In this article we discuss Viking Global’s top 5 best dividend stock picks. If you want to read our Viking Global head Andreas Halvorsen’s history and performance, go directly to 10 Best Dividend Stocks to Buy According to Billionaire Andreas Halvorsen.
Ole Andreas Halvorsen of Viking Global
5. UnitedHealth Group Incorporated (NYSE: UNH)
Viking’s stake in UNH consists of 2793665 shares, making it the 9th largest hedge fund shareholder out of the 91 hedge funds invested in the stock. Lone Pine Capital is among the largest shareholders in the stock, with more than 3.2 million shares even after reducing its stake by 20%. UNH has a dividend yield of 1.28%.
There was a notable increase in the number of long positions on UNH held by hedge funds in Q4 2020. 91 hedge funds had a stake in the company during the quarter, which is slightly higher than 89 funds in the previous quarter. Eagle Capital Management is UNH’s largest hedge fund investor with 3.39 million shares valued at roughly $1.2 billion.
Bretton Fund released the following statement about UMH in an investor letter:
“There may be no better example of the strangeness of our healthcare system than the performance of the largest health insurer in the middle of a pandemic that has killed 400,000 Americans. UnitedHealth’s earnings increased 12%, from $15.11/share to $16.88/share, as foregone medical care more than outweighed the costs of coronavirus treatment. Meanwhile, after a year that began with the two major political parties offering vastly different views of the healthcare landscape, from eliminating private health insurance to eliminating Medicaid, we elected a divided government with other priorities and a general tendency to make only marginal changes to the existing ecosystem. UnitedHealth returned 27.1% during our partial year of ownership, and we expect it to have a strong 2021 as employers resume hiring and Medicare Advantage continues to grow in popularity.”
4. Las Vegas Sands Corp. (NYSE: LVS)
Viking’s stake in the company as of Q4 2020 was 2.83 million shares, with the stock’s dividend yield at 5.18%. Las Vegas Sands Corp. had 63 hedge fund investors by the end of 2020, a notable increase from 47 hedge funds in the previous quarter.
Jefferies analyst David Katz recently pointed out that analysts and investors have taken a conservative approach to Las Vegas Sands amid uncertainty around the recovery period. The conservative pick was largely associated with the company’s robust balance sheet after selling its Vegas sale, as well as the phasing out of Sands China to pave way for The Londoner.
Some of the top hedge funds that have a stake in the company include Melvin Capital Management, at 10.56 million shares and D1 Capital Partners, which owns 5.34 million LVS shares. Las Vegas Sands Corp. is one of the largest gaming and casino operators in the U.S. It is also one of the most attractive stocks in terms of dividend yield, thus earning a spot in Andreas Halvorsen’s 10 best dividend stock picks list.
3. Air Products & Chemicals, Inc. (NYSE: APD)
Viking Global acquired 636,600 shares of Air Products & chemicals inc. in the last quarter. It is one of the 50 hedge funds that owned the stock in Q4 2020. Millennium Management is the largest hedge fund shareholder with 762,666 shares, followed by Viking. The stock has a dividend yield of 2.09%.
Air Products & chemicals inc. is a Pennsylvania-based company that makes industrial gas projects. The company also runs some of the projects through which it makes syngas from natural resources to produce chemicals, fuels, and high-value power.
Air Products scooped up the remaining 50% of the gasification project pursued in collaboration with China Energy Group. The company previously acquired the first half of the shares in the joint venture after it was acquired from General Electric in 2019.
2. Everest Re Group Ltd (NYSE: RE)
Andreas Halvorsen’s Viking owned 199505 shares of Everest Re Group in Q4 2020. The stock has a 2.37% dividend yield. 29 hedge funds had a stake in the company during the quarter, a decline compared to 36 hedge funds in Q3 2020.
Phil Stefano, an analyst at Deutsche Bank, upgraded his rating on Everest Re Group from a hold to a buy. He believes that the company’s previous forecast models were too conservative and acknowledged that the current management’s activities support the changing sentient. Stefano also believes that the latest earnings uncertainties are factored into investor models.
Viking Global’s shareholding in Everest makes it the third-largest hedge fund shareholder. The leading hedge funds in the stock are AQR Capital Management, which has 605,632 shares, Everest shares in its portfolio, and Southeastern Asset Management at 403,537 shares.
Everest is one of the top insurance and reinsurance companies in the world. It is one of the most innovative companies in the segments with an impressive balance sheet and robust product and distribution capacity. Everest relies on strong capital and risk management strategies and underwriting excellence to generate long-term value.
1. AvalonBay Communities Inc. (NYSE: AVB)
Viking owns 1.21 million shares shares of AvalonBay Communities after lowering its stake by 53% in Q4 2020. The company has a 3.35% dividend yield. In Q4 2020, 32 hedge funds out of 887 had a stake in the company, higher than the 29 in the previous quarter. Deutsche Bank analyst Derek Johnston downgraded AvalonBay Communities to a “sell’’ courtesy of the increased uncertainty, affected earning capacity and inflated valuations. He believes that it might take between two to four years for the REIT to recover to 2019 operating level of operations.
AvalonBay is a real estate company whose headquarters are in Virginia. It has almost 80,000 apartment units located in multiple areas, including California, Seattle, New York, and Washington D.C. The company has been around since 1988 and was formed through a merger between Bay Apartment Communities Inc. and Avalon Properties Inc.
Long Pond Capital is AvalonBay’s largest hedge fund shareholder with 1.73 million shares, followed by Viking Global.
You can also take a peek at 10 Best Dividend Stocks According to George Soros and 10 Best Software Stocks To Buy According To Billionaire Chase Coleman.
