of January 2022, Soros’ real-time net worth stood at $8.6 billion.
Investment Philosophy of George Soros
Soros believes in a global macro strategy, making bets on the currency rates and other economic changes. He does this by meticulously studying the financial markets, as well as gauging the behaviors of market participants. According to Soros, the irregular behaviors of market participants lead to fluctuations in the financial markets. Through this philosophy, his hedge fund managed to generate profitable returns. In 2020, Soros Fund Management gained 23.2%, compared with an average hedge fund return of 11.6% during the same year.
At the end of Q3 2021, George Soros’ Soros Fund Management had a portfolio value of over $5.4 billion. Some of the sectors which the hedge fund invests in include services, technology, finance, and industrial goods. Bloomberg’s November report revealed that the fund also increased its stakes in real estate and financial stocks. Some of the hedge fund’s major holdings in Q3 included Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), The Walt Disney Company (NYSE:DIS), and General Motors Company (NYSE:GM).
George Soros of Soros Fund Management
Our Methodology:
In this article, we will focus on the dividend stocks in George Soros’ portfolio. We considered Soros Fund Management’s 13F portfolio as of Q3.
Top Dividend Stock Picks of Billionaire George Soros’ Fund
10. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 74
Dividend Yield as of January 21: 1.72%
Soros Fund Management’s Stake Value: $42,021,000
In Q3 2021, Analog Devices, Inc. (NASDAQ:ADI), an American semiconductor company, experienced a positive hedge fund sentiment as 74 hedge funds tracked by Insider Monkey held stakes in the company, up from 62 in the previous quarter. The total value of these stakes is over $5.69 billion. Among these hedge funds, Generation Investment Management was the company’s largest shareholder in Q3, holding shares worth $641.8 million.
Soros Fund Management started investing in Analog Devices, Inc. during the fourth quarter of 2020, after pulling its stake from the company in 2017. In Q3 2021, the hedge fund increased its position in Analog Devices, Inc. by 42%, which represented 0.77% of George Soros’ portfolio. In January, Barclays set a $180 price target on Analog Devices, Inc., while maintaining an Overweight rating on the shares.
Analog Devices, Inc. in 2021 increased its dividend by 11%, and its 5-year dividend growth rate stands at 10.44%. Analog Devices, Inc. has maintained an 18-year track record of consistent dividend growth.
Like Amazon.com, Inc., Alphabet Inc., The Walt Disney Company, and General Motors Company, Analog Devices, Inc. is one of the most notable stocks in George Soros’ fund’s portfolio.
Madison Funds mentioned Analog Devices, Inc. in its Q3 2021 investor letter. Here is what the firm has to say:
“At its 2017 investor day, Analog Device’s VP of Automotive, Mark Gill, described how the company’s content on well-equipped electric vehicles was $600 per car compared to $250 per car for the traditional 2017 internal combustion engine car. Since then, Analog has highlighted the success of its EV battery management systems (BMS) product nearly every quarter. The BMS product is hardware and software that manages the power into and out of the battery systems. It’s the brains of the operation. Analog says it’s on its fifth generation BMS product, that it has the no. 1 market share in high voltage products, and that it is on 5 of the top 10 selling EVs. While we think that the BMS product is just 1 to 1.5% of Analog Devices, Inc.’s product mix, we think that it could add nearly a point of revenue growth per year to the company’s top-line given the expected ramp in EV production. This is a material amount of growth atop an already nicely growing company revenue line.”
9. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 57
Dividend Yield as of January 21: 2.55%
Soros Fund Management’s Stake Value: $30,906,000
In the third quarter of 2021, Soros Fund Management increased its position by 3% in Ally Financial Inc. (NYSE:ALLY), an American bank holding company. The hedge fund held a stake worth roughly $31 million in the company, which represented 0.57% of its 13F portfolio.
On January 11, 2022, Ally Financial Inc. announced a quarterly dividend of $0.30 per share, an increase of 20% from the previous dividend. Though a yield of 2.55% is considered relatively low in the finance sector, the company’s 5-year dividend growth rate of 61.54% and strong financials have the investors confident about its further growth. As the bank continued to benefit from its execution and steady customer growth, in December, Raymond James started its coverage on Ally Financial Inc. with a $55 price target and an Outperform rating on the shares.
Insider Monkey’s data for Q3 shows that the hedge fund interest has increased in Ally Financial Inc., as 57 hedge funds held stakes in the company in Q3, up from 54 in the previous quarter. The total value of these stakes is over $2.5 billion. Among these hedge funds, Harris Associates held the largest stake in the company, worth $1.24 billion.
8. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 101
Dividend Yield as of January 21: 2.73%
Soros Fund Management’s Stake Value: $18,379,000
On December 14, 2021, JPMorgan Chase & Co. announced a quarterly dividend of $1.00 per share, with a dividend yield of 2.73%. The company has a 9-year track record of consistent dividend growth and currently pays over $400 million every quarter in preferred dividends. JPMorgan Chase & Co. delivered an 8.89% return to shareholders in the past 12 months, as of the close of January 21. In January, UBS set a $197 price target on JPMorgan Chase & Co., with a Buy rating on the shares.
At the end of Q3 2021, the number of hedge funds having stakes in JPMorgan Chase & Co. declined to 101, from 108 in the preceding quarter. These stakes hold a consolidated value of $5.63 billion, up from roughly $5 billion in Q2.
Vltava Fund mentioned JPMorgan Chase & Co. in its Q3 2021 investor letter. Here is what the firm has to say:
“While all the previous names could be categorised as founder, continuing, or key shareholders, these last two names fall into the category of hired professional managers. This is actually the most numerous category among the bosses of large companies, but even among them there exist a number of individuals with exceptional long-term track records. In our view, these include also Jamie Dimon and Herman Gref.
We consider JP Morgan to be the strongest, largest, and most profitable bank in the world. It has not always been so, and the fact that it is what it is today can be attributed especially to its CEO Jamie Dimon. Dimon has spent his entire career in banking. He came to JP Morgan in a roundabout way in 2004 after the bank bought Bank One, of which he was CEO at the time. Since early 2006, Dimon has been CEO of the entire JP Morgan.
The quality and strength of JP Morgan under his leadership became fully apparent for the first time in 2008. Not only did JPMorgan Chase & Co. help to stabilise the market by taking over the failing Bear Stearns in the spring of that year, but it was the only major US bank that did not require government assistance throughout the Great Financial Crisis and that was highly profitable even in the difficult year of 2008. Today, JP Morgan is even bigger, even more profitable, and even stronger than ever before. Many investors view banks with disdain, but a good bank with good management can be a very good long-term investment. From the time of its merger with Bank One in 2004 through the end of 2020, JPMorgan Chase & Co.’s stock has outperformed even the S&P 500 index. The bank has earned a total net profit of USD 330 billion during this period, of which USD 232 billion has been paid out to shareholders in dividends and in share buybacks. I can recommend two books about Jamie Dimon: The House of Dimon and Last Man Standing.”
7. NiSource Inc. (NYSE:NI)
Number of Hedge Fund Holders: 24
Dividend Yield as of January 21: 3.18%
Soros Fund Management’s Stake Value: $3,635,000
NiSource Inc. (NYSE:NI) is an American utility company with nearly four million natural gas and electricity customers across six states in the U.S.
Soros Fund Management started its investment in NiSource Inc. during the first quarter of 2020, after completely selling its previous stakes from the company in 2011. In Q3 2021, the hedge fund held shares worth over $3.6 million in the company, which accounted for 0.06% of its 13F portfolio. Currently, NiSource Inc. pays a quarterly dividend of $0.22 per share.
At the end of Q3 2021, 24 hedge funds tracked by Insider Monkey reported owning stakes in NiSource Inc., down from 36 in the previous quarter. These stakes hold a consolidated value of over $435.5 million. Among these hedge funds, Citadel Investment Group was the company’s largest shareholder, owning a $128.8 million worth of stake.
6. Sempra (NYSE:SRE)
Number of Hedge Fund Holders: 23
Dividend Yield as of January 21: 3.24%
Soros Fund Management’s Stake Value: $3,163,000
Sempra (NYSE:SRE) is an energy infrastructure company operating in the U.S. and Mexico. Currently, the company pays a quarterly dividend of $1.10 per share, with a dividend yield of 3.24%. Sempra has been increasing its dividend consecutively for the past 10 years at a CAGR of 10.2%, making it one of the best dividend stocks in George Soros’ portfolio. The company’s current payout ratio stands at a very safe 54% with its targeted range of 50-60% in the coming years.
With stakes worth $287.2 million, 23 hedge funds tracked by Insider Monkey held positions in Sempra in Q3. In comparison, 28 hedge funds held stakes in the company in the previous quarter.
In Q3 2021, Soros Fund Management held shares worth $3.1 million in Sempra, which represented 0.05% of its 13F portfolio. In December, UBS lifted its price target on Sempra to $177, with a Buy rating on the shares.
Like famous stocks such as Amazon.com, Inc., Alphabet Inc., The Walt Disney Company, and General Motors Company, Sempra is also gaining investors’ attention in 2022.
ClearBridge Investments mentioned Sempra in its Q3 2021 investor letter. Here is what the firm has to say:
“In utilities we completed the exit of WEC Energy Group to fund our newer position in Sempra Energy. Sempra embodies a similarly, wellpositioned utility but trades at a meaningfully lower valuation. We are bottom-up investors focused on assembling a diverse portfolio of high-quality companies that can compound dividends at attractive rates over the long term. The portfolio is designed to navigate any environment. The Strategy has generally participated nicely in up markets and protected capital in down markets such as we experienced in the third quarter. As the world navigates its emergence from COVID-19, we believe we are well-positioned.”
5. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 47
Dividend Yield as of January 21: 5.30%
Soros Fund Management’s Stake Value: $36,933,000
VICI Properties Inc. (NYSE:VICI), an American real estate investment trust, experienced a positive hedge fund sentiment in Q3. 47 hedge funds tracked by Insider Monkey held a $1.37 billion worth of stake in the company in Q3. In comparison, 37 hedge funds had positions in the company in the preceding quarter.
On December 9, VICI Properties Inc. announced a quarterly dividend of $0.36 per share. The company has increased its dividend every year since its inception in 2017, becoming one of the best dividend stocks in George Soros’ portfolio. Soros Fund Management started investing in VICI Properties Inc. during the first quarter of 2018. In Q3 2021, the hedge fund increased its stake in the company by 31%, which accounted for 0.68% of its portfolio.
Appreciating the company’s high-quality gaming portfolio, in January, Berenberg initiated its coverage on VICI Properties Inc. with a Buy rating and a $35 price target.
4. MGM Growth Properties LLC (NYSE:MGP)
Number of Hedge Fund Holders: 27
Dividend Yield as of January 21: 5.70%
Soros Fund Management’s Stake Value: $37,415,000
MGM Growth Properties LLC (NYSE:MGP) is an American real estate investment trust that invests largely in casino properties. On December 15, the company announced a quarterly dividend of $0.525 per share, a 1% increase from the previous dividend.
MGM Growth Properties LLC is one of the latest holdings of Soros Fund Management in Q3 2021. The hedge fund held a $37.4 million worth of stake in the company, which accounted for 0.69% of its portfolio. In the past 12 months, MGM Growth Properties LLC has delivered a 17.8% return to shareholders.
At the end of Q3 2021, 27 hedge funds tracked by Insider Monkey held stakes in MGM Growth Properties LLC, valued at $536.8 million. In the previous quarter, 29 hedge funds had positions in the company, with stakes worth $505.3 million.
3. Energy Transfer LP (NYSE:ET)
Number of Hedge Fund Holders: 29
Dividend Yield as of January 21: 6.65%
Soros Fund Management’s Stake Value: $4,577,000
Energy Transfer LP (NYSE:ET) is an American company that is engaged in natural gas and propane pipeline transport. According to Insider Monkey’s data, 29 hedge funds held stakes in the company in Q3, the same as in the previous quarter. These stakes hold a consolidated value of over $727.7 million.
Energy Transfer LP’s quarterly dividend stands at $0.1635 per share. The company currently spends over $1.9 billion in annual dividends. In Q3 2021, Soros Fund Management held a stake worth over $4.5 million in Energy Transfer LP.
In January, Barclays’ analyst Theresa Chen presented a positive outlook on the energy sector in 2022. The analyst set a $13 price target on Energy Transfer LP, while maintaining an Overweight rating on the shares.
Miller Value Partners mentioned Energy Transfer LP in its Q2 2021 investor letter. Here is what the firm has to say:
“Energy Transfer LP (ET)rose over the period along with the price of oil climbing 40.59% over the period. The company received positive news that the Dakota Access Pipeline project would not be shut down while the Environmental Impact Statement by the US Army Core of Engineers is drawn up. Energy Transfer reported strong 1Q results with revenue of $17B surpassing expectations for $11.8B with adjusted earnings before income, taxes, depreciation and amortization (EBITDA) hitting $5.04B ahead of consensus of $2.77B. The company raised full year adjusted EBITDA guidance to $12.9-13.3B from $10.6-11.0B previously, with the increase largely related to the benefits realized from Winter Storm Uri. The company paid down $3.7B in debt during the quarter, using strong cash f low to reduce leverage. The company also announced the issuance of $900M in 6.5% Series H perpetual preferreds with the company using the proceeds to repay debt and for general purposes.”
2. Enterprise Products Partners L.P. (NYSE:EPD)
Number of Hedge Fund Holders: 25
Dividend Yield as of January 21: 7.74%
Soros Fund Management’s Stake Value: $4,112,000
Enterprise Products Partners L.P. (NYSE:EPD) is an American midstream natural gas and crude oil pipeline company that provides energy services to consumers. Due to the company’s recent announcement of acquiring privately owned Navitas Midstream, in January, Mizuho raised its price target on Enterprise Products Partners L.P. to $30, with a Buy rating on the shares.
In Q3 2021, Soros Fund Management held shares worth over $4.1 million in Enterprise Products Partners L.P., which makes up 0.07% of its 13F portfolio. On January 6, the company announced a quarterly dividend of $0.465 per share, up 6% from the previous dividend. Enterprise Products Partners L.P. is one of the best dividend stocks in George Soros’ portfolio as it has a 22-year track record of consistent dividend growth.
First Eagle Investment Management held shares worth $61.1 million in Enterprise Products Partners L.P., becoming its largest shareholder in Q3. Overall, 25 hedge funds tracked by Insider Monkey held stakes in the company in Q3, compared with 28 in the previous quarter. These stakes hold a consolidated value of over $233.2 million.
ClearBridge Investments mentioned Enterprise Products Partners L.P. in its Q1 2021 investor letter. Here is what the firm has to say:
“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names (including) Enterprise Products Partners LP. We are positive on this company’s strong balance sheets, competitive positions and exposure to an economic recovery.”
1. Magellan Midstream Partners, L.P. (NYSE:MMP)
Number of Hedge Fund Holders: 12
Dividend Yield as of January 21: 8.64%
Soros Fund Management’s Stake Value: $3,724,000
Magellan Midstream Partners, L.P. (NYSE:MMP) is an American publicly traded partnership that deals in refined petroleum products and crude oil. In Q3 2021, Soros Fund Management did not change its position in the company and held shares worth over $3.7 million.
In Q3 2021, 12 hedge funds tracked by Insider Monkey held stakes in Magellan Midstream Partners, L.P., valued at over $92 million. In the previous quarter, 13 hedge funds held stakes in the company, worth over $89 million.
On October 20, Magellan Midstream Partners, L.P. announced a 1% increase in its quarterly dividend at $1.0375 per share. The company has maintained a 20-year streak of continuous dividend growth and has increased its dividend by 690% since its IPO in 2001. In January, Barclays set a $51 price target on Magellan Midstream Partners, L.P., with an Equal Weight rating on the shares.
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This article is originally published at Insider Monkey.
