Billionaire and philanthropist Georoge Soros was born in Hungury in 1930, lived through Nazi occupation, and made his fortune on Wall Street through his hedge fund Soros Fund. Soros has become one of the richest investors in history and a billionaire many times over due to his investing approach. Given that the government requires big institutions to report some of their holdings every quarter, we get to see some of his hedge funds’ moves. Let’s take a look at some dividend stocks that Soros added to his portfolio.
Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Verizon Communications Inc. (NYSE:VZ)
Soros established a new position of 612,315 shares in Verizon in the fourth quarter, worth over $34.4 million at the time. Although it didn’t buy a content company like AT&T did and thus doesn’t have as much exposure to the streaming content trend, Verizon shares have nevertheless done well, rallying 4.48% year to date. The stock pays its investors a dividend of around 4.1% at current prices, making it one of the more high yielding stocks in Soros’ portfolio. Verizon could also potentially benefit from 5G once it comes out.
Philip Morris International Inc. (NYSE:PM)
Soros Fund added 590,000 shares of Philip Morris International worth over $39 million in Q4. Shares of the cigarette company have done very well in 2019, rallying 28% year to date. Shares still yield 5.3% around current prices and trade for around 14.8 times forward earnings estimates. Some investors remain concerned about the vaping trend, which somewhat takes business away from cigarette makers. Bulls think that there is room for both to coexist.
Conagra Brands, Inc. (NYSE:CAG)
Although it’s not a particularly high yielding dividend stock like some other names in Soros’ portfolio, Congra Brands is nevertheless a dividend stock, with shares yielding around 2.86% at current prices. Soros Fund also added a new position of 1.125 million shares in the fourth quarter. In terms of analyst commentary, Ken Goldman of JPMorgan sees upside, setting a $34 price target and writing that Conagra Brands’ long term sales guidance seem beatable.
Suncor Energy Inc. (NYSE:SU)
Soros Fund added a new stake of 225,000 shares in Q4, giving Soros Fund a stock with a yield of around 3.77% at current prices in its portfolio. Soros Fund wasn’t the only savvy name that added the dividend name. Warren Buffett’s Berkshire Hathaway also took a stake in Suncor Energy worth around 10.8 million shares and accounting for around 0.7% of Suncor’s total outstanding shares at the end of Q4. Suncor is Canada’s Exxon, its biggest oil and gas name, diversified and integrated.
ONEOK, Inc. (NYSE:OKE)
Soros Fund added a new stake of 200,000 shares worth in Q4 of OKE. The gas pipeline company yields slightly under 4.9% at current prices and shares have done very well, rallying over 30% year to date. Earlier in the year, Oneok raised its quarterly dividend by 0.5 cents per share to 86 cents per share, making its quarterly dividend around 12% higher than what it was in January 2018.
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