In this article, we discuss the 10 best dividend stocks according to Bill Miller’s Miller Value Partners. If you want to read our detailed analysis of the hedge fund’s past performance and investment strategies, go directly to read 10 Best Dividend Stocks According to Bill Miller’s Miller Value Partners.
5. OneMain Holdings, Inc. (NYSE:OMF)
Number of Hedge Fund Holders: 44
Miller Value Partners’ Stake Value: $78,762,000
Dividend Yield as of February 27: 7.41%
The number of hedge funds tracked by Insider Monkey holding positions in OneMain Holdings, Inc. (NYSE:OMF) stood at 44 in Q4, with stakes valued at over $1 billion. In comparison, 41 hedge funds held stakes in the American financial services holding company in the previous quarter.
On February 2, OneMain Holdings, Inc. (NYSE:OMF) announced a quarterly dividend of $0.95 per share, growing it by 35%. The stock’s current dividend yield stood at 7.41%, as of February 27. This January, JPMorgan set a $56 price target on OneMain Holdings, Inc. (NYSE:OMF), while maintaining an Overweight rating on the shares.
In Q4 2021, Miller Value Partners held over 1.5 million shares in OneMain Holdings, Inc. (NYSE:OMF), valued at nearly $78.8 million. The company represented 2.15% of the hedge fund’s 13F portfolio.
Miller Value Partners mentioned OneMain Holdings, Inc. (NYSE:OMF) in its Q4 2021 investor letter. Here is what the firm has to say:
“OneMain Holdings (OMF) dropped 8.4% over the period. The company reported Q3 EPS of $2.37, +9% Y/Y and ahead of consensus of $2.30 driven by interest income of $1.1Bn and a portfolio yield of 23.77%. Originations of $3.9Bn rose +34% Y/Y, driving end of period receivables to $18.9Bn while net charge-offs of 3.5% improved 167bps. Management maintained FY21 strategic priorities, including managed receivables growth of 8%-10%, a stable yield (>24%), and net charge-offs of 4.2%. Additionally, the company repurchased $100M of stock as part of Apollo Global Management’s 10.01M secondary offering while also increasing their current buyback authorization to $300M (from $200M).”
4. Alliance Resource Partners, L.P. (NASDAQ:ARLP)
Number of Hedge Fund Holders: 5
Miller Value Partners’ Stake Value: $7,593,000
Dividend Yield as of February 27: 7.65%
Alliance Resource Partners, L.P. (NASDAQ:ARLP) is an American natural resource company that distributes steam coal to major utilities and industrial companies in the country. In Q4 2021, Miller Value Partners increased its stake in the company significantly by 85%, equaling roughly $7.6 million. Alliance Resource Partners, L.P. (NASDAQ:ARLP) accounted for 0.2% of Bill Miller’s portfolio.
By the end of Q4 2021, 5 hedge funds tracked by Insider Monkey held a roughly $80 million worth of stake in Alliance Resource Partners, L.P. (NASDAQ:ARLP). In the previous quarter, 6 hedge funds held stakes in the company, valued at over $72.5 million.
On January 28, Alliance Resource Partners, L.P. (NASDAQ:ARLP) increased its quarterly dividend by 25% at $0.25 per share. The stock’s dividend yield stood at 7.65%, as recorded on February 27. Alliance Resource Partners, L.P. (NASDAQ:ARLP) delivered a 114.2% return to shareholders in the past year, as of the market close of February 27.
3. Chimera Investment Corporation (NYSE:CIM)
Number of Hedge Fund Holders: 18
Miller Value Partners’ Stake Value: $8,466,000
Dividend Yield as of February 27: 10.79%
This January, Barclays asserted that the housing market is expected to grow well after the pandemic, generating solid fundamentals for consumer finance. Given this, the firm lifted its price target on Chimera Investment Corporation (NYSE:CIM) to $14, with an Underweight rating on the shares.
In the second quarter of 2020, Chimera Investment Corporation (NYSE:CIM) cut its dividend by 40% due to the pandemic. However, in 2021, the company raised its quarterly dividend by 10% at $0.33 per share. The stock’s dividend yield, as recorded on February 27, stood at 10.79%. In Q4 2021, Miller Value Partners held a stake worth roughly $8.5 million in Chimera Investment Corporation (NYSE:CIM). The company made up 0.23% of Bill Miller’s portfolio.
By the end of Q4 2021, 18 hedge funds tracked by Insider Monkey held stakes in Chimera Investment Corporation (NYSE:CIM), up from 16 in the previous quarter. The total value of these stakes is over $183.3 million.
2. MFA Financial, Inc. (NYSE:MFA)
Number of Hedge Fund Holders: 15
Miller Value Partners’ Stake Value: $3,529,000
Dividend Yield as of February 27: 10.81%
MFA Financial, Inc. (NYSE:MFA), an American real estate investment trust, cut its dividend in 2014 but the management has sustained dividend payments over the years. Currently, the company pays a quarterly dividend of $0.11 per share, increasing it by 10% in December 2021. The stock’s dividend yield was recorded at 10.81%, as of February 27. MFA Financial, Inc. (NYSE:MFA) has been paying dividends to shareholders for the past 22 years.
Appreciating the company’s strong Q3 results, in December, Raymond James upgraded MFA Financial, Inc. (NYSE:MFA) to Outperform, while maintaining a $5.25 price target on the stock. In Q4 2021, Miller Value Partners did not change its position in MFA Financial, Inc. (NYSE:MFA) and held a stake worth over $3.5 million. The company accounted for 0.09% of Bill Miller’s portfolio.
In Q4 2021, Arrowstreet Capital was the largest shareholder of MFA Financial, Inc. (NYSE:MFA), holding a stake worth $42.1 million. Overall, 15 hedge funds tracked by Insider Monkey were bullish on the company in Q4, down from 17 in the previous quarter. The total worth of these stakes is nearly $149 million.
1. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 25
Miller Value Partners’ Stake Value: $10,164,000
Dividend Yield as of February 27: 15.16%
In Q4 2021, Miller Value Partners increased its stake in Vale S.A. (NYSE:VALE) by 16%, which represented 0.27% of the fund’s 13F portfolio. The hedge fund held a stake worth over $10 million in the Brazilian mining company.
The number of hedge funds tracked by Insider Monkey holding stakes in Vale S.A. (NYSE:VALE) fell to 25 in Q4, from 27 in the previous quarter. The total value of these stakes is over $1.7 billion.
On February 25, Vale S.A. (NYSE:VALE) announced an interim dividend of $0.73 per share. In addition to this, the company pays a semi-annual dividend of $1.542 per share, which yields 15.16%, as of February 27. The company’s 3-year dividend CAGR stands at 136.7%. In February, BNP Paribas upgraded Vale S.A. (NYSE:VALE) to Outperform, with a $20.50 price target.
Miller Value Partners mentioned Vale S.A. (NYSE:VALE) in its Q3 2021 investor letter. Here is what the firm has to say:
“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”
You can also take a look at 15 Best Stocks To Buy Now For Beginner Investors and 10 Best Mortgage Stocks To Buy Now
