Bill Ackman smokes “mentor” Warren Buffett

Buffett’s sidekick beats Berkshire at his own game

Content of the article

This article was created by MoneyWise. Postmedia and MoneyWise can earn affiliate commission through links on this page.

Advertising

Content of the article

Dividend stocks can seem boring, but they can offer attractive returns. Just ask the famous activist investor and self-proclaimed sidekick of Warren Buffett, Bill Ackman.

Its hedge fund Pershing Square Holdings has generated annualized total returns of over 30% over the past three years, significantly outperforming the S&P 500 and even Buffett’s Berkshire Hathaway.

And he did it in large part by owning dividend-paying stocks. According to Pershing’s latest 13F file with the Securities Exchange Commission, nearly 60% of its holdings at market value are invested in dividend-paying stocks.

Let’s take a look at three stocks in Ackman’s portfolio that regularly distribute money to investors – one of them might be worth buying with. your spare currency.

Advertising

Content of the article

Restaurant Brands International Inc (QSR)

A spicy chicken sandwich from Popeyes fast food restaurant.

Tony Prato / Shutterstock

Topping the list is International restaurant brands, a fast food holding company formed in 2014 by the merger between Burger King and Canadian coffee chain Tim Hortons. In 2017, the company added Popeyes Louisiana Kitchen to its portfolio.

Like most restaurant stocks, Restaurant Brands stocks fell during the pandemic-induced market selloff in early 2020. But the stock has seen a strong rally, supported by substantial improvements in the company’s business. business. Comparable store sales – a key measure of a retailer’s health – increased 27.6 percent, according to the latest earnings report.

Adjusted earnings were US $ 0.77 per share for the quarter, more than double the US $ 0.33 per share earned a year ago. The amount easily covered the company’s quarterly dividend payment of US $ 0.53 per share.

Advertising

Content of the article

Restaurant Brands offers a healthy 3.4% annual dividend yield. By comparison, that’s a higher return than fast food giants McDonald’s (2.26%), Starbucks (1.6%) and Yum! Brands (1.6%).

If you are looking for the money to be able to take advantage of this kind of returns, you might consider refinancing your mortgage and using the money available to invest for your future.

Lowe’s Companies Inc (LOW)

Exterior of Lowe's home improvement warehouse.

Ken Wolter / Shutterstock

Lowe’s is Bill Ackman’s largest stake in terms of market value, and this position has served the billionaire investor rather well. Shares of the home improvement retail giant have risen 29% year-to-date. The S&P 500 returned 16% over the same period.

What’s more impressive than Lowe’s short-term stock price performance is the company’s dividend growth over the years. In fact, Lowe’s has increased its shareholder payouts every year for the past 59 years. These decades of increases have brought Lowe’s quarterly dividend to US $ 0.80 per share, resulting in an annual return of 1.5%.

Advertising

Content of the article

And its competitors are dividend-paying companies too: Home Depot earns 2.0%, Target pays 1.5%, while Walmart offers an annual return of 1.6%. Due to Lowe’s rally over the past year, his shares are now trading over US $ 200. But you can get a part of the business by using a popular stock trading app which allows you to buy stocks of big names free of charge.

Agilent Technologies Inc (A)

Biotechnology scientist working in the laboratory

Elnur / Shutterstock

Agilent is not a household name but is a force to be reckoned with within its own industry – providing bio-analytical and electronic measurement solutions to a wide variety of industries including communications, life sciences. life and chemical analysis.

Based in Santa Clara, California, the company’s products are used by 265,000 laboratories around the world. In its fiscal year 2020, Agilent achieved total sales of US $ 5.34 billion. And in the last quarter, revenue increased 26% year-on-year to $ 1.59 billion.

Advertising

Content of the article

On the dividend side, Agilent is offering an annual return of 0.5%, which may not seem like much. But the company has an excellent track record of returning money to investors: Since 2014, Agilent’s quarterly payout per share has increased 106%.

Build your own dividends

While you might not be Bill Ackman, dividend-paying stocks are good choices that generate stable returns.

Even if you only have a modest investment budget, you can use an investment app like Wealthsimple which allows you to buy “slices” of shares big name stocks.

Calling on a robot-advisor can also be a a stress-free way to start investing.

And, those looking to take control of their investments should definitely explore online trading platforms. The best sites offer resources and tools to help investors make informed decisions when building and managing their investment portfolios.

This article was created by Wise Publishing. Wise is dedicated to providing information that helps readers navigate the complex landscape of personal finance. Wise only associates with brands that he trusts and that he believes can be of use to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Advertising

comments

Postmedia is committed to maintaining a lively but civil discussion forum and encourages all readers to share their views on our articles. Comments may take up to an hour of moderation before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread that you follow, or if a user that you follow comments. Visit our Community rules for more information and details on how to adjust your E-mail The settings.


Source link