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10 Best Dividend Stocks to Buy According to Billionaire Michael Hintze

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·9 min read
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In this article, we will look at the 10 Best Dividend Stocks to Buy According to Billionaire Michael Hintze. You can skip our detailed analysis of Hintze's history, investment philosophy, and hedge fund performance and go directly to 5 Best Dividend Stocks to Buy According to Billionaire Michael Hintze.

Sir Michael Hintze is an American-Australian businessman based in the UK. He graduated from the University of Sydney with a BSc degree in Physics in 1975 and a BE degree in engineering in 1977 from St John's College. Hintze also obtained an MSc degree in Acoustics from the University of New South Wales, an MBA degree from Harvard Business School and an Honorary Doctorate of Business from the University of New South Wales.

Before launching CQS Cayman LP in 1999, Hintze trained in financial services first by working for Salomon Brothers as a fixed income trader and Credit Suisse First Boston. He later moved to London from New York and joined Goldman Sachs as co-head of the UK Shares Product, leaving the firm in 1995. Four years later, CQS Cayman LP was founded.

Hintze's CQS has been highly successful since its launch, as in 2018, its main fund increased by 30%, and the hedge fund has roughly $9 billion in total AUM. This year, the fund launched a new investment strategy in light of 2020's financial losses, where CQS Directional Opportunities lost roughly 36%, and the firm's assets took a hit because of the coronavirus pandemic and the unease it caused in the markets.

Before this change, CQS had largely invested in corporate credit, structured credit, loans, and equities, but after the financial hits from 2020, this is reportedly being altered. CQS is now trying to generate higher returns through an unconstrained approach that will determine the best investment options for the fund in terms of risk management and returns. CQS reportedly seeks out companies with a reputation for producing high-quality products and services. Despite their 2020 losses, CQS is a firm that has proven to be successful in the past and may be resilient in the future by turning crises into opportunities.

CQS Cayman LP has a diverse portfolio, including stocks like Citigroup Inc (NYSE: C), Booking Holdings Inc (NASDAQ: BKNG), Nike Inc (NYSE: NKE), ViacomCBS Inc. (NASDAQ: VIAC), Darden Restaurants, Inc. (NYSE: DRI) and Simon Property Group, Inc. (NYSE: SPG).

In this article our focus would be on dividend-paying stocks in the Q1 portfolio of Michael Hintze.

Michael Hintze CQS Cayman
Michael Hintze CQS Cayman

Investing is becoming difficult by the day, even for the smart money. 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.

Our Methodology

The stocks listed in this article are taken from Sir Michael Hintze's Q1 13F Holdings and are ranked based on their dividend yields, from lowest to highest. We also took into account hedge fund sentiment, analysts' ratings, fundamentals and future growth potential while choosing these stocks.

So without further ado then, here are the 10 best dividend stocks to buy, according to billionaire Michael Hintze.

Best Dividend Stocks to Buy According to Billionaire Michael Hintze

10. Citigroup Inc. (NYSE: C)

Hintze's Stake Value: $34,218,000 Percentage of Michael Hintze's 13F Portfolio: 2.3% Number of Hedge Fund Holders: 90

Dividend Yield: 2.87%

Citigroup Inc. (NYSE: C) is a diversified financial service holding company that provides a range of financial products and services to consumers, corporations, governments, and other institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa. The company ranks 10th on our list of the best dividend stocks to buy according to billionaire Michael Hintze.

On June 28th, Citigroup Inc. (NYSE: C) mentioned that its SCB requirement will be increasing to 3% from the fourth quarter of this year to the third quarter of 2022. The company also launched its digital asset unit for cryptocurrency and blockchain solutions this month, a move that will allow the bank's clients to access the crypto market. In the first quarter of 2021, Citigroup Inc. (NYSE: C) had an EPS of $3.62, beating estimates by $1.09, while its revenue of $19.33 billion beat estimates by $441.79 million. The stock has gained 15.58% in the past 6 months and 17.06% year to date, and has a forward PE ratio of 8.04.

As of the end of the first quarter of 2021, 90 hedge funds out of the 866 tracked by Insider Monkey held stakes in Citigroup Inc. (NYSE: C) worth about $6.93 billion. This is compared to Q4 2020 numbers of 95 hedge fund holders with stakes valued at roughly $7.12 billion.

9.ViacomCBS Inc. (NASDAQ: VIAC)

Hintze's Stake Value: $6,013,000 Percentage of Michael Hintze's 13F Portfolio: 0.4% Number of Hedge Fund Holders: 89

Dividend Yield: 2.3%

ViacomCBS Inc. (NASDAQ: VIAC) is a media and entertainment company working internationally and operating through TV entertainment, cable networks, and filmed entertainment segments. The company ranks 9th on our list of the best dividend stocks to buy, according to billionaire Michael Hintze.

ViacomCBS Inc. (NASDAQ: VIAC) was upgraded from Neutral to Buy at BofA Securities this May and reported the first quarter of 2021 results where the company beat EPS estimates by $0.30 with $1.52 in EPS. ViacomCBS Inc. (NASDAQ: VIAC) also revealed a $7.41 billion revenue and $991 million in earnings. The stock has gained 16.1% in the past 6 months and 13.85% year to date, and its forward PE ratio is currently 10.25.

In the first quarter of 2021, 89 hedge funds out of the 866 tracked by Insider Monkey held stakes in the company. The total stake value came up to roughly $2.35 billion. This is compared to 44 hedge funds out of 887 tracked in the previous quarter, which held stakes worth about $919 million in ViacomCBS Inc. (NASDAQ: VIAC).

Like Citigroup Inc (NYSE: C), Booking Holdings Inc (NASDAQ: BKNG), Nike Inc (NYSE: NKE) and Darden Restaurants, Inc. (NYSE: DRI), ViacomCBS Inc. (NASDAQ: VIAC) is a dividend stock worth investing in based on Hintze's Q1 portfolio.

8. Darden Restaurants, Inc. (NYSE: DRI)

Hintze's Stake Value: $7,128,000 Percentage of Michael Hintze's 13F Portfolio: 0.48% Number of Hedge Fund Holders: 49

Dividend Yield: 2.57%

Darden Restaurants, Inc. (NYSE: DRI) owns and operates restaurants in the US and Canada. In 2020, the company had 1804 restaurants under its wing, including the 868 Olive Garden Branches, among several others. Darden Restaurants, Inc. (NYSE: DRI) ranks 8th on our list of the best dividend stocks to buy, according to billionaire Michael Hintze. Darden Restaurants, Inc. (NYSE: DRI) reportedly beat EPS estimates in the first quarter of 2021 by $0.29 with $0.98 in EPS. The company also reported revenue of $1.73 billion and earnings valued at $128.7 million for Q1. Darden Restaurants, Inc. (NYSE: DRI) gained 17.36% in the past 6 months and 17.61% year to date, demonstrating steady growth for the stock. Its forward PE ratio stands at 34.64. Out of the 866 hedge funds tracked by Insider Monkey in the first quarter of 2021, 49 held stakes in Darden Restaurants, Inc. (NYSE: DRI), worth roughly $1.31 billion. This is compared to 42 hedge fund holders out of 887 in the previous quarter, with stakes worth about $1.41 billion.

7. Royal Dutch Shell plc (NYSE: RDS-A)

Hintze's Stake Value: $2,094,000 Percentage of Michael Hintze's 13F Portfolio: 0.14%

Number of Hedge Fund Holders: 36

Dividend Yield: 3.19%

Royal Dutch Shell plc (NYSE: RDS-A) is an energy and petrochemical company operating internationally. The company extracts crude oil, natural gas, and natural gas liquids and transports them. Royal Dutch Shell plc (NYSE: RDS-A) ranks 7th on our list of the best dividend stocks to buy, according to billionaire Michael Hintze. On June 1st, Royal Dutch Shell plc (NYSE: RDS-A) extended a partnership with CGI, Inc., worth more than $165.9 million. Later on June 13th, Royal Dutch Shell plc (NYSE: RDS-A) was reported to be considering the sale of its holdings worth about $10 billion in the largest US oil field. In addition, the company reported its first-quarter 2021 results, showing that it beat EPS estimates by $0.03 with its EPS at $0.82. Out of the 866 hedge funds tracked by Insider Monkey, 36 hold stakes in Royal Dutch Shell plc (NYSE: RDS-A) worth roughly $2.19 billion, as compared to 34 hedge fund holders out of the 887 tracked by Insider Monkey in the previous quarter, holding stakes worth about $1.66 billion. Like Citigroup Inc (NYSE: C), Booking Holdings Inc (NASDAQ: BKNG), Nike Inc (NYSE: NKE), ViacomCBS Inc. (NASDAQ: VIAC), Darden Restaurants, Inc. (NYSE: DRI) and Simon Property Group, Inc. (NYSE: SPG), Royal Dutch Shell plc (NYSE: RDS-A) is a dividend stock worth investing in.

6. Simon Property Group, Inc. (NYSE: SPG)

Hintze's Stake Value: $21,673,000 Percentage of Michael Hintze's 13F Portfolio: 1.46% Number of Hedge Fund Holders: 31

Dividend Yield: 3.96%

Simon Property Group, Inc. (NYSE: SPG) is a real estate investment trust and works with premier shopping, dining, entertainment, and mixed-use destinations and their ownership. The company ranks 6th on our list of the best dividend stocks to buy, according to billionaire Michael Hintze.

Simon Property Group, Inc. (NYSE: SPG) boosted guidance for the whole year for FFO per share this May in light of reduced coronavirus restrictions. The company's CEO and President David Simon commented on the increased profits and cash flow after COVID-19 restrictions were lifted and shopper traffic increased. In April, the stock also benefited from being upgraded to Outperform by Evercore ISI, with its price target increased from $128 to $112.

Out of the 866 hedge funds tracked by Insider Monkey in the first quarter of 2021, 31 held shares in Simon Property Group, Inc. (NYSE: SPG) in that quarter, worth about $506 million. This is compared to 32 hedge fund holders with stakes roughly valued at $353 million in the previous quarter.

Like Citigroup Inc (NYSE: C), Booking Holdings Inc (NASDAQ: BKNG), Nike Inc (NYSE: NKE), ViacomCBS Inc. (NASDAQ: VIAC) and Darden Restaurants, Inc. (NYSE: DRI), Simon Property Group, Inc. (NYSE: SPG) is a dividend stock worth investing in based on Hintze's Q1 portfolio.

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Disclosure: None. 10 Best Dividend Stocks to Buy According to Michael Hintze is originally published on Insider Monkey.