In this article, we present the list of 10 Dividend Stocks to Buy Now According to Billionaire Leon Cooperman. Click to skip ahead and see the 5 Dividend Stocks to Buy Now According to Billionaire Leon Cooperman.
Devon Energy Corporation (NYSE:DVN), Cigna Corporation (NYSE:CI), and Ashland Global Holdings Inc. (NYSE:ASH) are among the top dividend stock picks in the 13F portfolio of billionaire money managing icon Leon Cooperman.
Cooperman is the 78-year-old chairman and CEO of Omega Advisors, a hedge fund that managed about $3.6 billion in assets in mid-2018 before it was converted into a family office that now primarily manages Cooperman’s own wealth. That wealth is estimated to be $2.5 billion by Forbes, a figure that Cooperman himself has previously characterized as low. Cooperman plans to give away most of his fortune.
Cooperman got his start at Goldman Sachs, where he worked his way up to becoming the chairman of the firm’s asset management division. He struck out on his own in 1991, launching Omega Advisors, which delivered annualized returns of over 12% during its 27-year run, handily topping those of the S&P 500 during that time.
As of December 31, 2021, Cooperman’s family office had a 13F portfolio valued at $1.99 billion, which marked the seventh straight quarter that the portfolio has advanced in value, more than doubling in that span. Omega Advisors was most heavily invested in the finance sector, including several high-yielding REITs, and has also made a bigger move into energy stocks in recent quarters, which also tend to boast attractive dividends.
Given that portfolio construction, we decided to take a look at Leon Cooperman’s favorite dividend stock picks heading into 2022 in this article.
Leon Cooperman of Omega Advisors
Our Methodology
We surveyed Leon Cooperman’s long positions as of December 31 based on his latest 13F filing with the SEC. From there, we gathered his ten largest holdings in companies that have dividend yields of at least 1%. The stocks are listed in ascending order based on the size of Mr. Cooperman’s position.
We follow hedge funds like Omega Advisors because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns. All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q4 2021 reporting period.
10 Dividend Stocks to Buy Now According to Billionaire Leon Cooperman
10. Pioneer Natural Resources Company (NYSE:PXD)
Dividend Yield as of March 24: 1.24%
Value of Omega Advisors‘ 13F Position: $25.46 million
Pioneer Natural Resources Company (NYSE:PXD) was one of Leon Cooperman’s top-performing stock picks in 2021, gaining 59.74%. His Q1 2021 entry into the stock was well-timed, as shares have risen at a rapid rate since.
Many other hedge funds have missed out on the gains, as ownership of the stock rose by a modest 20% between mid-2020 and the end of 2021, a period during which the independent oil and gas E&P company’s shares more than doubled in value.
Pioneer Natural Resources Company (NYSE:PXD) announced on February 16 that it would pay out a quarterly base-plus-variable dividend of $3.78 on March 14 to shareholders of record as of February 28. In the prior quarter, the company’s cash variable dividend of $3.02 represented a 100% hike quarter-over-quarter and amounted to nearly 75% of the company’s Q3 free cash flow. PXD is projected to pull in over $7 billion in positive free cash flow in 2022 thanks to soaring commodity prices.
Like Devon Energy Corporation (NYSE:DVN), Cigna Corporation (NYSE:CI), and Ashland Global Holdings Inc. (NYSE:ASH), Pioneer Natural Resources is a compelling dividend stock pick that Leon Cooperman really likes.
Here is what ClearBridge Investments Dividend Strategy had to say about Pioneer Natural Resources Company (NYSE:PXD) in its Q3 2021 investor letter:
“Over the last year we have also added a position in Pioneer Natural Resources, a best-in-class producer in the Permian Basin. We added Pioneer as we anticipated rising commodity prices and sought more direct leverage to that trend. Our overweight to energy has benefited our performance this year, in particular through the first half of the year, and we believe the sector, still less than 3% of the S&P 500, remains underinvested and attractive going forward.”
9. NRG Energy, Inc. (NYSE:NRG)
Dividend Yield as of March 24: 3.76%
Value of Omega Advisors‘ 13F Position: $25.85 million
Leon Cooperman also took a stake in NRG Energy, Inc. (NYSE:NRG) during the first quarter of 2021. The move hasn’t been nearly as profitable as his PXD purchase, however, as NRG shares are virtually flat since the end of 2020.
NRG Energy, Inc. (NYSE:NRG) has lost quite a bit of favor in recent years among the exclusive group of hedge funds tracked by Insider Monkey, as ownership of the energy generation and retail electricity company’s stock has fallen by more than 50% since the middle of 2018.
NRG Energy, Inc. (NYSE:NRG) was forced to slash its dividends payments by 80% in 2016 as the company’s debt mounted. After a lengthy restructuring campaign that lead to improved financial health, NRG announced in late 2019 that it would boost its quarterly dividend 10-fold to $0.30 beginning in 2020, which represented a 100% increase over 2016 levels.
The company has plans to continue to raise it by 7-9% annually going forward, which it met with its latest dividend increase, an 8% hike in January that lifted its quarterly payouts to $0.35.
8. Motorola Solutions, Inc. (NYSE:MSI)
Dividend Yield as of March 24: 1.36%
Value of Omega Advisors‘ 13F Position: $27.17 million
Motorola Solutions, Inc. (NYSE:MSI) was another big performer for Leon Cooperman last year, gaining 61.84%. The billionaire money manager has owned a stake in the telecommunications equipment provider since Q2 2020. Cooperman owns 100,000 MSI shares as of December 31, unchanged from a quarter earlier.
Motorola Solutions, Inc. (NYSE:MSI) has raised its annual dividend payments for ten consecutive years and announced in the middle of February that its next quarterly dividend payment, due April 14, would be $0.79 per share, in line with previous. Motorola continues to grow its market share and boost its income, which bodes well for its dividend going forward.
Saturna Capital Amana Funds likes Motorola’s value potential in a market characterized by rising interest rates and inflation. Here is what the fund had to say about Motorola Solutions, Inc. (NYSE:MSI)
in its Q4 2021 investor letter:
“Given the likelihood of rising inflation and interest rates ahead, we anticipate adjustments to the portfolio to reduce exposure to highly valued stocks dependent on low interest rates to support terminal year valuations, while seeking investments in companies more correlated with a return to economic normalcy. Motorola Solutions is a recent addition to the portfolio and has done well.”
7. Arbor Realty Trust, Inc. (NYSE:ABR)
Dividend Yield as of March 24: 8.70%
Value of Omega Advisors‘ 13F Position: $42.92 million
Hedge fund ownership of Arbor Realty Trust, Inc. (NYSE:ABR) has been volatile over the past two years, cratering by 73% during the first two quarters of 2020 before returning to those previous levels by the end of Q1 2021. There’s been another 36% decline in ownership of the stock since then, however, with Cooperman being one of 14 money managers bullish on the REIT.
Arbor Realty Trust, Inc. (NYSE:ABR) has grown its dividend for nine consecutive years, boosting its quarterly payouts by more than 350% during that time. In February, it announced another 2.8% hike to its quarterly dividend, lifting it to $0.37 per share and pushing the yield on its shares even closer to 9%.
Arbor Realty Trust, Inc. (NYSE:ABR) is another company that will benefit from a rising interest rate environment, as the bulk of its loans has short durations, with a weighted average maturity of just two years. The company grew its balance sheet portfolio by 122% last year to $12.2 billion and produced $0.62 per share in distributable earnings in Q4, well below its current dividend payouts.
6. Chimera Investment Corporation (NYSE:CIM)
Dividend Yield as of March 24: 10.72%
Value of Omega Advisors‘ 13F Position: $51.34 million
Chimera Investment Corporation (NYSE:CIM) is another REIT with an attractive dividend yield that Leon Cooperman likes, as well as being one of his better-performing stock picks last year, gaining 53.45%. Unlike his newer dividend positions in companies like Devon Energy Corporation (NYSE:DVN), Cigna Corporation (NYSE:CI), and Ashland Global Holdings Inc. (NYSE:ASH), Chimera is also the second-oldest holding in Cooperman’s 13F portfolio, dating back to the middle of 2012.
Despite its attractive yield, Chimera Investment Corporation (NYSE:CIM)’s $0.33 quarterly dividend payments stand well below the company’s historical average. Between 2012 and 2019, those payments fell in the $0.45 to $0.50 range and even topped $0.80 more than a decade ago.
Chimera Investment Corporation (NYSE:CIM) has been able to greatly improve its balance sheet in recent years, pushing its leverage down to historically low levels. With plenty of cash on hand, the company is now in a prime position to grow its portfolio in 2022 and further boost its net income, which came in at $2.44 per share on a GAAP basis in 2021.
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Disclosure: None. 10 Dividend Stocks to Buy Now According to Billionaire Leon Cooperman is originally published at Insider Monkey.
