10 Best High Yield Dividend Stocks to Buy According to Billionaire Jim Simons
In this article we presented the 10 best high yield dividend stocks to buy according to billionaire Jim Simons. You can skip our detailed discussion on Singer’s investment philosophy and read the 5 Best High Yield Dividend Stocks to Buy According to Billionaire Jim Simons.
James Harris Simons, popularly known as Jim Simons, is one of the most iconic figures in hedge fund history. He started his career as a mathematician before diving into finance in the late 1970s. He founded New York-based Renaissance Technologies in 1982, a hedge fund that uses quantitative analysis to pick out trading opportunities in the financial markets.
Billionaire Jim Simons' Hedge Fund's Performance
Renaissance Technologies relies on quantitative techniques that are based on statistical and mathematical models to achieve systematic trading. It is currently one of the most successful hedge funds. To put its success to perspective, its founder, Jim Simons' wealth is estimated to be around $23.5 billion, making him one of the top 30 richest people in the U.S.
Renaissance Technologies delivered 66% annualized returns between 1988 and 2018 pre-fees and 39% after fees. Simons retired from his position as the company towards the end of 2009, but he is considered one of Wall Street's greatest money managers of all time. The hedge fund delivered an annual return of 71.8% before fees from 1994 to 2014. Its popular Medallion Fund, which is exclusively available to former and existing partners, was up 9.1% in Q1 2021, continuing its trend from the previous year, during which the fund gained 76%.
Jim Simon’s wealth reportedly grew by $2.6 billion in 2020. Despite the fund’s success, there were some losses. Renaissance Technologies’ international equities fund was reportedly down 19% in 2020 while its Alpha Fund tanked by 19% during the same period, as some investors started pulling out their money.
Renaissance Technologies has reportedly been bullish by as much as 24% in 2021 so far up to April 14. March was a particularly good month for the fund considering its 9.9% rally. The fund’s market value in Q4 2020 was $92.092 billion, which was notably lower than its $100.15 billion market value in the previous quarterly period.
The fund purchased 574 new stocks in Q4 2020. It also added its stake in 1,140 stocks, offloaded 565 stocks, and trimmed its shareholding in 1,623 stocks.
Jim Simons of Renaissance Technologies
Where does Renaissance Technologies Invest?
The hedge fund has a robust portfolio that is spread out across multiple industrial segments. The healthcare segment takes the lion’s share of the portfolio at 21.64%, followed by the IT segment at 15.89%. Consumer discretion is also sizable at 13.90%, the communications industry at 9.63%, while consumers staples account for 8.41%. The finance segments take up 8.17%, materials at 5.39%, and industrials have the smallest share of the portfolio at 5.10%.
Simons is a quant genius whose bets are often contrarian and ignore market sentiment. For example, in the fourth quarter of 2020, Renaissance initiated a new stake in NVIDIA Corporation (NASDAQ: NVDA), buying about 1 million shares in the company, worth $523.82 million. On the other hand, ARK's Cathie Wood has been selling NVIDIA, based on the latest 13F data. ARK recently sold about 31,938 shares of Nvidia Corp (NASDAQ: NVDA) through ARK Autonomous Technology & Robotics and Ark Fintech Innovation ETFs.
Simons is also bullish on Facebook, Inc. Common Stock (NASDAQ:FB), according to his hedge fund's disclosed holdings data as of the end of 2020. The fund increased its hold in Facebook, Inc. Common Stock (NASDAQ:FB) by 35% in the fourth quarter, ending the period with over 1 million shares of the social media giant, worth $274.6 million. Investment firm Oppenheimer recently upped its ads revenue estimates for Facebook stock, citing upbeat digital advertising spending expecting in 2021 on the back of economic recovery. The firm increased its Facebook, Inc. (FB)'s 2021 ad revenue estimates by 3%.
But in this article we focus on Simons' high-yield dividend picks. It has become extremely important for average investors to pay attention to reliable dividend stocks in the current age of financial volatility, job losses and recession. 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.
Let’s start our list of the 10 best high yield dividend stocks to buy according to billionaire Jim Simons. We analyze the positions with high dividend yield initiated by Renaissance Technologies.
Best High Yield Dividend Stocks to Buy Based on Renaissance's Q4 Portfolio
10. Altus Midstream Company (NASDAQ: ALTM)
Number of Hedge Fund Holders: 4Dividend Yield: 10.5%
Altus runs gas collection, processing, and transmission activities in the Delaware Basin. It also has equity in four major pipelines operating between Permian and Gulf Coast. Altus Midstream had four hedge fund investors in Q4 2020.
The company’s net income in Q4 2020 was $60.2 million. Its revenue for the same period was $35.4 million, which was down 19.2% YOY. The company is expected to register between $30 and $40 million in revenue from its capital investments in 2021.
Altus announces its latest quarterly dividend at $1.50 per share, which was paid out on March 31. According to Jim Simon's hedge fund, the healthy dividend payout makes it one of the best high-yield dividend stocks.
9. KNOT Offshore Partners LP (NYSE: KNOP)
Number of Hedge Fund Holders: 4Dividend Yield: 10.66%
KNOT operates shuttle tankers through long-term charters serving offshore oil production in Brazil and the North Sea region. The company has 16 specially customized ships with complex positioning and loading systems known as shuttle tankers used to ferry oil from offshore rigs to onshore refineries. Four hedge funds had invested in the company in Q4 2020, including Renaissance Technologies.
The company announced a quarterly dividend of $0.52 per share for Q1 2021, aligning with its $2.08 annual dividend. This also makes it one of the best high yield dividend stocks on Renaissance Technologies' portfolio. The dividend payout will take place on May 13, 2021.
KNOT Offshore Partners operations went unaffected by the coronavirus pandemic. Its revenue in the latest quarter was 71.3 million after a 0.4% gain. It reported a net income of $25.1 million, which reflects a 77.2% gain. Its net profit margin was 35.2 million representing a 76.6% gain. The company’s diluted earnings per share increased by 78.6% to $0.75.
8. National Presto Industries Inc. (NYSE: NPK)
Number of Hedge Fund Holders: 9Dividend Yield: 11.66%
National Presto is a U.S-based company that makes small appliances and defense equipment. The company has been around for more than a century, during which it was also known as northwestern Steel and Iron Works in the early 1900s and National Pressure Cooker Company by 1929. It adopted its current name in 1953. The company has a wide range of products, especially kitchen ware. However, most of its business comes from the defense segment.
National Presto Industries reported $65.64 million net sales in Q1 2020, a slight increase from the $63.85 million net sales figure in Q1 2019. Full-year 2020 net sales hit 87.13 million, representing a 21.45% YoY gain. This improved performance can partly be explained by the lockdown, which meant that people had more time to cook rather than eating out; thus, the demand for home appliances increased.
98% of the demand for products by National Presto Industries currently comes from the defense industry in government contracts. The small appliances and houseware segment accounts for 28.92% of the company’s sales. The company had 9 hedge funds owning its shares in Q4 2020. Royce & Associates had the highest holding of any of the hedge funds at 452,635 shares.
The company is debt-free and is very reputable as far as dividend payouts are concerned. It is certainly one of the best high-yield dividend stocks that investors can get into. It has an 18.64% annual return.
7. Natural Health Trends Corp. (NASDAQ: NHTC)
Number of Hedge Fund Holders: 2Dividend Yield: 11.28%
Natural Health Trends sells wellness, health, and vitality products through direct selling networks that distribute the products to international markets. The products include cremes, lip gross, dietary supplements, and skincare products. Natural Health Trends had two hedge fund investors in the latest quarter, namely Renaissance Technologies, which owns 914,038 shares, and D E Shaw with 10,291 shares.
The company reported $16.6 million in Q4 2020 revenue representing a 17% gain from its revenue in the previous quarter. Its operating revenue for the full year 2020 dropped by $9.0 million. Its Q4 2020 performance represents the third consecutive quarter that the company has achieved a positive operating income.
Its Q4 and full-year 2020 operations achieved a positive cash flow. The company reported a $0.20 quarterly cash dividend earning it a spot among the best high yield dividend stocks.
6. Hoegh LNG Partners LP (NYSE: HMLP)
Number of Hedge Fund Holders: 6Dividend Yield: 11.00%
Hoegh offers liquefied natural gas services by operating floating storage, as well as regasification units. Its portfolio also includes LNG assets such as carriers, among others. The company attracted 6 hedge fund investors, including Renaissance Technologies, which owned 717,669 shares, and Arrowstreet Capital at 153,636 shares.
The company recently announced a quarterly cash distribution or dividend of $0.44 per common share in line with its annual dividend of $1.76 per share, making it one of the best high dividend stocks.
The company leases floating storage regasification units through highly profitable long-term contracts that span up to 8.5 years, making it a reliable LNG shipping company.
Hoegh LNG Partners’ operating income in Q4 2020 was $25.5 million while its net income was $18.5 million. In comparison, its operating income in Q4 2019 was $27.9 million, while its net income for the same period was $18.7 million.
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Disclosure: None. 10 Best High Yield Dividend Stocks to Buy According to Billionaire Jim Simons is originally published on Insider Monkey.
