BN:CC - Billionaires Are Buying These Big Dividends
2024-02-13 16:40:00 ET
If you’re looking for stock ideas, you could do worse than look at the portfolios of billionaire investors. Not everybody with a billion dollars is necessarily smart, but those who got their billions by managing money over periods of decades usually are.
These days, many such people are heavily invested in tech stocks that offer little to no yield. Warren Buffett has Apple , Stanley Druckenmiller has NVIDIA , and Bill Ackman has Google. Nevertheless, if you’re a dividend investor looking for high-yield names with billionaire backing, you can find them. In this article, I will explore three stocks with (relatively) high dividend yields that billionaires can’t seem to get enough of.
Brookfield Asset Management
Brookfield Asset Management ( TSX:BAM ) is a Canadian financial services company whose shares have a 3.74% dividend yield. It was recently purchased by billionaire Canadian investor Bruce Flatt, who had previously sold the stock in order to purchase shares in its parent company, Brookfield ( TSX:BN ). Flatt currently owns more than $3 billion worth of BN and BAM stock (he is the chief executive of the former).
What does Brookfield Asset Management do? Mainly, it manages funds for wealthy investors. These include real estate investment trusts (REITs), alternative asset funds, and others. The company collects fees for managing these funds. Brookfield invests in the funds, so the company’s incentives align well with the way it earns its fees.
I recently sold my Brookfield Asset Management shares, but it was not due to changing my opinion on the company or anything like that. I was just sitting on a nice gain and felt it prudent to invest the sales proceeds into a lower-risk, 5% yielding Guaranteed Investment Certificate (GIC).
Torm PLC
Torm PLC ( NASDAQ:TRMD ) is a Danish shipping company that transports crude oil and other petroleum-related products. Its yield is hard to peg down because it is in a cyclical industry, and its payout goes up and down a lot. Going by the last 12 month’s dividends, the yield is about 21%. That’s a pretty high yield, although the odds of it continuing to be that high in the future are much lower than 100%.
Torm, as a tanker company, plays a vital role in the world’s economy. It ships oil all over the world, making shipments from major supplier countries like Saudi Arabia. It is owned by legendary investor Howard Marks, who has a 19% compounded annual growth rate (CAGR) career track record.
Chevron
Chevron ( NYSE:CVX ) is an energy stock owned by billionaires Warren Buffett and Stanley Druckenmiller. It has a 4.3% dividend yield.
Chevron is a diversified energy company involved in exploration and production (E&P), refining and transportation. It owns valuable assets in the Permian Basin, one of the most productive oil-producing regions in the world.
Chevron stock is pretty cheap at today’s prices. Trading at 11.7 times earnings, 1.36 times sales and 1.7 times book value, it is only half as richly valued as the average S&P 500 stock. Despite a brief energy scare in 2022, the countries of the world don’t look all that eager to transition to nuclear energy. There are significant investments being made in renewables but they still supply only a small percentage of the world’s electrical grids. So, oil will probably be relevant for the foreseeable future, and Chevron will likely thrive along with the commodities it sells.
The post Billionaires Are Buying These Big Dividends appeared first on The Motley Fool Canada .
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Andrew Button has positions in Alphabet, Apple and Brookfield. The Motley Fool recommends Alphabet, Apple, Brookfield, Brookfield Asset Management, Brookfield Corporation, Chevron, and Nvidia. The Motley Fool has a disclosure policy .
2024