In this article, we discuss the 4 dividend stock picks of David Einhorn’s Greenlight Capital. If you want to read our detailed analysis of Einhorn’s investment philosophy, hedge fund returns and history, go directly to 9 Dividend Stock Picks of David Einhorn’s Greenlight Capital.
4. Jack in the Box Inc. (NASDAQ:JACK)
Greenlight Capital’s Stake Value: $18.46 million
Greenlight Capital’s 13F Portfolio: 1.05%
Number of Hedge Fund Holders: 27
Dividend Yield (as of April 28): 2.08%
Jack in the Box Inc. (NASDAQ:JACK) is a California-based restaurant chain with approximately 2,200 locations across the United States. As of April 28, the firm’s dividend yield stood at 2.08%. Comprising of 211,000 shares, Greenlight Capital’s stake in Jack in the Box Inc. (NASDAQ:JACK) at the end of the fourth quarter was worth $18.46 million, and showed an increase of 42% over the preceding quarter.
On April 12, Citi analyst Jon Tower initiated coverage of Jack in the Box Inc. (NASDAQ:JACK) with a ‘Neutral’ rating and a $104 price target. He expects the shares to remain range-bound as investors digest the announced acquisition of Del Taco. In the fourth quarter, Jack in the Box Inc. (NASDAQ:JACK) posted an EPS of $1.97, which beat estimates by $0.06. Quarterly revenue of $344.71 million was slightly below estimates by $1.17 million.
27 hedge funds were bullish on Jack in the Box Inc. (NASDAQ:JACK) shares in the fourth quarter of 2021, holding stakes with a combined worth of $156.3 million. This is an upward trend from the preceding quarter where 26 hedge funds held $179.7 million worth of positions in the company. Millennium Management was the largest shareholder of Jack in the Box Inc. (NASDAQ:JACK) in the fourth quarter with 337,000 shares worth $29.45 million.
3. The Chemours Company (NYSE:CC)
Greenlight Capital’s Stake Value: $58.45 million
Greenlight Capital’s 13F Portfolio: 3.34%
Number of Hedge Fund Holders: 35
Dividend Yield (as of April 28): 3.01%
The Chemours Company (NYSE:CC) is a Delaware-based firm which provides performance chemicals to a range of industries such as plastics, coatings, transportation, semiconductor and consumer electronics, among others. Einhorn’s Greenlight Capital owned 1.74 million shares of the firm in the fourth quarter, worth $58.45 million amounting to 3.34% of the fund’s total portfolio.
RBC Capital analyst Arun Viswanathan in February maintained an ‘Outperform’ rating on The Chemours Company (NYSE:CC) shares and lowered the price target to $41 from $44. He sees headwinds such as cost inflation moderating in the second half of 2022 and continuing to improve in 2023.
The Chemours Company (NYSE:CC) posted a revenue of $1.58 billion for the fourth quarter, outperforming estimates by $7.28 million and showing an increase of 17.8% year-on-year. EPS was recorded at $0.81, which fell below analysts’ estimates by $0.07.
35 hedge funds held stakes in The Chemours Company (NYSE:CC) during the fourth quarter of 2021, with overall stakes worth $566.7 million. This is down from 38 hedge funds in the preceding quarter with $548.9 million worth of stakes in the company.
Investment firm Miller Value Partners talked about The Chemours Company (NYSE:CC) in its Q4 2021 investor letter. Here’s what the fund said:
“The Chemours Co (CC) rose 16.4% over the period after reporting Q3 revenue of $1.68Bn, +36% Y/Y and +4% ahead of consensus driven by 25% volume growth while pricing added +11%. Earnings Before Income, Taxes, Depreciation, and Amortization (EBITDA) of $372M rose +77% and beat estimates by 9% as higher top-line results more than offset incremental cost headwinds. Chemours raised FY21 guidance, including EBITDA of $1.3Bn-$1.34Bn (from $1.1Bn-$1.25Bn), Earnings Per Share (EPS) of $3.93-$4.13 (from $2.84-$3.56), and free cash flow (FCF) of at least $500M (from >$450M). Additionally, Chemours announced the closing of the previously announced sale of the Mining Solutions business for $520M.”
2. Global Payments Inc. (NYSE:GPN)
Greenlight Capital’s Stake Value: $68.4 million
Greenlight Capital’s 13F Portfolio: 3.91%
Number of Hedge Fund Holders: 67
Dividend Yield (as of April 28): 0.69%
Global Payments Inc. (NYSE:GPN) deals in the provision of digital payment technology and solutions around the world. On April 5, analyst Charles Nabhan at research firm Stephens initiated coverage of Global Payments Inc. (NYSE:GPN) with an ‘Overweight’ rating and a $170 price target. He views the stock as a pure-play payment provider boasting a premium growth profile, and expects it to continue outperforming its competitors.
According to regulatory data for the fourth quarter, Greenlight Capital owned 506,000 shares of Global Payments Inc. (NYSE:GPN) at a price tag of $68.4 million. This was a new addition to the fund’s portfolio, and represented 3.91% of overall holdings. In total, 67 hedge funds were bullish on the company shares in the fourth quarter, down from 68 a quarter ago.
In Q4 2021, Global Payments Inc. (NYSE:GPN) reported earnings per share of $2.13, which outperformed estimates by $0.01. The company raked in $1.98 billion in revenue for the quarter ending December, surpassing analysts’ forecasts by $10.50 million and growing 13.27% year-on-year.
Here is what Artisan Partners, an investment firm, had to say about Global Payments Inc. (NYSE:GPN) in its Q4 2021 investor letter:
“Global Payments was another notable drag on Q4 performance. We wouldn’t say the company’s profit cycle has faltered of late—they appear likely to deliver 14%-15% top-line and 27%-28% profit growth this year (vs. -5% and 4% in 2020). Investors may have expected even more growth in early 2021, but stubborn pandemic pressures remain in certain geographies and categories of consumer spending. However, we think most of the stock’s decline has been due to fears about emerging competitive pressures from new payments technology upstarts (discussed in prior letters). Given our belief the company can continue to sustain solid growth in the coming years despite competitive entrants—management is projecting 17%-20% EPS growth in 2022—we view the stock’s deeply discounted multiple as attractive, and we have maintained our position.”
1. Teck Resources Ltd (NYSE:TECK)
Greenlight Capital’s Stake Value: $97.87 million
Greenlight Capital’s 13F Portfolio: 5.59%
Number of Hedge Fund Holders: 25
Dividend Yield (as of April 28): 1.00%
Teck Resources Ltd (NYSE:TECK) is the largest dividend-paying stock holding of David Einhorn’s Greenlight Capital as of the fourth quarter. Einhorn owned 3.39 million shares of the firm at a value of $97.9 million which amounted to 5.59% of the fund’s overall portfolio. Teck Resources Ltd (NYSE:TECK) is a Canadian natural resource company which mines and explores for coal, copper, zinc and other minerals around the world.
On April 20, Raymond James analyst Brian MacArthur raised the firm’s price target on Teck Resources to C$64 from C$58 and maintained an Outperform rating on the company shares. As of April 22, shares of Teck Resources Ltd (NYSE:TECK) have gained 77.34% in the last 12 months, and 33.60% year-to-date.
25 hedge funds reported bullish bets on Teck Resources Ltd (NYSE:TECK) shares in Q4 2021 with aggregate holdings worth $1.62 billion. In contrast, 41 hedge funds were long on the company shares a quarter ago.
EPS for the fourth quarter was recorded at $1.98, which beat estimates by $0.11. Quarterly revenue came in at $3.44 billion for Teck Resources Ltd (NYSE:TECK), which showed an impressive jump of more than 70% year-on-year.
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