In this article, we will discuss the 10 best dividend stocks to buy according to billionaire Howard Marks. If you want to skip our detailed analysis of Marks’ history, investment philosophy, and hedge fund performance, go directly to the 5 Best Dividend Stocks to Buy According to Howard Marks.
Born in New York, Howard Marks started his career at Citibank and, in 1985, became an integral part of TCW Group as its fund manager. Howard Marks, in 1995, along with several other individuals at TCW, started Oaktree Capital Management. He is the co-organizer and co-chairman of Oaktree Capital Management, one of the biggest financiers in distressed securities global.
Established in Los Angeles, Oaktree is a financial institution that invests in convertible bonds, corporate debt, distressed debt, and appropriate investments. Oaktree Capital Management handles finance of benefactions, fundamentals, and pension funds. It focuses on firms that are mostly deferred in the grading of ‘contrarian investments.’ This hedge fund went public in 2012.
The firm’s 13F portfolio is valued at approximately $7.184 billion as of the end of the first quarter of 2021. In 2020 the hedge fund posted a return of 99.48% returns compared to a 18.25% return posted by SPDR S&P 500 ETF Trust (NYSE: SPY). While it posted returns of about 10.53% in the first quarter of 2021 compared to a 5.17% return posted by S&P 500.
Among the notable holdings of Marks as of the first quarter of 2021 are Berry Corporation (NASDAQ: BRY), PG&E Corporation (NYSE: PCG) and Vale S.A. (NYSE: VALE).
Berry Corporation (NASDAQ: BRY), in which Howard Marks has a $71.15 million stake, is gaining a lot of attention. On May 4, Berry declared a quarterly dividend of $0.04 per share, in line with the previous. The dividend yield is 2.37%. Berry Corporation (NASDAQ: BRY) posted earnings for the first quarter of 2021. It reported earnings per share of $0.07, beating market predictions by $0.14. The revenue for the first three months of 2021 was $135.27 million, up 10.8% YoY, beating the estimates by $13.56 million. On April 4, Berry Corporation (NASDAQ: BRY) was upgraded at KeyBanc to “Overweight” from “Sector Weight.” The price target was set at $9.
In PG&E Corporation (NYSE: PCG), Marks owns 22.50 million shares. PG&E Corporation (NYSE: PCG) gained 19.59% over the past 12 months. On May 14, Mizuho raised the price target of PG&E Corporation (NYSE: PCG) stock to $16 from $15.
Another notable stock in Marks’ portfolio is Vale S.A. (NYSE: VALE). The investor owns a $110.68 million stake in the company. On June 23, Vale S.A. declared a quarterly dividend of $0.436 per share. The dividend yield is 3.99%. On June 3, RBC Capital raised the price target of Vale S.A. (NYSE: VALE) to $29 from $25 and maintained an “Outperform” rating.
Howard Marks of Oaktree Capital
Earlier this year, Howard Marks said during an interview that it’s a “challenging” time for traditional distressed investing amid the pandemic. He isn’t alone. 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 26, 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 16. That’s why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context and industry outlook in mind, let’s start the list of the 10 best dividend stocks to buy according to Billionaire Howard Marks.
Best Dividend Stocks to Buy According to Billionaire Howard Marks
10. MGIC Investment Corporation (NYSE: MTG)
Marks’ Stake Value: $41,827,000
Percentage of Howard Marks’ 13F Portfolio 0.58%
Dividend Yield: 1.71%
Number of Hedge Fund Holders: 28
MGIC Investment Corporation (NYSE: MTG), with its subsidiaries, supplies private mortgage insurance, other mortgage credit risk administration solutions, and additional services to lenders and government-supported units. It was founded in 1957 and ranks tenth on the list of 10 best dividend stocks to buy according to billionaire Howard Marks. MGIC Investment Corporation (NYSE: MTG) shares have gained about 74.24% over the last 12 months.
On May 5, MGIC Investment Corporation (NYSE: MTG) posted earnings results for the first three months of 2021. The earnings per share was $0.42, in line with the previous. On April 29, the company declared a quarterly dividend of $0.06 per share, in line with the previous. On July 5, B. Riley raised the price target of MGIC to $17 from $16. The firm maintained the rating at “Buy.”
Just like Berry Corporation (NASDAQ: BRY), PG&E Corporation (NYSE: PCG), and Vale S.A. (NYSE: VALE), MGIC Investment Corporation (NYSE: MTG) is one of the best stocks to buy according to billionaire Howard Marks.
Oaktree Capital Management holds 3.02 million shares in the company worth $41.83 million, representing 0.58% of their portfolio. At the end of the first quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $268.80 million in MGIC Investment Corporation (NYSE: MTG), up from 27 the preceding quarter worth $260.95 million.
9. Americold Realty Trust (NYSE: COLD)
Marks’ Stake Value: $452,855,000
Percentage of Howard Marks’ 13F Portfolio: 6.3%
Dividend Yield: 2.3%
Number of Hedge Fund Holders: 16
Americold Realty Trust (NYSE: COLD) is one of the world’s biggest publicly traded REITs which focuses on the possession, working, acquisition, and development of thermostatted warehouses. It was founded in 1997, and the company stands ninth on the list of 10 best dividend stocks to buy according to billionaire Howard Marks. Americold currently has a $9.65 billion market capitalization.
On May 20, Americold Realty Trust (NYSE: COLD) declared a quarterly dividend of $0.22 per share, in line with the previous. On June 7, KeyBanc initiated a coverage on Americold Realty Trust, and rated the stock as “Overweight,” setting a price target at $43.
Just like Berry Corporation (NASDAQ: BRY), PG&E Corporation (NYSE: PCG), and Vale S.A. (NYSE: VALE), MAmericold Realty Trust (NYSE: COLD) is one of the best stocks to buy according to billionaire Howard Marks.
The hedge fund run by Howard Marks owns 11.77 million shares in Americold Realty Trust (NYSE: COLD) worth $452.86 million, representing 6.3% of their investment portfolio.
8. Chesapeake Energy Corporation (NASDAQ: CHK)
Marks’ Stake Value: $518,038,000
Percentage of Howard Marks’ 13F Portfolio: 7.21%
Dividend Yield: 2.52%
Number of Hedge Fund Holders: 42
Chesapeake Energy Corporation (NASDAQ: CHK) is an American energy company occupied in hydrocarbon exploration. Chesapeake Energy Corporation (NASDAQ: CHK) was founded in 1989, and it ranks eighth on the list of 10 best dividend stocks to buy according to billionaire Howard Marks. Chesapeake Energy Corporation (NASDAQ: CHK) has returned 20.15% to investors in the last 3 months.
On May 11, Chesapeake Energy Corporation (NASDAQ: CHK) posted earnings for the first quarter of 2021. It reported earnings per share of $1.48, missing market predictions by $0.37. The revenue for the first three months of 2021 was over $880 million, down 65.2% YoY, beating the estimates by $78.07 million. On June 29, CapitalOne initiated a coverage on Chesapeake Energy Corporation (NASDAQ: CHK) with an “Equal-weight” rating and a price target of $57.
Just like Berry Corporation (NASDAQ: BRY), PG&E Corporation (NYSE: PCG), and Vale S.A. (NYSE: VALE), Chesapeake Energy Corporation (NASDAQ: CHK) is one of the best stocks to buy according to billionaire Howard Marks.
Chesapeake Energy Corporation (NASDAQ: CHK) is a new addition to billionaire Howard Marks’ hedge fund portfolio, as Oaktree Capital Management bought 11.94 million shares of the company, worth $518.04 million. Hedge funds are loading up on Chesapeake Energy, as Insider Monkey’s data shows that 42 hedge funds held stakes in the company in the first quarter of 2021, compared to 0 funds a quarter earlier.
7. Kilroy Realty Corporation (NYSE: KRC)
Marks’ Stake Value: $59,724,000
Percentage of Howard Marks’ 13F Portfolio: 0.83%
Dividend Yield: 2.88%
Number of Hedge Fund Holders: 27
Kilroy Realty Corporation (NYSE: KRC) possesses, expands, obtains, and manages realty assets mainly in the maritime areas of Los Angeles, Orange County, San Diego, the San Francisco Bay Area, and greater Seattle. Kilroy Realty Corporation (NYSE: KRC) was founded in 1947 and is placed seventh on the list of 10 best dividend stocks to buy according to billionaire Howard Marks. Kilroy Realty Corporation (NYSE: KRC) shares have gained about 12.53% in value over the last 12 months.
On May 20, Kilroy Realty Corp declared a quarterly dividend of $0.5000 per share, in line with the previous. KRC is a compelling investment opportunity as the company has paid dividends since 2001. On June 25, Deutsche Bank raised the price target on Kilroy Realty Corporation (NYSE: KRC) to $65 from $60.
Just like Berry Corporation (NASDAQ: BRY), PG&E Corporation (NYSE: PCG), and Vale S.A. (NYSE: VALE), Kilroy Realty Corporation (NYSE: KRC) is one of the best stocks to buy according to billionaire Howard Marks.
Howard Marks added this stock to its portfolio in the latest quarter by buying 910,011 shares. In addition, hedge fund sentiment increased for Kilroy Realty Corporation (NYSE: KRC) in the first quarter of 2021. Insider Monkey’s data shows that 27 elite hedge funds held stakes in the company in the first quarter, up from 25 funds a quarter earlier.
6. Equity Residential (NYSE: EQR)
Marks’ Stake Value: $66,401,000
Percentage of Howard Marks’ 13F Portfolio: 0.92%
Dividend Yield: 3.07%
Number of Hedge Fund Holders: 23
Equity Residential (NYSE: EQR) develops, acquires and manages residential properties. The company was incorporated in 1969 and is ranked sixth on the list of 10 best dividend stocks to buy according to billionaire Howard Marks. The company’s shares has offered investors returns of 31.45% over the course of the past 12 months.
On June 17, Equity Residential declared a dividend of $0.6025 per share. On June 11, Morgan Stanley raised the price target of Equity Residential (NYSE: EQR) to $82 from $79. The firm maintained the rating at “Equal Weight.”
Just like Berry Corporation (NASDAQ: BRY), PG&E Corporation (NYSE: PCG), and Vale S.A. (NYSE: VALE), Equity Residential (NYSE: EQR) is one of the best stocks to buy according to billionaire Howard Marks.
The hedge fund run by Howard Marks owns 927,000 shares in the company worth $66.40 million, representing 0.92% of their investment portfolio. New York-based investment fund First Eagle Investment Management is the biggest stakeholder in the company, with 6.07 million shares worth $434.78 million.
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Disclosure: None. 10 Best Dividend Stocks to Buy According to Billionaire Howard Marks is originally published on Insider Monkey.
