Billionaire George Soros, one of the world's most renowned financiers, founded Soros Fund Management in 1969. He is known as "The Man Who Broke the Bank of England" after he made a £10 billion bet against the British pound in 1992. The Bank of England, the U.K. monetary authority, was forced to undervalue its currency and Soros made $1.1 billion from his speculation. In 1997, he was also blamed for forcing devaluations in the currencies of the Southeast Asian nations. According to Forbes, George Soros is currently ranked the 22nd richest person, with an estimated net worth of $20 billion.
George Soros retired last year and turned his hedge fund into a family office. This move will shield his investments from the hedge fund industry's new disclosure requirements under the Dodd-Frank legislation. As of the first quarter of 2012, Soros Fund Management had a total of 180 stock holdings valued at $3.9 billion.
Here is a quick overview of George Soros' five largest positions that pay dividends:
Sara Lee Corp. (SLE) is the eight largest holding in George Soros' portfolio, with a 2.32% share valued at $159.2 million. Soros boosted his earlier stake by nearly 700% in the previous quarter. Sara Lee is currently operating as a diversified food producer. It has market capitalization of $11.4 billion. The company pays a dividend yield of 2.4% on a payout ratio of 77%. Its rivals Hain Celestial Group (HAIN) and Bridgford Foods (BRID) do not pay any dividends. The company's earnings per share (EPS) grew robustly over the past five years, but its dividend increased cumulatively only 15% since 2007. In terms of the forward-earnings valuation, the stock's forward P/E is trading slightly above that of its peers and the company's historical metrics.
The company is undergoing a major reorganization of its business. It will spin-off its international coffee and tea business and will merge it with its NYSE Euronext listed company D.E Master Blenders 1753. The company's shareholders of record as of the close of business on June 14, 2012, will receive a $3.00 per share special dividend on June 28. After the spin-off, Sara Lee will enforce a 1-for-5 reverse stock split and will change its name to Hillshire Brands Company, focusing on meat operations. The stock is trading at $19.23 a share, up 2.3% year-to-date. Among fund managers, SLE is also popular with Dan Loeb (Third Point-check out its top picks).
Chevron Corporation (CVX) has a 1.06% share, valued at $73.1 million, in Soros Fund Management portfolio. It is also a new holding in the fund's portfolio. Chevron is engaged in the production of energy including oil, natural gas, and geothermal energy. It has a market capitalization of $205 billion. This oil giant pays a dividend yield of 3.5% on a payout ratio of 26%. Its peers Exxon Mobil (XOM) and ConocoPhillips (COP) pay dividend yields of 2.7% and 4.7%, respectively.
Over the past five years, strong energy prices boosted the company's EPS, which grew at an average rate of 11.5% per year. Analysts forecast that EPS will expand at a more moderate rate of 5.1% a year over the next five years. In terms of the forward-earnings valuation, Chevron is valued below its industry and its own historical metrics. The stock is changing hands at $103.63 a share, down 6.1% year-to-date. In addition to Soros, the stock is also popular with Mario Gabelli and Ray Dalio, who hold minor stakes.
JPMorgan Chase (JPM) represents a 0.47% share in Soros' portfolio or about $32.3 million in investment. Boasting $2.3 trillion in assets, JPMorgan is the largest U.S. bank by asset size. It has market capitalization of $139 billion. The bank pays a dividend yielding 3.4% on a low payout of 18%. The bank's competitors Citibank (C), Bank of America, and Wells Fargo (WFC) pay dividend yields of 0.1%, 0.5%, and 2.7%, respectively.
The bank's EPS grew at a meager average annual rate of 3.3% over the past five years, and are expected to expand at a faster 7.3% annual rate for the next five years. The company's forward P/E is well below its peers' and the company's own historical metric. The stock is currently trading at $36.45 a share, up 4.2% year-to-date. Fund managers Ken Fisher and Lee Ainslie are major investors in the company.
Marathon Petroleum Corporation (MPC) has a 0.36% stake, valued at $25.1 million, in the Soros Fund Management portfolio. The U.S. refiner and marketer of petroleum products pays a dividend yield of 2.5% on a low payout ratio of 15%. The company's rivals Valero Energy Corporation (VLO) and Anadarko Petroleum (APC) pay dividend yields of 2.6% and 0.5%, respectively. Marathon Petroleum's dividend has risen 25% since mid 2011. Citing positive dividend growth and buyback trends, on June 20, Goldman Sachs upgraded Marathon Petroleum to buy from neutral. The firm said "shares are trading at an estimated low-end trading value," and risk/reward is favorable.
Analysts forecast robust EPS growth, averaging nearly 33% a year for the next five years. The stock has a forward P/E well below the industry's, on average. Currently, MPC is trading at $42.17 a share, 26.2% higher than at the beginning of the year. In addition to Soros, the stock is popular with fund managers John Burbank (Passport Capital-see its top picks) and Jean-Marie Eveillard.
General Electric (GE) has a 0.36% share, valued at $25.1 million, in Soros' portfolio. The multinational industrial conglomerate and financial services company pays a dividend yield of 3.4% on a payout ratio of 56%. The company's competitors Honeywell (HON), Siemens AG (SI), and 3M Company (MMM) pay yields of 2.6%, 3.4%, and 2.7%, respectively.
The company has seen its EPS shrink at an average rate of 8% per year over the past five years. With an economic rebound in sight, EPS growth is expected to average a solid 12.4% per year for the next five years. The company's stock is currently trading at $19.9 a share, up 8.4% year-to-date. The stock boasts a forward P/E on par with that of its industry, but lower than the company's historical ratio. Billionaire Ken Fisher is also bullish on the stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.