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Stanley Druckenmiller is one of the world's most renowned hedge fund managers. While at the helm of Duquesne Capital, a macro hedge fund, he generated returns averaging 30% per year between 1986 and 2010. After closing his investment company, Druckenmiller opened a family office to manage some of his wealth.

We recently wrote about Druckenmiller's five largest bets that pay dividends. In the meantime, Druckenmiller reshuffled his portfolio and sold out of his stakes in McDonald's Corp. (MCD) and Qualcomm Inc. (QCOM). According to the new 13F filing with the SEC, Druckenmiller's family office added several new positions to the fund. Here is a closer look at five new dividend-paying picks from Druckenmiller's portfolio in the second quarter:

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Eli Lilly & Co. (LLY) is a new addition to Druckenmiller's portfolio. The position was valued at more than $51 million at the end of the second quarter. Eli Lilly is a $47 billion pharmaceutical company. It pays a dividend yield of 4.6% on a payout ratio of 54%. The company raised dividends at an average rate of 3.2% per year over the past five years. Its peers GlaxoSmithKline (GSK), Sanofi (SNY), and Pfizer (PFE) pay lower dividend yields of 4.5%, 4.1%, and 3.7%, respectively. The stock boasts a free cash flow yield of 5.4%, ROE of 28%, and return on invested capital [ROIC] of 20%. Based on forward P/Es, the stock is trading at a small premium to the pharmaceuticals industry. There are assumptions that Druckenmiller's investment in Eli Lilly is a play on growth in the neurosciences pharmaceuticals sector. Eli Lilly recently raised its reported guidance due to additional revenue from Amylin Pharmaceuticals. The shares are up 20% over the past year. Eli Lilly was also a big new purchase by Andreas Halvorsen's Viking Global.

Verizon Communications (VZ) is another new position in Druckenmiller's portfolio. That stake was valued at $28 million at the end of the second quarter. The company is a $122 billion U.S. communications giant. Verizon pays a dividend yield of 4.5%, which is the second highest yield in the Dow Jones 30 index. The company's payout ratio is 42% of free cash flow. The company raised dividends at an average annual rate of 4.3% over the past five years. Verizon's main competitor AT&T (T) pays a dividend yield of 4.7%, while peer Sprint Nextel (S) does not pay any dividends. The company is likely an income play. Verizon's free cash flow is expected to improve over the next two years (while AT&T's will slightly deteriorate), which may be a reason for Verizon's management to boost the dividend payout by a higher-than-average rate. The stock has a free cash flow yield of 9.3%, ROE of 7.5%, and ROIC of 3.4%. Its forward P/E is above that of the telecommunications industry but well below the stock's five-year average ratio. The company's shares are up 24% over the past year. Verizon is also popular with Phill Gross (Adage Capital) and Cliff Asness.

AT&T is another U.S. communications giant and another new holding in Druckenmiller's fund. The position was also valued at $28 million at the end of the second quarter. The company has a market capitalization of $211 billion. AT&T is a dividend aristocrat that has increased dividends for 28 years in a row. It pays the highest dividend yield among Dow Jones 30 index constituents. AT&T's dividend yield is 4.7% and its payout ratio is 72% of free cash flow. The company boosted dividends at an average rate of 4.6% per year over the past five years. Its peer Verizon Communications pays a dividend yield of 4.5%, while Sprint Nextel does not pay dividends. AT&T has a free cash flow yield of 2.6%, ROE of 4.1%, and ROIC of 2.8%. The company's forward P/E is slightly below those of the telecommunications industry and the key competitor Verizon. The stock is up 31% over the past year. Adage Capital has nearly $290 million invested in the company. In a recent article, we took a closer look at AT&T and Verizon Communications as dividend plays.

Cummins Inc. (CMI) is a new $25 million position in Druckenmiller's portfolio. The company manufactures and services diesel and natural gas engines, engine-related components, and electric power generation systems. Cummins currently pays a dividend, yielding 2.0% on a payout ratio of 20%. Over the past five years, the company increased its EPS and dividends at average rates of 22% and 35% per year, respectively. Given the low payout ratio and forecast five-year EPS growth of 14% per year for the next five years, additional dividend increases may be expected in the future. Competitor Caterpillar Inc. (CAT) pays a yield of 2.4%, while rivals Navistar International Corporation (NAV) and Westport Innovations (WPRT) do not pay regular dividends. Recently, the company trimmed its full-year revenue guidance amid weak global sales and the firming dollar. Cummins has a free cash flow yield of 3.4%, ROE of 34%, and ROIC of 28.5%. In terms of valuation, the stock is priced in line with its industry on average. The stock is up 29% over the past year. Billionaire Jim Simons is also bullish about the stock.

Hillshire Brands Company (HSH) is a new, $5.8 million holding in Druckenmiller's fund. The company is a $3 billion spin off from Sara Lee. Hillshire Brands manufactures and sells branded packaged meat and bakery products. The stock pays a high dividend yielding 8.8% on a payout ratio of 76%. Its peers Hormel Foods Corp. (HRL), Tyson Foods (TSN), Kraft Foods (KFT) pay lower dividend yields of 2.1%, 1.0%, and 2.8%, respectively. The stock has an ROE of 17% and ROIC of 11.8%. On a forward P/E basis, the stock is trading at a small premium to its respective industry. The stock is down 13% from June 2. George Soros sold out of his stake in Hillshire Brands in the second quarter, while John Paulson acquired a new stake in the company worth some $86 billion.

Source: Billionaire Stanley Druckenmiller's 5 New Dividend Picks