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In this article, we’re going to take a look at top 5 very high yield dividend stocks billionaires are piling into.
#5 Devon Energy Corp (NYSE:DVN)
Billionaire Investors: 13
Dividend Yield: 7.80%
At the end of September, there were 13 hedge funds run by billionaires bullish on Devon Energy Corp (NYSE:DVN), including Israel Englander’s Millennium Management, Leon Cooperman’s Omega Advisors and David E. Shaw’s D E Shaw. In November, Devon Energy Corp (NYSE:DVN) raised its dividend by 57% to $0.77 per share. In addition, the company reported better-than-expected top and bottom-line figures for the third quarter. During the earnings call, Devon Energy Corp (NYSE:DVN) President and CEO Rick Muncrief mentioned that the dividend growth was caused by the company more than doubling its free cash flow as it managed to keep the reinvestment rates to 50% of the cash flow. During the fourth quarter, Devon Energy Corp (NYSE:DVN) expects to maintain a solid financial position.
“However, we do expect our financial performance in the fourth quarter to be very strong with operating margins set to expand and free cash flow to be quite robust. Overall, the fourth quarter is set up to round out another successful year financially for our company. And while we have certainly faced some challenges this year, we’re on track to deliver one of the best years in our 50-plus year history in terms of returns and free cash flow generation,” Muncrief added.
#4 Walgreens Boots Alliance Inc (NASDAQ:WBA)
Billionaire Investors: 11
Dividend Yield: 8.30%
Then there’s Walgreens Boots Alliance Inc (NASDAQ:WBA), the only dividend aristocrat in the list of very high yield dividend stocks billionaires are piling into. Walgreens Boots Alliance Inc (NASDAQ:WBA) has been growing its dividend for the past 47 years. According to a recent Bloomberg report, Walgreens Boots Alliance Inc (NASDAQ:WBA) is considering separating its UK-based Boots business and either to sell it or spin it off into a separate public company via an IPO. The company has considered selling Boots in the past but did not receive any competitive offers. Moreover, at the beginning of December, credit rating agency Moody’s Corp (NYSE:MCO) downgraded Walgreens Boots Alliance Inc (NASDAQ:WBA)’s senior unsecured credit rating to Junk status citing concerns about the company’s high debt relative to its income. Among 11 billionaires bullish on Walgreens Boots Alliance Inc (NASDAQ:WBA) as of the end of September, Israel Englander’s Millennium Management boosted its stake 10-fold to 1.61 million shares during the last quarter.
#3 Altria Group Inc (NYSE:MO)
Billionaire Investors: 13
Dividend Yield: 9.28%
Altria Group Inc (NYSE:MO) is the only dividend king in our list of stocks, having raised its dividend each year for the past 54 years. Earlier this month, the tobacco company declared a dividend of $0.98 per share, in-line with the previous and payable on January 10 for shareholders as of December 21. For the last quarter, Altria Group Inc (NYSE:MO) reported EPS of $1.28 and revenue of $5.28 billion, both lower than expected. Amid the miss, the company also narrowed its full-year outlook to between $4.91 and $4.98 from the previous range of $4.89 to $5.03. During the third quarter, billionaire Cliff Asness’ AQR Capital Management raised its stake in Altria Group Inc (NYSE:MO) by 55% to 4.71 million shares.
#2 Hawaiian Electric Industries, Inc. (NYSE:HE)
Billionaire Investors: 11
Dividend Yield: 10.80%
Hawaiian Electric Industries, Inc. (NYSE:HE) is a public utility company that supplies with electricity the US state of Hawaii, covering 95% of the states’ households. The company’s stock took a big hit earlier this year following a major fire that affected many parts of Hawaii and caused more than 100 deaths and thousands of people forced to relocate. It is alleged that negligence by Hawaiian Electric Industries, Inc. (NYSE:HE) led to the fire. Maui County has filed a civil suit against Hawaiian Electric Industries, Inc. (NYSE:HE) saying that the company did not properly maintain its power grid and did not power down its equipment despite a red flag warning from the National Weather Service. Nevertheless, amid the drop in stock price, Hawaiian Electric Industries, Inc. (NYSE:HE) saw an increase in popularity among hedge funds, as 23 investors from our database disclosed holding $151.98 million worth of stock as of the end of September, versus 18 funds with $49.70 million in shares a quarter earlier.
#1 Petroleo Brasileiro ADR (NYSE:PBR)
Billionaire Investors: 11
Dividend Yield: 19.70%
With a dividend yield of 19.70% and a total of 11 billionaires holding the stock, Petroleo Brasileiro ADR (NYSE:PBR) leads our list of very high yield dividend stocks billionaires are piling into. Among the energy company’s top shareholders are billionaires Ken Fisher’s Fisher Asset Management, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group, which hold stake worth $261.5 million, $57.60 million, and $41.87 million, respectively. Petroleo Brasileiro ADR (NYSE:PBR) last earnings report came in mixed with EPS of $0.85 beating the consensus estimate of $0.83, but its revenue of $25.27 billion missed the expectations by around $570 million. Nonetheless, Petroleo Brasileiro ADR (NYSE:PBR) recorded a free cash flow of $8.36 billion, down from $10.12 billion a year earlier, but it marked the 34th quarter of positive free cash flow. Going forward, Petrobras expects production to reach 2.8 million barrels of oil equivalent per day this year, raising the guidance from 2.6 MBOE/d. The company also cut its spending outlook to $13 billion from $16 billion.
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