Leon Cooperman is the billionaire Chairman and CEO of Omega Advisors. Before founding his own hedge fund in 1991, Cooperman spend 25 years at Goldman Sachs. He joined the asset management division of Goldman right after his graduation from Columbia Business School, where he obtained an MBA. He used to be the Chairman and CEO of Goldman Sachs Asset Management. This is the tenth year after Cooperman established Omega Advisors and the fund currently manages approximately $5.4 billion assets.
Cooperman has been extremely bullish about U.S. equities for a while. He thinks stocks are better investments than bonds. We certainly agree with him. Long-term Treasury bonds have ridiculously low yields. Dividend stocks that yield 3% would outperform the 10-year treasuries if they don’t lose more than 10% of their value in 10 years. Dividend stocks that yield 5% would outperform 10-year treasuries if they don’t lose more than 30% of their value in 10 years.
Below we compiled a list of dividend stocks in Cooperman’s portfolio as of September 30. All companies have at least $2 billion market cap and dividend yields over 3%. The market data is sourced from Finviz.
Company Name | Ticker | Value | Activity | Dividend |
AMERICAN EAGLE OUTFITTERS | 772 | New | 3.02% | |
WILLIAMS COS | 73395 | 10% | 3.11% | |
MICROSOFT CORP | 33726 | New | 3.12% | |
CABLEVISION SYSTEMS | 50101 | 45% | 4.01% | |
N Y S E EURONEXT | 21181 | New | 4.40% | |
ISHARES TRUST | 8426 | New | 4.48% | |
K K R & CO L P | 55340 | 60% | 5.25% | |
VODAFONE | 30163 | -13% | 5.42% | |
REGAL ENTERTAINMENT | 51832 | 44% | 6.09% | |
TRANSOCEAN LTD | 70657 | 32% | 6.96% | |
LINN ENERGY LLC | 144337 | -1% | 7.37% |
Linn Energy Llc (LINE) is the stock with the highest dividend yield in Cooperman’s portfolio. As of September 30, Cooperman’s Omega Advisors invested $144 million in LINE shares. LINE has a market cap of $6.7B and a P/E ratio of 20.55. It pays a fat dividend to shareholders as its dividend yield is 7.30%. Since the end of September, it returned 8.03%, versus 11.59% for SPY. Jim Simons was also bullish about LINE. His Renaissance Technologies had $4.6 million invested in LINE as of September 30.
During the third quarter, Cooperman bought new stakes in NYSE Euronext (NYX). His Omega Advisors initiated a brand new $21 million position in NYX over the third quarter. NYX has a dividend yield of 4.23% and returned 22.12% so far in the fourth quarter, outperforming the SPY by more than 10%. Cooperman also opened new positions in Microsoft Corp (MSFT). His Omega Advisors bought $33.7 million of MSFT shares during the third quarter. MSFT returned 3.89% in the fourth quarter, lower than the 11.59% for SPY. But we think the stock is trading at a discount as the $215 billion market cap stock has a relatively low P/E ratio of 9.31. Boykin Curry’s Eagle Capital Management also invested nearly $500 million in MSFT.
In addition to MSFT, another dividend mega cap stock that Cooperman is bullish about is Vodafone Group Plc (VOD). As of September 30, Omega Advisors invested $30 million in this $143B market cap stock. VOD has a dividend yield of 5.42% and was up 10.95% so far in the fourth quarter. Boykin Curry is bullish about VOD as well. His Eagle Capital had $230 million invested in VOD shares at the end of the third quarter.
Cooperman is also bullish about KKR & Co (KKR). According to the latest 13F filing of Omega Advisors, the fund invested $55 million in this stock, up 60% from the end of the second quarter. KKR also pays decent dividends to its shareholders. It has a dividend yield of 5.26%. Since the end of September, KKR returned 30.59%, beating the market by 19 percentage points. John Griffin’s Blue Ridge Capital initiated a brand new $25 million position in KKR shares over the third quarter.
Other dividend yield stocks Cooperman is bullish about include Cablevision Systems Corp (CVC), Regal Entertainment Group (RGC), American Eagle Outfitters Inc (AEO), Williams Cos (WMB), iShares Trust (LQD), and Transocean Ltd (RIG).
We like Cooperman’s stock picks and we think the stock picks of Cooperman, especially those stocks with high dividend yields, are very likely to outperform bonds over the next 10 years.
Disclosure: I am long MSFT.
