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10 Best Dividend Stocks to Buy According to Tiger Cub Rob Citrone

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·12 min read
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In this article, we will be discussing the 10 best dividend stocks to buy according to Tiger Cub Rob Citrone. You can skip our detailed analysis of Citrone's hedge fund returns, investment philosophy, and history, and go directly to the 5 Best Dividend Stocks to Buy According to Tiger Cub Rob Citrone.

Rob Citrone is an American hedge fund manager and the co-founder of Discovery Capital Management, which is one of the Tiger Cub hedge funds. Citrone graduated from Hampden-Sydney College with a bachelor's degree, and from the Darden School of Business with an MBA. In 1990, he began working as a corporate bond analyst at Fidelity Investments, resigning from there shortly thereafter in 1995 to join Tiger Management and work under the hedge fund legend, Julian Robertson. In 1999, Citrone founded Discovery Capital Management.

Discovery Capital Management is a hedge fund focusing on liquidity, valuation multiples, and past and potential growth in its investment strategy. The fund's portfolio mostly focuses on the technology, services, basic materials, and financial services sectors. Discovery Capital Management is known for making macro bets and investing in emerging markets. In 2013, Citrone's Discovery Global Opportunity Partners fund returned 27.5%, and Discovery Capital's annualized returns since 1999 value at 17%.

In January 2021, when retail investors dealt a huge blow to hedge funds amid the GameStop saga, Rob Citrone's fund managed to gain 6.5%. Data from Institutional Investor suggest that Citrone’s fund gained a whopping 55% in 2020.

Discovery Capital's portfolio value stands at $746 million and still is almost entirely made of up the services, technology, basic materials, and financial sectors, alongside healthcare. In 2020, cash and other net assets only made up 19% of the fund's portfolio. Discovery Capital Management has holdings in stocks like Microchip Technology Incorporated (NASDAQ: MCHP), ViacomCBS Inc. (NASDAQ: VIAC), and Intel Corporation (NASDAQ: INTC), which are also some of the best dividend stocks to invest in currently.

Some other notable Q1 holdings of Citrone include Facebook, Inc. Common Stock (NASDAQ: FB), Uber Technologies Inc (NYSE: UBER) and Micron Technology, Inc. (NASDAQ: MU). Facebook, Inc. Common Stock (NASDAQ: FB) was the new addition in Discovery’s Q1 portfolio, as the hedge fund bought 44,438 shares of the company, worth $13.1 million. Facebook, Inc. Common Stock (NASDAQ: FB) stock has gained 22% year to date. Rob Citrone’s fund also initiated a position in ride-sharing platform company Uber Technologies Inc (NYSE: UBER) in the first quarter of 2021, ending the period with 218,886 shares of the company, worth $12 million. Uber Technologies Inc (NYSE: UBER) shares have gained 52% over the last 12 months. In Micron Technology, Inc. (NASDAQ: MU), Discovery Capital increased its hold by a whopping 98% in the first quarter, concluding the period with 111,668 shares of the company, worth $9.9 million. Micron Technology, Inc. (NASDAQ: MU) is up 50% in the last 12 months.

While dividend investing can lead to undiversified portfolios opening up more risks for investors involved, it is a foolproof and tried and tested method of establishing a passive income stream for yourself. Citrone's own portfolio has managed to remain diversified despite having numerous dividend stocks listed in it, showing how dividend investors should aim to design their own portfolios to ensure they're a healthy mix of dividend-yielding and non-dividend-yielding stocks. At the same time, it's necessary to be able to differentiate between dividend stocks likely to consistently pay out dividends without risk of financial collapse, and others that are on the brink of falling over.

For instance, Intel Corporation (NASDAQ: INTC), which is a dividend stock on Citrone's portfolio, is an excellent example of a strong dividend stock. The company has a track record for raising its dividend annually and has done for a whole decade without a break.

10 Best Dividend Stocks to Buy According to Tiger Cub Rob Citrone
10 Best Dividend Stocks to Buy According to Tiger Cub Rob Citrone

Citrone is an exception in an industry reeling from losses. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

With that context in mind, we have written this article on the 10 best dividend stocks to buy according to Tiger Cub Rob Citrone. The stocks mentioned in this article are selected from Citrone's 13F holdings of the first quarter based on their past growth, potential growth, and dividend yields. They are ranked only based on the last factor, from lowest dividend yield to highest dividend yield.

Let's now discuss the 10 best dividend stocks to buy according to Tiger Cub Rob Citrone.

Best Dividend Stocks to Buy According to Tiger Cub Rob Citrone

10. Microchip Technology Incorporated (NASDAQ: MCHP)

Citrone's Stake Value: $37,199,000 Percentage of Rob Citrone's 13F Portfolio: 4.98% Number of Hedge Fund Holders: 42

Dividend Yield: 1.08%

Microchip Technology Incorporated (NASDAQ: MCHP) is a semiconductor manufacturing company that produces semiconductors for embedded control applications in the US, Europe, and Asia. The company also offers wafer foundry and assembly, alongside test subcontracting manufacturing services. It ranks 10th on our list of the best dividend stocks to buy according to Tiger Cub Rob Citrone. Microchip Technology Incorporated (NASDAQ: MCHP) beat Q1 EPS estimates by $0.11, with $1.85 as their EPS value for the quarter. Their revenue totaled $1.47 billion, and earnings came up to $116 million. The stock gained 9.07% in the past 6 months and 11.09% year to date. By the end of the first quarter of this year, 42 hedge funds out of the 886 hedge funds tracked by Insider Monkey held stakes in Microchip Technology Incorporated (NASDAQ: MCHP). The value of these staked totaled roughly $962 million. This is compared to 45 hedge fund holders in the previous quarter, albeit with a lower stake value at roughly $961 million.

9. The Goldman Sachs Group, Inc. (NYSE: GS)

Citrone's Stake Value: $17,920,000 Percentage of Rob Citrone's 13F Portfolio: 2.4% Number of Hedge Fund Holders: 77

Dividend Yield: 1.35%

The Goldman Sachs Group, Inc. (NYSE: GS) provides financial services for companies, financial institutions, governments, and individuals internationally. Its headquarters are in New York, and it has four segments, namely investment banking, global markets, asset management, and consumer and wealth management. The Goldman Sachs Group, Inc. (NYSE: GS) ranks 9th on our list of the best dividend stocks to buy according to Tiger Cub Rob Citrone.

On June 9th, the company received a Buy rating from Jefferies, in light of its revenue and returns being considered more durable. The price target was set at $450 with a 17% upside. The Goldman Sachs Group, Inc.'s (NYSE: GS) one-year total return was also calculated to be 80%, higher than both JP Morgan's and S&P 500's total returns of 37.31% and 58.09%. With $18.60 in EPS, the stock also beat estimates for the first quarter by $8.38 and reported $17.77 billion and $6.84 billion in revenue and earnings respectively.

In the first quarter of 2021, there were 77 hedge fund holders of The Goldman Sachs Group, Inc. (NYSE: GS). Their total stake value was roughly $5.06 billion for that quarter. Comparatively, in the previous quarter, there were 76 hedge funds holding stakes in the company valued at around $4.61 billion.

Like Facebook, Inc. Common Stock (NASDAQ: FB), Uber Technologies Inc (NYSE: UBER), Micron Technology, Inc. (NASDAQ: MU), Microchip Technology Incorporated (NASDAQ: MCHP), ViacomCBS Inc. (NASDAQ: VIAC) and Intel Corporation (NASDAQ: INTC), The Goldman Sachs Group, Inc. (NYSE: GS) is one of the best stocks to buy based on Rob Citrone's Q1 portfolio.

Artisan Partners mentioned The Goldman Sachs Group, Inc. (NYSE: GS) in their first quarter 2021 investor letter. Here's what they said:

“Financial services firm Goldman Sachs is a best-in-class franchise with a premier brand that attracts top talent and sustains market share across its businesses. We believe this has helped Goldman weather recent market volatility. In addition to de-levering risk-weighted assets, Goldman is also growing its digital investment footprint through the expansion of features on its Marcus Invest platform. The company’s stability—and ability to grow its brand even in tough times—has kept us invested over the long term.”

8. JOYY Inc. (NASDAQ: YY)

Citrone's Stake Value: $1,658,000 Percentage of Rob Citrone's 13F Portfolio: 0.22% Number of Hedge Fund Holders: 20

Dividend Yield: 1.85%

JOYY Inc. (NASDAQ: YY) is an internet content and information company providing communications services and operating a social media platform in China and internationally. Some of the company's live streaming platforms include YY Live and Bigo Live. The company ranks 8th on our list of the best dividend stocks to buy according to Tiger Cub Rob Citrone. This January, JOYY Inc. (NASDAQ: YY) announced that its $3.6 billion sale of the YY Live streaming platform to Baidu will continue to go ahead. The company's first-quarter 2021 report showed that it had a non-GAAP EPS of -$0.30. It also beat revenue estimates by $53.08 million with its $643.1 million revenue. As of the end of the first quarter this year, 20 hedge funds out of the 886 tracked by Insider Monkey held stakes in JOYY Inc. (NASDAQ: YY), worth over $316 million. This is compared to 20 hedge fund holders in the previous quarter as well, yet with a much lower stake value of roughly $205 million. Like Facebook, Inc. Common Stock (NASDAQ: FB), Uber Technologies Inc (NYSE: UBER), Micron Technology, Inc. (NASDAQ: MU), Microchip Technology Incorporated (NASDAQ: MCHP), ViacomCBS Inc. (NASDAQ: VIAC) and Intel Corporation (NASDAQ: INTC), JOYY Inc. (NASDAQ: YY) is one of the best stocks to buy based on Rob Citrone's Q1 portfolio. Tao Value, an investment management firm, mentioned JOYY Inc. (NASDAQ: YY) in their first quarter 2021 investor letter. Here's what they said:

“We exited YY after 3.5 years near all-time high. The annualized return (13~%) yet is below expectation, especially compared to founder CEO David Xueling Li’s net worth (mainly in YY shares) ballooning from $1.1B in 2018 to $2.3B in 2021. On value realization, I think YY did a good job, acquiring Bigo, spinning off then selling Huya & selling YY Live to Baidu. But as a minority shareholder, we were treated unfairly. E.g. the Bigo deal (for buying shares from executives including Li) was done by YY stock when the price was severely depressed, causing significant dilution for our ownership. We learned our lessons and will evaluate more rigorously in management’s partnership mindset in the future.”

7. América Móvil, S.A.B. de C.V. (NYSE: AMX)

Citrone's Stake Value: $14,279,000 Percentage of Rob Citrone's 13F Portfolio: 1.91% Number of Hedge Fund Holders: 15 Dividend Yield: 2.24% América Móvil, S.A.B. de C.V. (NYSE: AMX) is a communications services company providing telecommunications services in Latin America and internationally. They offer wireless, fixed voice, and international long-distance services, alongside network connection services as well. The company ranks 7th on our list of the best dividend stocks to buy according to Tiger Cub Rob Citrone. In the first quarter of 2021, América Móvil, S.A.B. de C.V. (NYSE: AMX) had $0.03 in EPS. Its reported revenue and earnings were $248.19 billion and $1.81 billion respectively. The company has also gained 7.98% in the past 6 months and 4.54% year to date. By the end of the first quarter of this year, 15 hedge funds out of the 886 tracked by Insider Monkey held shares in the company worth roughly $93 million. This is compared to 16 hedge fund holders in the previous quarter whose stake value totaled about $169 million. Like Facebook, Inc. Common Stock (NASDAQ: FB), Uber Technologies Inc (NYSE: UBER), Micron Technology, Inc. (NASDAQ: MU), Microchip Technology Incorporated (NASDAQ: MCHP), ViacomCBS Inc. (NASDAQ: VIAC) and Intel Corporation (NASDAQ: INTC), América Móvil, S.A.B. de C.V. (NYSE: AMX) is one of the best stocks to buy based on Rob Citrone's Q1 portfolio.

6. ViacomCBS Inc. (NASDAQ: VIAC)

Citrone's Stake Value: $11,171,000 Percentage of Rob Citrone's 13F Portfolio: 1.49% Number of Hedge Fund Holders: 89

Dividend Yield: 2.30%

ViacomCBS Inc. (NASDAQ: VIAC) is an international media and entertainment company operating through three segments, namely TV entertainment, Cable Networks, and Filmed Entertainment. Its main TV network is CBS. The company ranks 6th on our list of the best dividend stocks to buy according to Tiger Cub Rob Citrone. ViacomCBS Inc. (NASDAQ: VIAC) beat Q1 EPS estimates by $0.30 with a $1.52 EPS. In its first-quarter report, the company also announced a $7.41 billion revenue and $911 million in earnings. The stock was upgraded to Buy by BofA securities this May and gained 15.5% in the past 6 months plus 14.23% year to date. ViacomCBS Inc. (NASDAQ: VIAC) has a forward PE ratio of 10.29 as well. By the end of the first quarter of 2021, there were 89 hedge funds, out of the 886 tracked by Insider Monkey, that held stakes in ViacomCBS Inc. (NASDAQ: VIAC). The total value of their stakes came up to roughly $2.35 billion. This is compared to 44 hedge fund holders in the previous quarter with a stake value of $919 million approximately, demonstrating a significant growth between the two quarters. Like Facebook, Inc. Common Stock (NASDAQ: FB), Uber Technologies Inc (NYSE: UBER) and Micron Technology, Inc. (NASDAQ: MU), VIAC is one of the best stocks to buy based on Rob Citrone's Q1 portfolio.

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Disclosure: None. 10 Best Dividend Stocks to Buy According to Tiger Cub Rob Citrone is originally published on Insider Monkey.