In this article, we discuss the 5 best dividend stocks to buy according to Mason Hawkins’ Southeastern Asset Management. If you want to read our detailed analysis of Hawkins’ history and hedge fund performance, go directly to the 10 Best Dividend Stocks to Buy According to Mason Hawkins’ Southeastern Asset Management.
5. Everest Re Group, Ltd. (NYSE: RE)
Hawkins’ Stake Value: $99,422,000
Percentage of Mason Hawkins’ 13F Portfolio: 2.12%
Dividend Yield: 2.52%
Number of Hedge Fund Holders: 32
Everest Re Group, Ltd. (NYSE: RE) provides reinsurance and insurance products globally. The company was founded in 1973 and is placed fifth on the list of 10 best dividend stocks to buy according to Mason Hawkins’ Southeastern Asset Management. Everest currently has a $10.13 billion market capitalization and was able to deliver a 27.06% return in the past 12 months.
On April 28, Everest Re Group, Ltd. (NYSE: RE) posted earnings for the first quarter of 2021. The company reported earnings per share of $6.49, beating market predictions by $1.96. Everest Re quarterly revenue was $2.74 billion, up 38.4% YoY, beating the estimates by $290 million. The company has a good dividend track report and has consistently declared dividends for the last 10 years. On May 13, Everest declared a quarterly dividend of $1.55 per share.
Southeastern Asset Management holds 401,202 shares in the firm worth $99.42 million. This represents 2.12% of their portfolio. In the first quarter of 2021, 32 hedge funds in the database of Insider Monkey held stakes worth $520.80 million in Everest Re Group, up from 29 the preceding quarter worth $475.25 million.
Miller/Howard Investments, in their first quarter 2021 investor letter, mentioned Everest Re Group, Ltd. (NYSE: RE). Here is what the fund said:
“We bought two new financials this quarter (including), Everest Re (RE). Both were selling at a discount to book value and should benefit from the improving economy, in our opinion.”
4. Douglas Emmett, Inc. (NYSE: DEI)
Hawkins’ Stake Value: $125,422,000
Percentage of Mason Hawkins’ 13F Portfolio: 2.68%
Dividend Yield: 3.2%
Number of Hedge Fund Holders: 14
Douglas Emmett, Inc. (NYSE: DEI) is a self-managed real estate investment trust. The company was founded in 1971 and is ranked fourth on the list of 10 best dividend stocks to buy according to Mason Hawkins’ Southeastern Asset Management. Douglas shares have gained about 15.10% in value over the last 12 months.
On June 3, Mizuho Securities analyst Omotayo Okusanya upgraded Douglas Emmett Inc. (NYSE: DEI) from “Neutral” to “Buy” with a price target of $40.00. On May 27, the company declared its quarterly dividend of $0.28 per share, in line with the previous. On May 4, the company declared its funds from operations (FFO) for the first quarter of 2021. It posted funds from operations (FFO) of $0.44, beating the market predictions by $0.02.
Southeastern Asset Management holds 3.99 million shares in the company worth $125.42 million, representing 2.68% of their portfolio. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm First Eagle Investment Management is a leading shareholder in Douglas Emmett, Inc. (NYSE: DEI) with 6.91 million shares worth $216.98 million.
Baron Partners Fund, in its third quarter 2020 investor letter, mentioned Douglas Emmett. Here is what Baron Partners Fund has to say about Douglas Emmett in its letter:
“Douglas Emmett, Inc. is a REIT with a portfolio of office and apartment properties located in west Los Angeles and Hawaii. The stock fell on investor concerns that a portion of tenants would be unable to pay rent in a timely manner (in some instances as a result of new municipal laws). We retain conviction owing to Douglas Emmett’s irreplaceable portfolio, attractive sub-markets, and low debt levels.”
3. Lazard Ltd (NYSE: LAZ)
Hawkins’ Stake Value: $206,587,000
Percentage of Mason Hawkins’ 13F Portfolio: 4.41%
Dividend Yield: 4.22%
Number of Hedge Fund Holders: 19
Lazard Ltd (NYSE: LAZ) functions as a financial counselor and fund management firm. The company was incorporated in 1848 and is placed third on the list of 10 best dividend stocks to buy according to Mason Hawkins’ Southeastern Asset Management. Lazard stock has offered investors returns of 68.93% over the course of the past twelve months.
On April 7, Manan Gosalia, an analyst at Morgan Stanley, initiated coverage on Lazard Ltd (NYSE: LAZ), rating the stock as “Overweight,” with a price target of $61.00. On April 29, Lazard declared a quarterly dividend of $0.47 per share, in line with the previous. The forward yield is 4.22%. On June 10, Lazard announced its May preliminary AUM of ~$278.6 billion, which was 1.5% more than its prior month’s preliminary AUM of $274.4 billion.
Southeastern Asset Management holds 4.75 million shares of the company worth $206.59 million. Ariel Investments is the company’s most significant stakeholder, with 6.95 million shares worth $302.35 million.
Third Avenue Management, in their fourth quarter 2020 investor letter, mentioned Lazard Ltd (NYSE: LAZ). Here is what the fund said:
“Lazard Ltd. (“Lazard”) – During the quarter, the Fund initiated a position in Lazard, which houses two distinct businesses – financial advisory and asset management. Lazard is one of the formidable competitors in the global financial advisory industry, though Lazard is not involved in investment banking lines of business which are balance sheet-intensive or those which take on credit risk. Lazard’s advisory business is the world’s fifth largest by revenues, putting the company’s advisory business on par with those of far larger companies, such as Bank of America and Citi. Meanwhile, Lazard’s advisory revenues are meaningfully larger than the likes of Credit Suisse and UBS. While advisory revenues represent a low single-digit percentage of revenues for those peers, the figure is slightly more than 50% for Lazard. One further point of attraction for Lazard’s advisory business is its sterling reputation in restructuring advisory, which often shines in challenging environments in which insolvencies and near-insolvencies rise. The remaining portion of Lazard’s revenue is derived from the company’s asset management business, which operates completely independent of the advisory business and at last report had approximately $248 billion of assets under management. Lazard’s assets under management are focused on several niches in active management commanding management fees at the higher end of the industry, and the performance of its strategies has been sufficiently strong to have generated inflows of late, an unusual accomplishment for an active manager. The company in total is very well-capitalized and has a long history of controlling the relationship between compensation, its primary expense, and revenue. We believe that our purchase price implies a modest multiple of current operating earnings and that the operating environment can certainly improve, most likely as M&A activity continues to accelerate, but from other sources as well. External to the company however, it is clear that there are a number of companies that would almost certainly be very eager to purchase one or both of Lazard’s businesses. Consolidation is rampant in the asset management industry and several purchases of asset management companies of similar size to Lazard, though arguably of lower quality, have been announced recently. Separately, several European investment banks, including ones named earlier in this paragraph, have publicly declared a desire to grow their advisory businesses, especially in cross-border M&A capabilities, which is a core competency within Lazard. Using conservative estimates of prices we believe could be realized in the sale of Lazard’s businesses, the current share price appears to meaningfully undervalue the company.”
2. The Williams Companies, Inc. (NYSE: WMB)
Hawkins’ Stake Value: $195,703,000
Percentage of Mason Hawkins’ 13F Portfolio: 4.18%
Dividend Yield: 6.14%
Number of Hedge Fund Holders: 34
The Williams Companies, Inc. (NYSE: WMB) is an American energy infrastructure company. The company was incorporated in 1908 and is ranked second on the list of 10 best dividend stocks to buy according to Mason Hawkins’ Southeastern Asset Management. The Williams Companies Capital currently has a $32.52 billion market capitalization and was able to deliver a 44.68% returns in the past 12 months.
The Williams Companies has also paid consistent dividends since 1989. On April 27, the company declared its quarterly dividend of $0.41 per share. On May 3, The Williams Companies, Inc. (NYSE: WMB) announced its earnings per share for the first quarter of 2021. It reported earnings per share of $0.35, beating market predictions by $0.06. The revenue for the first three months of 2021 was $2.61 billion, up 36.6% YoY, beating the estimates by $640 million. On June 16, Williams announced an export agreement with Beacon Offshore Energy Development LLC. Under the agreement The Williams Companies, Inc. (NYSE: WMB) will provide overseas natural gas collection and onshore natural gas developing services to Shenandoah.
The hedge fund chaired by Mason Hawkins holds 8.26 million shares in the company worth over $195.70 million. Southeastern Asset Management is the biggest stakeholder in The Williams Companies.
ClearBridge Investments, in its first quarter 2021 investor letter, mentioned The Williams Companies, Inc. (NYSE: WMB). Here is what the Fund has to say about The Williams in its letter:
“U.S. energy infrastructure company Williams Companies also performed well. Williams owns and operates natural gas pipelines and associated midstream assets in the U.S. Shares continued to rebound driven by the strong cyclical recovery, which has benefited energy stocks. Williams also delivered resilient fourth-quarter earnings despite energy demand pressure from COVID-19.”
1. Lumen Technologies, Inc. (NYSE: LUMN)
Hawkins’ Stake Value: $829,222,000
Percentage of Mason Hawkins’ 13F Portfolio: 17.73%
Dividend Yield: 7.25%
Number of Hedge Fund Holders: 32
Lumen Technologies, Inc. (NYSE: LUMN) is an American technology and communications company. The company was founded in 1968 and is placed first on the list of 10 best dividend stocks to buy according to Mason Hawkins’ Southeastern Asset Management. Lumen stock has returned 47.74% to investors during the course of the past twelve months.
Lumen Technologies, Inc. (NYSE: LUMN) is a good option for dividend investors, as it has been paying a dividend since 2001. On May 20, the company declared a quarterly dividend of $0.25 per share, in line with the previous. The forward yield is 7.17%. On May 11, Lumen bagged U.S. Navy JAG connectivity $50 billion contract for a period of 12-years. Under this contract, the company will provide secured high-speed connectivity, WiFi and unified communications to the U.S. Navy Judge Advocate General Corps. On May 5, Lumen Technologies posted earnings for the first quarter of 2021. It reported earnings per share of $0.44, beating market predictions by $0.03.
The stock is a new arrival on Mason Hawkins’ portfolio, as his hedge fund bought about 62.11 million shares of the company, worth $829.22 million. In the first quarter of 2021, 32 hedge funds in Insider Monkey’s database of 887 funds held stakes in Lumen Technologies, Inc. (NYSE: LUMN), compared to 29 funds in the fourth quarter of 2020.
In its first quarter 2021 Investor letter, Longleaf Partners Fund highlighted a few stocks, and Lumen Technologies Inc. was one of them. Here is what the fund said:
“Lumen (40%, 3.33%), the global fiber company, was the top contributor. While COVID fallout still weighed on fourth quarter results, the company benefitted from positive business mix improvements. Early in the quarter, Lumen appreciated 38% in a few short days amidst the “Game Stop / Reddit” short cover phenomenon. After this shortterm bounce, Lumen’s stock price appreciated more steadily over the last six weeks of the quarter with improved results. Many of last year’s worst-case fears have not materialized and the outlook is improving for the core business. We continue to believe that the company has multiple ways within its control to both grow and realize value per share, and we have a 13D filed to allow us to discuss these options with the company. Lumen’s board, which includes Southeastern-nominated Chairman Mike Glenn from FedEx and Director Hal Jones from Graham Holdings, is doing good work to realize Lumen’s hidden value and return the business to FCF/share growth. Despite its appreciation, the stock trades at less than half of our appraisal.”
You can also take a peek at 14 Best European Dividend Stocks To Buy and 15 Very High Yield Dividend Stocks Worth Checking Out.
