In this article we discuss the 10 best dividend stocks to buy now according to billionaire Leon Cooperman. If you want to skip our detailed analysis of Cooperman’s history and hedge fund performance, go directly to the 5 Best Dividend Stocks to Buy Now According to Billionaire Leon Cooperman.
Billionaire Leon Cooperman, who oversees Omega Advisors, is the son of a plumber from the South Bronx. He received an MBA from Columbia University. He joined Goldman Sachs immediately after graduation and founded Omega Advisors in 1991. Omega Advisors invests in domestic public equity and hedging markets. The investment guru also focuses on macroeconomic trends when making investment decisions. Cooperman has maintained a significant portfolio in energy companies despite huge losses in 2020 in the wake of slowing demand due to the COVID-19 pandemic.
Since its inception, Omega Advisors recorded over 12% in annual returns up to 2018 after which the fund stopped accepting money from outside investors.
As of the end of the fist quarter, Cooperman’s hedge fund has significant stakes in various growth and value stocks, including General Motors Company (NYSE: GM), Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG).
Omega held 375,000 shares of General Motors Company (NYSE: GM) at the end of the first quarter of 2021. Recently, General Motors Company (NYSE: GM) announced a $40 million investment plan at its Pontiac Stamping Plant. The investment will mainly focus on renovating existing facilities, installing new machinery, and laying foundation infrastructure for future electric vehicle production.
On May 18, General Motors Company (NYSE: GM) was rated “Buy” by Argus, with the firm noting that the strong performance was driven by higher pricing on full-size pickups, the successful launch of the full-size SUVs, and higher prices for used vehicles.
Another notable stock in Cooperman’s portfolio is Amazon.com, Inc. (NASDAQ: AMZN). The investor owns a $30.94 million stake in the company. Amazon.com, Inc. (NASDAQ: AMZN) recently announced its net income of $8.1 billion or $15.79 per diluted share in Q1 2021, up from $2.5 billion, or $5.01 per diluted share reported in Q1 2020. During the quarter, the retail giant reported a record 44% increase in net sales to $108.5 billion from $75.5 billion reported in Q1 2020.
Cooperman also 60,000 shares of Alphabet Inc. (NASDAQ: GOOG), worth over $123.75 million. Alphabet is one of the leading tech stocks that have reaped huge from increased online activities driven by the COVID-19 pandemic. The company recently reported record profits for Q1 2021, the second quarterly record increase in a row.
Diversification is the key in today’s volatile financial markets, which are causing trouble even for the experts. 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.
Here is a list of Leon Cooperman’s stock picks in 2021. We used Cooperman’s 13F portfolio for Q1 2021 for this analysis.
Best Dividend Stocks to Buy Now According to Billionaire Leon Cooperman
10. Microsoft Corporation (NASDAQ: MSFT)
Cooperman’s Stake Value: $57,930,000
Percentage of Leon Cooperman’s 13F Portfolio: 3.61%
Dividend Yield: 0.92 %
No. of Hedge Fund Holders: 251
Microsoft Corporation (NASDAQ: MSFT) is a tech company that develops, licenses, and supports software, services, devices, and solutions. It is placed tenth on our list of 10 best dividend stocks to buy now according to billionaire Leon Cooperman. Just like General Motors Company (NYSE: GM), Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG), Microsoft is one of the best stocks to buy according to billionaire Leon Cooperman.
Microsoft and Intel Corporation (NASDAQ: INTC) recently launched Windows 10 Pro devices powered by the Intel vPro® platform and designed for small and medium businesses (SMBs) in India. The devices will help employees stay connected, manage remote deployments quickly and flexibly, and safeguard against security threats. On June 2, KGI Securities rated the stock as “Outperform,” and set a price target of $300.
Polen Global Growth Fund, in its Q1 2021 investor letter, mentioned Microsoft Corporation (NASDAQ: MSFT). Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft Corporation (NASDAQ: MSFT)’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
9. Motorola Solutions, Inc. (NYSE: MSI)
Cooperman’s Stake Value: $18,805,000
Percentage of Leon Cooperman’s 13F Portfolio: 1.17%
Dividend Yield: 1.43 %
No. of Hedge Fund Holders: 29
Motorola Solutions, Inc. (NYSE: MSI) is a communication company that specializes in the provision of mission critical communications and analytics in the world. It is ranked ninth on our list of 10 best dividend stocks to buy now according to billionaire Leon Cooperman.
The company recently announced the launch of WAVE PTX, which will be used to offer instant communication through broadband subscription and will be available throughout the U.S. The new firm will allow companies to connect their employees and keep operations running independently from network technology.
Motorola Solutions, Inc. (NYSE: MSI) recently announced results for Q1 2021, with sales increasing 7% to $1.8 billion compared to what was reported in Q1 2020. The company’s software and services segment reported a 15% increase in sales.
Wedgewood Partners, in its Q1 2021 investor letter, mentioned Motorola Solutions, Inc. (NYSE: MSI). Here is what Baron Opportunity Fund has to say about Alphabet Inc. in its letter:
“Motorola Solutions saw a rebound in orders back to record levels in its North American Land Mobile Radio (LMR) business – where it enjoys a virtual monopoly – along with double-digit operating earnings growth in its software and services segment. COVID-19 posed some temporary challenges to Motorola’s selling organization; however, public service demand for more sophisticated and flexible emergency video and communications solutions stayed strong. The Company is capable of generating double-digit top-line growth as new federal spending should help expand state and local communication budgets. Despite a considerably better funding backdrop for Motorola’s largest customers, the stock trades at a multiple not too different compared to when things were not nearly as optimistic. As a result, Motorola continues to be a top holding (number 3) in our portfolio.”
8. Cigna Corporation (NYSE: CI)
Cooperman’s Stake Value: $102,740,000
Percentage of Leon Cooperman’s 13F Portfolio: 6.4%
Dividend Yield: 1.52 %
No. of Hedge Fund Holders: 53
Cigna Corporation (NYSE: CI) offers insurance and related products and services in the United States. It is placed eight on our list of 10 best dividend stocks to buy now according to billionaire Leon Cooperman.
For Q1 2021, the company reported EPS of $3.30 beating estimates by $0.13. Revenue during the period was up 6.8% YoY to $41 billion. For FY 2021, Cigna expects revenue to be $166 billion. In April, Cigna declared a quarterly dividend of $1.00 per share, in line with previous.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Cigna Corporation (NYSE: CI) was one of them. Here is what the fund said:
“New purchases include Cigna. Cigna is a leading managed care company which operates through the following major segments: health services, integrated medical, international markets and group disability. It’s one of the few managed care organizations in the United States with the scale and size to compete effectively. Cigna has recently focused on deleveraging its balance sheet and further diversifying its business, after completing the Express Scripts acquisition in late 2018. Additionally, the company has partnered with Amazon, which will offer two new pharmacy options—including a self-pay offering. Cigna will administer the self-pay option through its health services division Evernorth. The partnership should be one of many strong earnings drivers for Cigna, which we believe is currently trading at an attractive valuation.”
7. Comcast Corporation (NASDAQ: CMCSA)
Cooperman’s Stake Value: $8,117,000
Percentage of Leon Cooperman’s 13F Portfolio: 0.5%
Dividend Yield: 1.82%
No. of Hedge Fund Holders: 88
Comcast Corporation (NASDAQ: CMCSA) is a media and technology company with operations in the U.S and around the world. It is ranked seventh on our list of 10 best dividend stocks to buy now according to billionaire Leon Cooperman.
Comcast Corporation (NASDAQ: CMCSA) reported a 2.2% increase in Q1 2021 revenue. Net income increased 55.1% to $3.3 billion while adjusted net income increased 8.1% to $3.5 billion.
The communication company announced a partnership with Colorado Rockies to offer high-performance connectivity and increased bandwidth to help create a more digital gameday experience for users.
On April 30, Oppenheimer upgraded the stock to “Outperform” from “Perform.” While Raymond James upgraded the stock to “Outperform” from “Market Perform” on April 16.
Nelson Capital Management, in its Q1 2021 investor letter, mentioned Comcast Corporation (NASDAQ: CMCSA). Here is what Nelson Capital Management has to say about Alphabet Inc. in its letter:
“Comcast is the Largest cable provider in the U.S. and is the dominant internet access provider in the markets it serves. Though Comcast will likely see further declines in cable subscriptions due to ongoing cord-cutting, it should be able to off set that lost revenue by growing internet access customers and instituting higher pricing. The pandemic has increased the importance of a fast internet connection, with more content streaming to homes at increasingly higher quality. Comcast made significant upgrades early on, allowing it to quickly deploy new technology and increase speeds to meet t he evolving needs of its customers.”
6. International Flavors & Fragrances Inc. (NYSE: IFF)
Cooperman’s Stake Value: $18,847,000
Percentage of Leon Cooperman’s 13F Portfolio: 1.17%
Dividend Yield: 2.17%
No. of Hedge Fund Holders: 55
International Flavors & Fragrances Inc. (NYSE: IFF) is a producer and supplier of cosmetic active and natural health ingredients used to produce various consumer products for global supply. It is placed sixth on our list of 10 best dividend stocks to buy now according to billionaire Leon Cooperman.
Just like General Motors Company (NYSE: GM), Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG), International Flavors & Fragrances is one of the best stocks to buy according to billionaire Leon Cooperman.
The company recently announced its financial results for Q1 2021 with $2.47 billion in net sales, an 83% increase from Q1 2020. The record increase is attributed to the merger with Nutrition & Biosciences (“N&B”).
Rhizome Partners, in their Q1 2021 investor letter, mentioned International Flavors & Fragrances Inc. (NYSE: IFF). Here is what the fund said:
“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as IFF. We do understand the market’s rationale. IFF’s products account for a small percentage of the customers’ cost while playing critical roles in the products’ performance. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”
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Disclosure: None. 10 Best Dividend Stocks to Buy Now According to Billionaire Leon Cooperman is originally published on Insider Monkey.
