In this article we discuss the 5 high yield dividend stocks to buy according to Jim Simons. If you want to read our detailed analysis of Simons’ history and hedge fund performance, go directly to the 10 Best High Yield Dividend Stocks to Buy According to Billionaire Jim Simons.
5. Orchid Island Capital, Inc. (NYSE: ORC)
Number of Hedge Fund Holders: 10
Dividend Yield: 14.47%
Orchid Island primarily focuses on mortgage-backed securities (RMBS) with a strategy oriented towards structured agency RMBS and traditional pass-through Agency RMBS. Of the 800 funds tracked by Insider Monkey, 10 reported having stakes in the company at the end of 2020, including D E Shaw, which owns 1.15 million Orchid shares.
- Orchid Island Capital announced a $0.065 per share monthly dividend for April 2021, which aligns with the company’s previously announced dividend. This puts Orchid in the list of the best high yield dividend stocks.
- It has an estimated $0.34 per share GAAP net loss for the March 31 quarter. Its unrealized and net realized loss on derivative instruments and RMBS is $0.60 per share.
- Orchid Island Capital recently announced a public offering through which it plans to sell 8 million shares. It also expects to provide its underwriter with the option to purchase an extra 1.2 million shares. The company will use the proceeds from the sale to expand its Agency RMBS and fund its general corporate activities.
4. Mobile TeleSystems (NYSE: MBT)
Number of Hedge Fund Holders: 13
Dividend Yield: 12.62%
Mobile TeleSystems provides cellular communication services in Eastern European countries, including Turkmenistan, Uzbekistan, Ukraine, and Russia. Its services are available to companies that leverage GSM systems, and the range of services include voice, SMS, and GPRS. The company has 13 hedge funds that own its shares, including Renaissance Technologies, which owns 23.85 million shares in MTS.
- Mobile TeleSystems is Russia’s leading telecommunications provider with 30% market share and a growing subscriber base. The company plans to be the leading 5G provider in the country and has partnered with global industry leaders such as Qualcomm, Ericsson, and Huawei. Mobile TeleSystems reported that its Q4 2020 revenue increased to 133.7 billion rubles representing a 7.4% from the revenue figure reported in the previous quarter. Its operating profit in Q4 was 26.1 billion rubles which represents a 5.2% drop
- Mobile TeleSystems has a 12% dividend yield, making it one of the best high yield dividend stocks on Renaissance Technology’s portfolio. The company plans to sustain its impressive growth through further investments into IT and consumer online services.
- The company’s mobile service revenue in Russia increased by 6.4% in Q4 despite the challenging economic times caused by the pandemic and a decline in international roaming. The number of active mobile subscribers on the MTS network grew by 230,000 subscribers in Q3.
3. Antero Midstream Corporation (NYSE: AM)
Number of Hedge Fund Holders: 19
Dividend Yield: 10.02%
Antero Midstream deals with midstream energy asset development and operation. Some of its products and services include clearwater facilities, water distribution, pipeline safety, and fractionation services. The company attracted 19 hedge funds, including Renaissance Technologies. Brave Warrior Capital had the highest stake out of all the hedge funds at just over 5.3 million shares.
The company announced in April 2021 that specific members of its management team would take up new responsibilities after Glen C. Warren, Jr’s exit from his positions as director, president, and Chief Financial Officer on April 30. Paul M. Rady, the current CEO and chairman of Antero Resources and Antero Midstream, will become the new president of the two companies.
Michael N. Kennedy, Antero Resource’s current Senior Vice President and Antero Midstream’s Chief Financial Officer, will be appointed as Antero Resource’s new CFO. He will also join the board of directors at Antero Midstream.
Antero announced a Q1 2021 dividend of $0.225 per share, representing a 26.8% decline from the Q4 2020 dividend of $0.3075. This reflects the company’s plans to slash its annual dividend to around $0.90 per share.
Antero Midstream share price experienced a sharp decline after Goldman Sachs analysts downgraded it from a “neutral” to a “sell” with a price target of $7.50. The firm cited valuation concerns for the downgraded. Goldman Sachs still believes that Antero Midstream has a favorable macro environment, especially as investors start to focus on midstream companies that offer better asset quality.
Bonhoeffer Capital Management, in their Q4 2020 investor letter, stated that, as natural gas prices are rebounding, Antero Midstream Corporation (NYSE: AM)’s cash flows become more secured. Here is what Bonhoeffer Capital Management has to say about Antero Midstream Corporation in their Q4 2020 investor letter:
“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%.”
2. Magal Security Systems Ltd. (NASDAQ: MAGS)
Number of Hedge Fund Holders: 2
Dividend Yield: 5%
Magal Security Systems is an international company that provides a range of turnkey solutions such as intelligence gathering, site management, security, and safety. Its products and services are designed for general, outdoor, and security perimeter application. Some of its products can be integrated and managed through control and command software with support for real-time decision-making and action. Some of its solutions include virtual gates, fence-mounted detectors, and detection systems that can be concealed. Magal Security Systems has so far installed its solutions in 75 countries across the world. It also seems to be heavily focused on growth, courtesy of its acquisition of WebSilicon Ltd in 2013.
The security systems company attracted two hedge fund investors, namely Renaissance Technologies, which bought 765,008 shares, and Citadel Investment Group, which acquired 31,759 shares.
- Magal Security announced in February 2021 that it signed an asset purchase agreement with Aeronautics Ltd. The deal will facilitate the sale of Magal’s Integration Solutions business for roughly $35 million.
- Magal became the majority shareholder of Israeli company BAZ after acquiring 55% of its shares in 2018. BAZ makes military-grade surveillance and smart security video systems. Magal also exercised its options to buy the remaining shares in the Israeli company from Benny Zviran, its general manager. BAZ managed to hit financial and commercial targets as per Magal Security’s guidelines, and it also managed to hit record revenues in 2020.
1.Xinyuan Real Estate Co., Ltd. (NYSE: XIN)
Number of Hedge Fund Holders: 4
Dividend Yield: 40%
Xinyuan Real Estate develops and manages real estate, especially in the Chinese market, although it has also been expanding into other markets. It has large-scale real estate projects in major cities, including Foshan, Zhuhai, Dalian, Suzhou, Xi’an, Chengdu, Qingd, Jinan, Zhengzhou, Tianjin, Shanghai, and Beijing. Xinyuan also operates in the U.S and was one of the first Chinese real estate companies to penetrate the North American market, mainly in New York. The Chinese company aims to cater to the real estate needs of the middleclass.
Xinyuan recently announced that it finalized the offering of its 14.0% senior notes worth $170 million. The notes will expire on January 25, 2024. The company recently announced a collaboration with Sino-Ocean Group to develop some land that was recently acquired Zhengzhou. It is the first partnership between the two companies. Xinyuan also announced that Mr. Haifei He was appointed to its Board of Directors, as well as the board’s investment committee.
The appointment follows Mr. Shangrong’ resignation from his director position and the investment committee. Ms. Wendy also gave up her director position and stepped down from her position as an audit committee member.
Renaissance Technologies is Xinyuan Real Estate’s largest hedge fund shareholder. The real estate company’s performance in the last year was 6.67% growth, pushing it up the ranks as one of the best high yield dividend stocks, according to Renaissance Technologies.
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