In this article, we discuss the 10 best dividend stocks to buy now according to billionaire Louis Bacon. If you want to skip our detailed analysis of Bacon’s history, investment philosophy, and hedge fund performance, go directly to the 5 Best Dividend Stocks to Buy Now According to Billionaire Louis Bacon. Note that all hedge fund data is based on the exclusive group of 800+ funds tracked by Insider Monkey as part of our market-beating investment strategy.
Louis Bacon is one of the most successful and respected hedge fund managers on Wall Street, having made a name for himself as a commodities and currencies trader. He is the founder of Moore Capital Management, a hedge fund established in 1989 using an inheritance of $25,000 from his mother. The fund has returned 17.6% in annualized return since inception through 2019.
The New York-based hedge fund relies on a bold and global macro-based approach to generate returns. It was valued at about $7.87 billion as of the end of the first quarter, a drop from $9.01 billion as of the end of the fourth quarter in 2020.
The hedge fund generated its most returns in 2020 after Bacon decided to step back from managing investor’s money in 2019. Additionally, it has consolidated all three funds into a single fund allowing the hedge fund manager to take bolder and riskier bets in the market.
The consolidation paid off as Moore Capital gained more than 70% in 2020, considering one of the most unpredictable years in the investment world due to COVID-19 shocks. The slump in the capital markets, triggered by the pandemic, allowed the fund to take riskier bets, equaling billions of dollars in profits as the market bounced back and raced to all-time highs.
At the height of the pandemic, Bacon bought U.S government bonds, which soared to record highs as the Federal Reserve cut interest rates to record lows. Moore Capital also profited by taking bold bets on equity and company debt that ended up doing well in the aftermath of the pandemic. The hedge fund also profited by betting against equity and company debt that underperformed.
As of the end of the first quarter of 2021, a notable company in Bacon’s portfolio is a multi-national tech company, Microsoft Corporation (NASDAQ: MSFT). The hedge fund run by Louis Bacon owns 469,901 shares in the company worth over $110.79 million, representing 1.4% of their investment portfolio. Moore Capital Management has increased its stake in Microsoft Corporation (NASDAQ: MSFT) stock by 1,406% in the last quarter. On May 13, Rosenblatt rated the stock as “Buy,” and set a price target of $301.00. A total of 251 hedge funds tracked by Insider Monkey were bullish on MSFT at the end of the first quarter of 2021, down from 258 funds a quarter earlier.
Another stock in Bacon’s portfolio is Facebook, Inc. (NASDAQ: FB). Moore Capital Management holds 248,618 shares in the firm worth over $73.23 million. This represents 0.93% of their portfolio. The latest data reveals that Bacon’s stake in Facebook stock decreased by 18% in the last quarter. On June 11, the company bought BigBox VR, the inventors of computer-generated reality battle-royal game, Population: One. According to our database, the number of Facebook, Inc. (NASDAQ: FB)’s long hedge funds positions increased at the end of Q1 2021. There were 257 hedge funds that hold a position in Facebook, Inc. (NASDAQ: FB), compared to 242 funds in the fourth quarter.
Bacon also has a significant holding in Amazon.com, Inc. (NASDAQ: AMZN). Moore Capital Management owns 39,244 shares of Amazon.com, Inc. (NASDAQ: AMZN) at the end of the first quarter . Moore Capital Investments trimmed its stake in the stock by 6%. On April 6, Evercore ISI’s analyst Mark Mahaney initiated a coverage on the stock and rated it as “Outperform,” giving it a price target of $4,000.00. There were 243 hedge funds in our database that held stakes in Amazon.com, Inc. (NASDAQ: AMZN) at the end of the first quarter of 2021, compared to 273 funds in the fourth quarter of 2020.
Louis Bacon Moore of Moore Capital
But in this article our focus will be some of the best dividend stocks in Bacon’s Q1 portfolio.
Average investors have to tread the financial markets with extreme caution. Even experts are having a hard time making sense of the rapidly changing world. The hedge fund industry’s 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. 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 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.
With this context in mind, here is our list of the 10 best dividend stocks to buy according to billionaire Louis Bacon.
10 Best Dividend Stocks to Buy According to Billionaire Louis Bacon
10. Citigroup Inc. (NYSE: C)
Bacon’s Stake Value: $1,946,000
Percentage of Louis Bacon’s 13F Portfolio: 0.02%
Dividend Yield: 2.6%
Number of Hedge Fund Holders: 90
Citigroup Inc. (NYSE: C) is a varied monetary services holding company that provides numerous monetary products and services to consumers, business establishments, governments, and organizations in North America, Latin America, Asia, Europe, the Middle East, and Africa. It was founded in 1812 and ranks tenth on the list of 10 best dividend stocks to buy according to billionaire Louis Bacon. Citigroup currently has a $158.09 billion market capitalization. It delivered a 46.37% return in the past year.
Like Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT) and Amazon.com, Inc. (NASDAQ: AMZN), Citigroup Inc., is a notable stock in Bacon’s Q1 portfolio. On April 15, Citigroup Inc. posted earnings for the first quarter of 2021, reporting revenue of $19.3 billion, down 6.9% YoY, beating the estimates by $430 million. Citigroup is an excellent stock that should be in your portfolio if you are looking for a solid dividend play with future growth potential. On April 1, the company declared a dividend of $0.51 per share, in line with previous. The dividend yield was 2.67%.
The hedge fund run by Bacon owns 26,750 shares in the financial holding company worth over $1.95 million. Moore Capital Investments has decreased stake in Citigroup stock by 28% in the past few months. There were 90 hedge funds in our database that held stakes in Citigroup at the end of the first quarter of 2021, compared to 95 funds in the fourth quarter. Harris Associates is the company’s most significant stakeholder, with 27.32 million shares worth $1.99 billion.
Artisan Partners Limited Partnership in their Q4 2020 investor letter, mentioned Citigroup Inc. Here is what the fund said:
“We fully exited position in Citigroup Inc. (NYSE: C) . Global financial services company Citigroup Inc. (NYSE: C) made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”
9. PNM Resources, Inc. (NYSE: PNM)
Bacon’s Stake Value: $9,320,000
Percentage of Louis Bacon’s 13F Portfolio: 0.11%
Dividend Yield: 2.67%
Number of Hedge Fund Holders: 26
PNM Resources, Inc. (NYSE: PNM) is a closed-end energy establishment, which supplies electricity through its subsidiaries. PNM Resources, Inc. (NYSE: PNM) was incorporated in 1917 and ranks ninth in the 10 best dividend stocks to buy according to billionaire Louis Bacon. The company’s shares have gained about 26.98% in value over the last 12 months.
PNM Resources, Inc. (NYSE: PNM) has also paid consistent dividends over the last several years. On March 5, the company declared a quarterly dividend of $0.3275 per share in line with the previous. The forward yield is 2.66%. On May 26, Nuclear Regulatory Commission gave approval to the collaboration of Avangrid and PNM Resources, Inc. (NYSE: PNM). This merger is valued at $8.3 billion.
The hedge fund chaired by Bacon holds 190,000 shares in the company worth over $9.32 million. Moore Capital Investments’ stake in PNM Resources stock was increased by 15% in the past few months. As of Q1 2021, there were 26 hedge funds in Insider Monkey’s database that held stakes in PNM Resources, Inc. (NYSE: PNM), compared to 30 funds in the fourth quarter. Magnetar Capital, with 3.19 million shares, is the biggest stakeholder in the company.
8. Lockheed Martin Corporation (NYSE: LMT)
Bacon’s Stake Value: $3,418,000
Percentage of Louis Bacon’s 13F Portfolio: 0.04%
Dividend Yield: 2.68%
Number of Hedge Fund Holders: 50
Lockheed Martin Corporation (NYSE: LMT) is an American aeronautical company occupied in studying, expanding, and incorporating technology systems. The company was incorporated in 1912 and stands eighth on the list of 10 best dividend stocks to buy according to billionaire Louis Bacon. Lockheed Martin Corporation stock has offered investors returns exceeding 97.69% over the course of the past twelve months.
Like Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN), Lockheed Martin Corporation, is a notable stock in Bacon’s Q1 portfolio. On June 8, Lockheed Martin Corporation got a contract of $137.7 million to provide continued services to Naval Air Systems Command. The company has also paid consistent dividends over the last several years. In April, Lockheed Martin Corporation (NYSE: LMT) declared its Q1 2021 dividend of $2.60 per share, in line with the previous.
Moore Capital Investments holds 9,250 shares in the firm worth over $3.42 million. As of the end of the first quarter of 2021, 50 hedge funds in Insider Monkey’s database held stakes in Lockheed Martin Corporation (NYSE: LMT), compared to 53 funds in the fourth quarter. Arrowstreet Capital is the biggest stakeholder in the company, with 1.60 million shares worth $590.83 million. Arrowstreet Capital hedge fund increased its stake in the company by 5% in the first quarter and is the biggest stakeholder in the company.
Here is what Ariel Investments has to say about Lockheed Martin Corporation in their Q4 2020 investor letter:
“Lockheed Martin Corporation declined -7% in the quarter. Generally, the market expects less defense spending under Democratic administrations. Furthermore, defense stocks are considered “safe/non-cyclicals” less harmed by the COVID-19 economic downturn and less buoyed by an economic reopening. As a result, Lockheed outperformed the market as we went into the downturn in March but underperformed as we rallied in the fall and winter.”
7. Cisco Systems, Inc. (NASDAQ: CSCO)
Bacon’s Stake Value: $34,504,000
Percentage of Louis Bacon’s 13F Portfolio: 0.43 %
Dividend Yield: 2.69%
Number of Hedge Fund Holders: 59
Cisco Systems, Inc. (NASDAQ: CSCO) is an American transmission and infotech industry. It was founded in 1984 and is ranked seventh on our list of 10 best dividend stocks to buy according to billionaire Louis Bacon. Cisco Systems shares have gained about 21.52% over the last 12 months.
Cisco Systems, Inc. (NASDAQ: CSCO) is a solid option for income investors looking for a steady dividend payout. On May 26, the company declared a quarterly dividend of $0.37 per share, in line with the previous. The forward yield is 2.70%. Cisco Systems, Inc. (NASDAQ: CSCO) posted Q1 2021 earnings results on May 19, reporting earnings per share of $0.83 for the first three months of 2021, beating market predictions by $0.01.
Like Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), Lockheed Martin Corporation and Citigroup Inc. (NYSE: C), Cisco Systems, Inc. (NASDAQ: CSCO) is a notable stock in Bacon’s Q1 portfolio.
Moore Capital Investments holds 667,256 shares in the company worth over $34.50 million, representing 0.43% of their portfolio. David Blood and Al Gore’s Generation Investment Management is one of the 59 hedge funds tracked by Insider Monkey, having maximum stakes in Cisco Systems at the end of the first quarter of 2021. The fund owns over 23.25 million shares of the company, worth over $1.20 billion.
ClearBridge Investments in their Q1 2021 investor letter, mentioned Cisco Systems, Inc. Here is what the fund said:
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
6. The Chemours Company (NYSE: CC)
Bacon’s Stake Value: $6,169,000
Percentage of Louis Bacon’s 13F Portfolio: 0.07%
Dividend Yield: 2.69%
Number of Hedge Fund Holders: 27
The Chemours Company (NYSE: CC) is a chemical company, which provides chemicals to Europe, North America, Africa, Latin America, Middle East, and the Asia Pacific. The Chemours Company (NYSE: CC) was founded in 2014 is placed sixth on our list of 10 best dividend stocks to buy according to billionaire Louis Bacon. Chemours stock has returned more than 149.40% to investors over the course of the past twelve months.
The Chemours Company posted earnings for the first quarter of 2021 on May 3, reporting earnings per share of $0.71, missing market predictions by $0.08. The revenue for the first three months of 2021 was over $1.44 billion, up 10.04% YoY. On April 29, the company declared a quarterly dividend of $0.25 per share, in line with the previous. The forward yield is 2.67%.
The Chemours Company (NYSE: CC) is a new arrival on Louis Bacon’s portfolio, as his hedge fund bought about 221,039 shares of the company, worth $6.17 million. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Sessa Capital is a leading shareholder in The Chemours Company (NYSE: CC) with 8.88 million shares worth more than $247.77 million.
Like Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), Lockheed Martin Corporation and Citigroup Inc. (NYSE: C), The Chemours Company (NYSE: CC) is a notable stock in Bacon’s Q1 portfolio.
Miller Value Partners in its Q1 2021 investor letter, mentioned The Chemours Company. Here is what Miller Value Partners has to say about The Chemours Company in its letter:
“The Chemours Co (CC) rose 37.8% over the period. The company reported Q2 revenue of $1.093Bn, topping consensus of $1.087Bn by 1% while EBITDA of $166M beat estimates of $160M by 4%. Free cash flow of $50M improved $167M Y/Y, driving a Q2 cash balance of $1Bn and total liquidity of $1.4Bn. Management remains on track to achieve $160M of cost and $125M of capital expenditure (capex) reductions in FY20. Additionally, the company repaid the $300M preemptive draw on their revolving credit facility during August and September.”
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Disclosure: None. 10 Best Dividend Stocks to Buy According to Billionaire Louis Bacon is originally published on Insider Monkey.
