5 Best Dividend Stocks to Buy and Hold Now According to Tiger Cub Lee Ainslie

1. Antero Midstream Corporation (NYSE: AM)

Ainslie’s Stake Value: $952,000
Percentage of Lee Ainslie’s 13F Portfolio: 0.001%
Dividend Yield: 8.7%
Number of Hedge Fund Holders: 17

Antero Midstream Corporation (NYSE: AM) possesses, works, and expands midstream energy infrastructure. The company was incorporated in 2013 and tops the list of best dividend stocks to buy and hold according to Tiger Cub Lee Ainslie. Antero Midstream stock has returned more than 80.55% to investors over the course of the past twelve months.

Antero Midstream Corporation (NYSE: AM) is among the best stocks in the Maverick Capital portfolio that pays a healthy dividend to shareholders. On April 14, the company declared its Q1 2021 dividend of $0.225 per share, in line with the previous. The forward yield is 8.78%.

Lee Ainslie’s Maverick Capital increased its hold in Antero Midstream Corporation (NYSE: AM) by 281% in the first quarter, ending the period with 105,472 shares of the company worth $952,000. 

In its fourth quarter 2020 investor letter, Bonhoeffer Capital Management, a value-oriented investment management firm, highlighted a few stocks, and Antero Midstream Corporation was one of them. Here is what the fund said:

“Public LBOs (32% of Portfolio; Quarterly Average Performance +25%)

This includes our broadcast TV franchises, leasing and roll-on/roll-off (RORO) shipping, and our natural gas pipeline firm. One trend in these levered firms is the increasing spread between bond yields and the firms’ free cash flow yield.

An example is Antero Midstream, whose FCF yield was 15% as of December 31, 2020, with a debt yield of 6% with the bond/equity FCF spread of 9%. This is a large spread given that Antero Midstream has completed its backbone infrastructure and gathering investment and capital expenditures should be small going forward. With natural gas prices rebounding, Antero Midstream cash flows become more secured as Antero Resources has more cash flow cushion in making payments to Antero Midstream. The recovery in natural gas prices is expected to continue as the economy opens up and low oil prices have shut down Permian oil wells that were generating almost-free associated natural gas. Antero Midstream’s FCF yield of 15% is also higher than similarly secured Antero subordinated debt with a yield of 7.8%.”

You can also take a peek at 10 Extreme Dividend Stocks with Huge Upside and 14 Best European Dividend Stocks To Buy. 

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