John Paulson is the most successful hedge fund manager of the past four years. He made $4 billion by betting against subprime mortgage investments in 2007 and another $5 billion by betting on gold and the recovery of the economy in 2010.
John Paulson’s dividend stocks gained 20.1% in the last 12 months, vs. a 28.9% gain for the S&P 500 (NYSEARCA:SPY). (See Paulson's current top holdings here). WSJ reports that Paulson's Advantage Plus fund lost more than 13% this month through June 10, bringing its YTD losses to 19.65%. (Here are the details).
We compiled Paulson's dividend stock picks at the end of March. We required a minimum dividend yield of 2%; yields were obtained from Yahoo Finance. Here are Paulson's favorite dividend stock picks:
1. Lorillard Inc (NYSE:LO): Lorillard manufactures and sells cigarettes in the United States. Lorillard is the third largest tobacco company in the U.S., has 2700 employees and reported operating profit of $1.7 billion in 2010. LO recently traded at $110.83 and has a 4.8% dividend yield. LO gained 58% during the past 12 months. The stock has a market cap of $15.9 billion and P/E ratio of 15.8. Paulson had $55 million invested in LO shares. Jeffrey Gates’ Gates Capital also had $24 million invested in LO shares.
2. International Paper Company (NYSE:IP): International Paper provides paper and packaging worldwide. International Paper reported first-quarter 2011 net earnings totaling $342 million compared with net earnings of $316 million in the fourth quarter of 2010 and a loss of $162 million in the first quarter of 2010. IP recently traded at $30.56 and has a 3.5% dividend yield. International Paper recently increased its quarterly common stock dividend from $0.1875 per share to $0.2625 per share. IP gained 35.3% during the past 12 months. The stock has a market cap of $13.2 billion and P/E ratio of 11.5. Paulson had $302 million invested in IP shares. IP is one of the 40 stocks analysts are insanely bullish about.
3. Blackrock Inc (NYSE:BLK): BlackRock is a publicly owned investment manager. BLK recently traded at $198.49 and has a 2.8% dividend yield. BLK gained 34% during the past 12 months. The stock has a market cap of $37.4 billion and P/E ratio of 17.3. Paulson had $402 million invested in BLK shares.
4. Weyerhaeuser Co (NYSE:WY): Weyerhaeuser Company provides forest products worldwide. WY recently traded at $11.86 and has a 2.7% dividend yield. WY lost 8.2% during the past 12 months. The stock has a market cap of $11.86 billion and P/E ratio of 6.36. Paulson had $780 million invested in WY shares.
5. Medtronic Inc (NYSE:MDT): Medtronic provides device-based medical therapies worldwide. MDT recently traded at $38.2 and has a 2.6% dividend yield. MDT gained 5.9% during the past 12 months. The stock has a market cap of $40.3 billion and P/E ratio of 13.3. Paulson had $366 million invested in MDT shares.
6. Whirpool Corp (NYSE:WHR): Whirlpool Corporation provides home appliances worldwide. WHR recently traded at $82 and has a 2.4% dividend yield. WHR lost 7.1% during the past 12 months. The stock has a market cap of $6.14 billion and P/E ratio of 10.06. Paulson had $252 million invested in WHR shares.
7. JPMorgan Chase & Co (NYSE:JPM): JPMorgan Chase & Co. provides various financial services worldwide. JPM recently traded at $41.32 and has a 2.4% dividend yield. JPM gained 9.8% during the past 12 months. The stock has a market cap of $161.7 billion and P/E ratio of 9.04. Paulson had $231 million invested in JPM shares. Fairholme Capital’s Bruce Berkowitz is extremely bullish about Bank of America (NYSE:BAC) and thinks that it will outperform JP Morgan.
8. Northern Trust Corp (NASDAQ:NTRS): Northern Trust Corporation is an international financial services company. NTRS recently traded at $46.6 and has a 2.4% dividend yield. NTRS lost 0.5% during the past 12 months. The stock has a market cap of $11.06 billion and P/E ratio of 16.89. Paulson had $51 million invested in NTRS shares.
9. J. C. Penney Inc (NYSE:JCP): J. C. Penney Company, is operating mid-range department stores in the United States. JCP recently traded at $33.73 and has a 2.3% dividend yield. JCP gained 48.7% during the past 12 months. The stock has a market cap of $7.02 billion and P/E ratio of 19.72. Paulson had $82 million invested in JCP shares.
10. Baxter International Inc (NYSE:BAX): Baxter International is a global a global, diversified healthcare company. BAX recently traded at $33.73 and has a 2.1% dividend yield. BAX gained 48.7% during the past 12 months. The stock has a market cap of $24.64 billion and P/E ratio of 17.4. Paulson had $430 million invested in BAX shares.
11. Quad / Graphics Inc (NYSE:QUAD): Quad/Graphics, Inc. provides print and related services worldwide. Quad recently traded at $38.78 and has a 2.1% dividend yield. Quad lost 18.3% during the past 12 months. The stock has a market cap of $1.79 billion. Paulson had $46 million invested in Quad shares.
12. XL Group Plc (NYSE:XL): XL Group provides insurance and reinsurance services worldwide. XL recently traded at $22.51 and has a 2% dividend yield. XL gained 34.6% during the past 12 months. The stock has a market cap of $6.81 billion and P/E ratio of 31.58. Paulson had $723 million invested in XL shares. Leon Cooperman’s Omega Advisors had $112 Million, Steven Cohen’s SAC Capital Advisors had $110 Million and Ken Griffin’s Citadel Investment Group had $94 Million in XL Group at the end of March.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.