We recently published a list of 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman. Since Crescent Capital BDC Inc (NASDAQ:CCAP) ranks 9th in the list, it deserves a deeper look.
Billionaire Leon Cooperman made headlines in April when he predicted during an interview with CNBC that the US is headed for a financial crisis. Cooperman, who calls himself a “capitalist with a heart,” said that the Federal Reserve kept interest rates near zero, but raised them dramatically in a period of 12 months. Still, the 81-year-old billionaire sees no signs that the economy is “restrictive,” as he pointed to stock market highs and speculation. The Omega Family Office chairman and CEO expects “one or two” rate cuts this year. He emphasized that the market remains overvalued.
This isn’t the first time Cooperman warned the market about recession. In February last year, the billionaire said that the market was headed for a recession, and noted that the S&P 500 high of about 4,800 recorded in 2022 could “stand for some time.” In July 2022, while talking to Bloomberg, Cooperman said that he was “shocked” that interest rates were so low.
“I am of the view that equities are the best house in the financial asset in the neighborhood, but I don’t like the neighborhood, for a lot of reasons.”
Cooperman in the Bloomberg interview in 2022 had categorically said that sooner or later the strong dollar, prices of oil and the Fed would “lead us into a recession.” He went on to add that recession would be a “2023 event” and predicted that the market would bottom somewhere near 35% to 45% below its peak of 4800.
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The billionaire had said that he would be “very surprised” if we were to see another bull market anytime soon, given his view that we’ve had one of the biggest bull runs driven by FAANG, SPACs, and speculation. The AI revolution that started in 2023 was indeed a shocker for Cooperman as his recession predictions were proven wrong.
For this article, we scanned billionaire Cooperman’s Q1’2024 portfolio and chose his top 10 dividend stock picks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Leon Cooperman of Omega Advisors
Crescent Capital BDC Inc (NASDAQ:CCAP)
Number of Hedge Fund Investors: 8
Billionaire Leon Cooperman’s Stake: $6,910,507
Crescent Capital BDC Inc (NASDAQ:CCAP) is another high-yield dividend stock pick of billionaire Leon Cooperman in 2024. As of the end of the first quarter of 2024, Omega Advisors reported owning a $6.9 million stake in Crescent Capital BDC Inc (NASDAQ:CCAP).
Last month, Crescent Capital BDC Inc (NASDAQ:CCAP) posted Q1 results and increased its dividend by 2.4%. GAAP EPS in the quarter came in at $0.63, beating estimates by $0.05. Investment income in the period jumped 28.2% year over year to $50.4 million, surpassing estimates by $2.7 million. The company said its net asset value per share increased to $20.28, compared to $20.04 as of the end of 2023. Being a business development company, Crescent Capital BDC Inc (NASDAQ:CCAP) is in a strong position to benefit from rising interest rates, since the company provides debt and equity financing to companies across various industries.
The company talked about its strong portfolio performance during Q1 earnings call
” Overall, our investment portfolio continues to perform well with strong year-over-year weighted average revenue and EBITDA growth. That being said, we have continued to closely monitor the impact of rising borrowing costs on our portfolio companies. The weighted average interest coverage of the companies in our investment portfolio at quarter end improved from 1.7x at year-end to 1.8x as of quarter end. As a reminder, this calculation is based on the latest annualized base rate as of each respective quarter. We also continue to closely monitor how our portfolio companies are managing fixed charges. Our analysis demonstrates that our portfolio companies in the aggregate are well positioned to address fixed charges with operating cash flows and available balance sheet liquidity.” [read the full earnings call transcript here]
Crescent Capital BDC Inc (NASDAQ:CCAP) bulls believe the company’s highly diversified portfolio further protects it from industry headwinds. Its portfolio includes over 180 companies across high-growth industries like software, healthcare, financials and insurance. Analysts also like the company’s consistent de-leveraging of balance sheet. Its debt to equity ratio stands at 1.1, down from 1.23x in Q1. The company has no debts due until 2026.
Overall, Crescent Capital BDC Inc (NASDAQ:CCAP) ranks 9th in Insider Monkey’s list of the 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman. You can visit the 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman to see the other Billionaire Leon Cooperman’s 2024 stocks that are on his radar. While we acknowledge the potential of Crescent Capital BDC Inc (NASDAQ:CCAP) our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Crescent Capital BDC Inc (NASDAQ:CCAP) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
