In this article, we will discuss the 10 best dividend stocks according to Howard Marks’ Oaktree Capital Management. You can skip our detailed analysis of the hedge fund and its investment strategy, and go directly to read 5 Best Dividend Stocks According to Howard Marks’ Oaktree Capital Management.
Howard Marks co-founded Oaktree Capital Management in 1995. The hedge fund is mainly known for investing in distressed securities globally. Howard Marks’ investment career began in 1969 when he started working at Citicorp. He ultimately became the firm’s Director of Research in 1978. Currently, he is serving as the co-chairman and co-organizer at Oaktree Capital Management.
In 2019, Brookfield Asset Management Inc. (NYSE:BAM), a Toronto-based investment management company, acquired a 61% interest in Oaktree Capital. However, the hedge fund still operates as an independent business within the larger system of Brookfield Asset Management. As of December 2021, the fund manages $166 billion in assets, up from $114 billion in 2015. The hedge fund’s investment philosophy revolves around preventing losses and controlling risks associated with investing. Instead of predicting the markets, the fund focuses on meticulously studying the companies and their securities, while using portfolio structuring. This strategy makes Oaktree Capital invest in assets that are often overlooked by other investors and are available at attractive prices.
As of Q3 2021, Oaktree Capital holds a 13F portfolio value of over $7.1 billion. The hedge fund invests heavily in services, basic material, finance, technology, and the utility sector.
Howard Marks of Oaktree Capital Management
Our Methodology:
In this article, we will focus on the dividend stocks in Howard Marks’ portfolio. For this list, we took into account Oaktree Capital Management’s 13F portfolio as of Q3.
10 Best Dividend Stocks According to Howard Marks’ Oaktree Capital Management
10. Chesapeake Energy Corporation (NASDAQ:CHK)
Number of Hedge Fund Holders: 44
Dividend Yield as of February 8: 2.62%
Oaktree Capital Management’s Stake Value: $735,330,000
Chesapeake Energy Corporation (NASDAQ:CHK) is an American energy company that specializes in hydrocarbon exploration. In Q3 2021, the company was the largest holding of Oaktree Capital, accounting for 10.26% of its 13F portfolio. The fund held over $735.3 million worth of stake in the company.
On November 22, 2021, Chesapeake Energy Corporation (NASDAQ:CHK) announced a quarterly dividend of $0.4375 per share, up 27.3% from its previous dividend. The stock’s current dividend yield stands at 2.62%. Appreciating the company’s production growth in 2021, in January, MKM Partners raised its price target on Chesapeake Energy Corporation (NASDAQ:CHK) to $98, with a Buy rating on the shares. In the same month, BofA also initiated its coverage on the stock with a Buy rating.
The number of hedge funds tracked by Insider Monkey having stakes in Chesapeake Energy Corporation (NASDAQ:CHK) stood at 44 in Q3, up from 43 in the previous quarter. These stakes hold a consolidated value of roughly $2.2 billion.
9. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 38
Dividend Yield as of February 8: 2.72%
Oaktree Capital Management’s Stake Value: $511,997,000
The third-quarter data of Insider Monkey shows that the hedge fund interest spiked in Vistra Corp. (NYSE:VST), a Texas-based electricity and power generation company. 38 hedge funds tracked by Insider Monkey held positions in the company in Q3, up from 32 in the previous quarter. The total value of these stakes is over $1.22 billion.
In Q3 2021, Oaktree Capital held a stake worth roughly $512 million in Vistra Corp. (NYSE:VST), after increasing its position by 1%. The company represented 7.14% of the hedge fund’s 13F portfolio. In 2021, Vistra Corp. (NYSE:VST) increased its quarterly dividend by 11% to $0.15 per share. The stock’s dividend yield is 2.72%.
Vistra Corp. (NYSE:VST) announced a $2 billion common share repurchase program, which signals the management’s responsibility to shareholder value. In light of this, recently, BMO Capital lifted its price target on the stock to $27, while maintaining an Outperform rating on the shares. Citadel Investment Group was one of the largest shareholders of Vistra Corp. (NYSE:VST) in Q3, owning a stake worth over $156.5 million.
8. AngloGold Ashanti Limited (NYSE:AU)
Number of Hedge Fund Holders: 10
Dividend Yield as of February 8: 2.75%
Oaktree Capital Management’s Stake Value: $66,029,000
AngloGold Ashanti Limited (NYSE:AU) is a South African gold mining company with operations in four continents. The company currently pays a quarterly dividend of $0.059 per share, with a dividend yield of 2.75%.
In Q3 2021, Oaktree Capital increased its stake in AngloGold Ashanti Limited (NYSE:AU) by 25% and held a stake worth over $66 million. The company made up 0.92% of the fund’s 13F portfolio. In the past six months, AngloGold Ashanti Limited (NYSE:AU) delivered a 21.2% return to shareholders, as of the market close of February 7.
At the end of Q3 2021, 10 hedge funds tracked by Insider Monkey held stakes in AngloGold Ashanti Limited (NYSE:AU), valued at roughly $328 million. In comparison, in the previous quarter, 12 hedge funds held a consolidated stake worth $372.8 million in the Johannesburg-based company.
7. Kilroy Realty Corporation (NYSE:KRC)
Number of Hedge Fund Holders: 24
Dividend Yield as of February 8: 3.13%
Oaktree Capital Management’s Stake Value: $101,633,000
An American real estate investment trust, Kilroy Realty Corporation (NYSE:KRC) increased its quarterly dividend by 4% in 2021 to $0.52 per share. The stock’s dividend yield stands at 3.13%. According to analysts, the yield is considered safe, when coupled with its payout ratio of 55%. Kilroy Realty Corporation (NYSE:KRC) has increased its dividend at a CAGR of 6.7% in the past five years.
As of Q3 2021, 24 hedge funds tracked by Insider Monkey held stakes in Kilroy Realty Corporation (NYSE:KRC), down from 26 in the preceding quarter. The total value of these stakes is over $422.8 million, showing significant growth from $241 million worth of stakes held by hedge funds in Q2.
Oaktree Capital started building its position in Kilroy Realty Corporation (NYSE:KRC) during the first quarter of 2021 and increased its stake in the company ever since. In Q3 2021, the hedge fund held $101.6 million worth of shares in the company, after increasing its position by 89% during the quarter. The company accounted for 1.41% of the fund’s portfolio.
6. Eagle Bulk Shipping Inc. (NASDAQ:EGLE)
Number of Hedge Fund Holders: 13
Dividend Yield as of February 8: 4.05%
Oaktree Capital Management’s Stake Value: $190,666,000
Eagle Bulk Shipping Inc. (NASDAQ:EGLE) is an American owner and operator of dry bulk vessels, having a fleet of 53 ships. The company announced a dividend policy in November 2021, paying a quarterly dividend of $0.50 per share, with a dividend yield of 4.05%. According to its policy, Eagle Bulk Shipping Inc. (NASDAQ:EGLE) will be paying 30% of its net income to shareholders in dividends every quarter.
In Q3 2021, Oaktree Capital did not change its position in Eagle Bulk Shipping Inc. (NASDAQ:EGLE), which represented 2.66% of the hedge fund’s portfolio. The fund held a stake worth over $190.6 million in the company in Q3. In November 2021, BTIG Research boosted its price target on Eagle Bulk Shipping Inc. (NASDAQ:EGLE) to $64, with a Buy rating on the shares, appreciating the company’s reduced costs and improving balance sheet.
As per Insider Monkey’s Q3 data, 13 hedge funds held positions in Eagle Bulk Shipping Inc. (NASDAQ:EGLE), down significantly from 25 in the previous quarter. These stakes hold a consolidated value of roughly $284 million. Along with Oaktree Capital, Two Sigma Advisors was also one of the company’s major shareholders in Q3, owning shares worth $10.5 million.
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Disclosure. None. 10 Best Dividend Stocks According to Howard Marks’ Oaktree Capital Management is originally published on Insider Monkey.
