In this article we take a look at the 10 best dividend stocks to buy based on billionaire David Tepper’s Q1 portfolio. You can skip our detailed analysis of Tepper’s history and his hedge fund’s returns to go directly to 5 Best Dividend Stocks to Buy According to Billionaire David Tepper.
Currently ranked as the 258th richest person in the world, billionaire David Tepper heads Appaloosa Management LP, based in Florida. The American billionaire and businessman also owns the Carolina Panthers of the National Football League. His educational career lists a bachelor’s degree in Economics from the University of Pittsburgh, which is completed in 1978, alongside an MBA from Carnegie Mellon University. Carnegie Mellon also happens to have named their business school after Tepper, who donated $67 million to the university in 2013.
In 2012, Institutional Investor’s Alpha ranked Tepper’s $2.2 billion paycheck as the world’s highest for any hedge fund manager. Tepper also ranked third on Forbes’ “The Highest-Earning Hedge Fund Managers 2018,” by virtue of his annual earnings worth $1.5 billion. His success in life has translated into the same being true when it comes to his fund’s fortune.
After Appaloosa Management’s establishment, by 2001 he had generated 61% in returns by simply prioritizing distressed bonds. Tepper’s distress investment strategy seems to be riskier than most in the field, as he has a track record for buying shares in shaky companies like MCI Inc., Mirant, and Conseco. Tepper apparently likes to “keep the market on the edge,” and believes that investors should not go off of what’s being said in the news about risky stocks, as both markets and people adapt. Tepper’s fund focuses mostly on global public equity and fixed income markets.
Appaloosa Management made $7 billion through the purchase of distressed financial stocks in 2009, profiting from their recovery. The fund’s portfolio value stands at $6.9 billion, and as of the end of the first quarter of 2021, its major holdings include big-name companies like Micron Technology, Inc. (NASDAQ: MU), Amazon.com, Inc. (NASDAQ: AMZN), Facebook, Inc. (NASDAQ: FB), and Alphabet Inc (NASDAQ: GOOG).
Tepper increased his stake in Amazon.com, Inc. (NASDAQ: AMZN) as of Q420 by 40%, and the stock now takes up 8.26% of Appaloosa Management’s portfolio. Appaloosa Management also has a $536 million stake in Facebook, Inc. (NASDAQ: FB) as of the end of the first quarter. Micron Technology, Inc. (NASDAQ: MU) is the biggest holding of David Tepper as of the first quarter, as his hedge fund has a $642 million stake in the chips company. The hedge fund also owns a $478 million stake in Alphabet Inc (NASDAQ: GOOG).
Tepper is an exception in an industry that is reeling from losses. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
But apart from these four above, Appaloosa Management has also shown a tendency of investing in dividend stocks, with quite a few of its holdings being dividend-yielders. Notable examples include HCA Healthcare, Inc. (NYSE: HCA), Emerson Electric Co. (NYSE: EMR), and Energy Transfer LP (NYSE: ET). Based on Tepper’s investment strategy and current holdings, we have managed to thus create a list of the 10 best dividend stocks to buy according to billionaire David Tepper, which includes names like HCA Healthcare, Inc. (NYSE: HCA), among others. The stocks have been selected from Tepper’s 13F holdings of Q1 and ranked on the basis of their dividend yield. To go through our entire list of the best dividend stocks to invest in as of now, read ahead.
Best Dividend Stocks to Buy According to Billionaire David Tepper
10. HCA Healthcare, Inc. (NYSE: HCA)
Tepper’s Stake Value: $178,923,000
Percentage of David Tepper’s 13F Portfolio: 2.56%
Dividend Yield: 0.92%
No. of Hedge Fund Holders: 62
HCA Healthcare, Inc. (NYSE: HCA) ranks 10th on the list of billionaire David Tepper’s top 10 dividend stock picks. This American for-profit healthcare company has worked with healthcare facilities since 1968. It is based in Nashville, Tennessee, and as of last year had a revenue of $51.53 billion.
HCA Healthcare, Inc. (NYSE: HCA) has gained 28.25% year to date and has a market cap of $69 billion. HCA Healthcare, Inc. (NYSE: HCA) has a dividend yield of 0.92% or $1.92 per share.
9. UnitedHealth Group Incorporated (NYSE: UNH)
Tepper’s Stake Value: $103,249,000
Percentage of David Tepper’s 13F Portfolio: 1.48%
Dividend Yield: 1.45%
No. of Hedge Fund Holders: 89
UnitedHealth Group Incorporated (NYSE: UNH) is an American for-profit insurance company. It deals in healthcare insurance and is based in Minnetonka, Minnesota. Alongside its insurance policies, UnitedHealth Group Incorporated (NYSE: UNH) offers healthcare products as well. It ranks 9th in our list of best dividend stocks to buy according to billionaire David Tepper.
UnitedHealth Group Incorporated (NYSE: UNH) gained 14.19% year to date and has a market cap of $376 billion. Like Micron Technology, Inc. (NASDAQ: MU), (NASDAQ: AMZN), Facebook, Inc. (NASDAQ: FB) and Alphabet Inc (NASDAQ: GOOG), UnitedHealth Group Incorporated (NYSE: UNH) is one of the best stocks to buy based on billionaire David Tepper’s Q1 portfolio.
8. Kohl’s Corporation (NYSE: KSS)
Tepper’s Stake Value: $94,631,000
Percentage of David Tepper’s 13F Portfolio: 1.35%
Dividend Yield: 1.84%
No. of Hedge Fund Holders: 35
Kohl’s Corporation (NYSE: KSS) ranks 8th on our list of the best dividend stocks to buy according to billionaire David Tepper. It is the owner of Kohl’s department store retail chain, which has stores in every US state except Hawaii.
The company had 14 analysts covering its stock, and giving it a consensus “Buy” rating. This is in spite of the fact that Kohl’s Corporation’s (NYSE: KSS) value fell after its Q121 report was released.
According to Kohl’s Corporation’s (NYSE: KSS) Q121 earnings report, the company saw an adjusted EPS profit of $1.05. The company’s revenues also grew to $3.8 billion and its current market value is $8.4 billion.
7. Emerson Electric Co. (NYSE: EMR)
Tepper’s Stake Value: $81,739,000
Percentage of David Tepper’s 13F Portfolio: 1.17%
Dividend Yield: 2.04%
No. of Hedge Fund Holders: 45
Emerson Electric Co. (NYSE: EMR) is an American manufacturing company. It is a Fortune 500 company that manufactures products and provides engineering services to its customers. It ranks 7th in our list of best dividend stocks to buy according to billionaire David Tepper.
Tepper’s Appaloosa Management reduced its shares in Emerson Electric Co. (NYSE: EMR) in Q121, making it only 1.17% of the fund’s portfolio. Emerson Electric Co. (NYSE: EMR) has a market cap of approximately $58.5 billion and it gained 25.05% year to date. Its dividend yield is currently 2.04% or $2.02 per share. Like Micron Technology, Inc. (NASDAQ: MU), Amazon.com, Inc. (NASDAQ: AMZN), Facebook, Inc. (NASDAQ: FB), and Alphabet Inc (NASDAQ: GOOG), Emerson Electric Co. (NYSE: EMR) is one of the best dividend stocks to buy based on Tepper’s Q1 portfolio.
6. QUALCOMM Incorporated (NASDAQ: QCOM)
Tepper’s Stake Value: $99,443,000
Percentage of David Tepper’s 13F Portfolio: 1.42%
Dividend Yield: 2.05%
No. of Hedge Fund Holders: 73
QUALCOMM Incorporated (NASDAQ: QCOM) is an American semiconductor company. Its headquarters are in San Diego, California, and the company ranks 6th on our list of Tepper’s top 10 dividend stock picks. QUALCOMM Incorporated (NASDAQ: QCOM) manufactures semiconductors, software, and services related to wireless technology.
QUALCOMM Incorporated (NASDAQ: QCOM) is having a bad year, as the stock is down close to 10% year to date. However, it’s a decent stock to buy for long-term gains. Latest reports from TrendForce reveal that Qualcomm (NASDAQ:QCOM) was leading the top IC design (fabless) companies in terms of Q1 revenues as the company saw a 53% in its revenue amid growth in smartphones, RF, IoT, and automotive.
Click to continue the list with the 5 Best Dividend Stocks to Buy According to Billionaire David Tepper.
Suggested Articles:
- Top 10 Cloud Stocks To Buy
- 10 best high dividend stocks to buy
- 10 Best Dividend Paying Stocks to Buy Under $50
Disclosure: None. 10 Best Dividend Stocks to Buy According to Billionaire David Tepper is originally published at Insider Monkey.
