By Aubrey Tabuga
Todd Veredus Asset Management is one of the largest asset management companies in the market. It had $3.148 billion worth of assets under its management as of the end of September 2012. The asset manager's investment portfolio was heavy on the financial (19.79%), technology (19.21%), services (16.04%), energy (10.82%), and healthcare (8.69%) sectors. It is known for employing intrinsic value and growth investment philosophy.
In this article, I investigate Todd Veredus' top stocks with highest dividend yields. These are Philip Morris International, Inc. (NYSE:PM), Chevron Corporation (NYSE:CVX), Blackrock Inc. (NYSE:BLK), Pepsico Inc. (NYSE:PEP), and ConocoPhillips (NYSE:COP). I briefly discuss each stock's track record in paying out dividends and the historical trading activities of the fund manager with respect to each stock.
% of Portfolio
Philip Morris International, Inc.
Here is the dividend history for each stock:
Annualized Dividend Amount ($)
Philip Morris International, Inc.
Philip Morris International
Philip Morris International is a leading manufacturer and marketer of cigarettes and other tobacco products. It is the maker of international brands like Marlboro, Philip Morris, Virginia Slims, and L&M, among others. The third quarter earnings report of the company shows an EPS that was in line with expectations. The revenue, however, fell by 5.5% from that of the same quarter last year. Nonetheless, TheStreet Ratings recently reiterated a buy for Phillip Morris with a B score.
Todd Veredus slightly decreased its position in PM in the third quarter. The company has been a consistent favorite of the asset manager for at least in the last 9 quarters that whalewisdom.com database currently shows. Although Todd Veredus has been cutting parts of its PM holdings, it still maintained an above 2% share.
Compared with a year ago, the stock performance has jumped by 14.40%. It has a high yield of 3.89% and has been paying its investors steady and increasing dividends since the second quarter of 2008. The most recent payment was 9.88% higher than the dividend amount in the same quarter of the previous year. EPS was estimated to rise by an annual rate of 9.85% in the next 5 years.
Todd Veredus also favors Chevron Corporation, the petroleum, chemicals and mining company. Chevron's affiliate in Indonesia recently announced it will spend around $500 million for an expansion it is starting in Sumatra. This will likely boost the company's growth prospects in the said country. This project is part of the expansion it completed in 2009 that has brought an additional 40,000 barrels of oil per day to its production.
As of the end of September, Todd Veredus owns 520,489 shares in Chevron. This forms 1.93% of the asset management's total portfolio. The 13F filing of the fund manager has been showing a decreased holding for 3 consecutive quarters now.
Chevron has a high yield of 3.26%. The company is paying steady and rising dividends since the last quarter of 2004 based on data compiled by nasdaq.com. The dividend for November, for instance, inched up by 10.5% from the same quarter last year. Moreover, the payout ratio has declined from a historical level of 77.5% to 62.99%, exhibiting its improving ability to raise dividends. The stock has performed a positive 6.30% from the previous year. The company's profitability at 10.02% adds to its attractiveness as an investment.
BlackRock is a New York-based publicly owned investment manager. Recently, it has surpassed Zacks Consensus Estimate for its third-quarter earnings, which came in at $3.47 per share. The company has just launched a new digital retirement center, which aims to assist investors in defining their needs and goals as well as the steps necessary in terms of saving and investing for retirement.
Todd Veredus held on to its shares in Blackrock. It slightly increased its position further in the third quarter. The firm has actually bought additional shares in the last 4 quarters that followed its purchase in the second quarter of 2011. Blackrock now comprises 1.50% of the asset management firm's total holdings.
It is one of Todd Veredus' favored dividend stocks with its yield at 3.13%. The dividend amount has been either steady or rising since 2003. The stock's year-to-date performance is up by 10.14% from last year. It is a good earnings generator with an estimated annual growth rate of 12.50% in the five years to come.
PepsiCo, a manufacturer and seller of food and beverages, is also Todd Veredus' favored dividend stock. Recently, the Pepsico's Thai unit sets its investment plan in the country until 2015. It seeks to dominate the carbonated drinks market after the company had split with a local company. Todd Veredus has cut some of its holdings in the beverage company in the third quarter. During the last 3 quarters, the fund manager has been continuously increasing its holdings. Nonetheless, Pepsico still forms a significant 1.41% of the asset management company's total shares.
Despite the recent slow growth in Pepsico's dividend payment, the company still continues to set an outstanding record. According to nasdaq.com, the company continues to pay steady and increasing dividends since 2000. It has a high yield of 3.10%. The stock's performance has improved by 7.01% compared with the year earlier. Pepsico's EPS is estimated to grow at an annual rate of 6.18% for the next 5 years. It, however, needs to improve its ability to raise dividends as the current payout ratio is at a higher rate of 55.46% when compared with the historical level of 47%.
ConocoPhillips engages in production, exploration, transportation, and marketing of crude oil and natural gas. Its exploration activities cover 19 countries as of the end of December 2011.
The Houston-based company has received a buy rating from TheStreet Ratings. The asset manager purchased additional shares of ConocoPhillips in the third quarter. Although it has been selling small portions of its holding in the past couple of months, the oil and gas company still comprises a significant 1.32% of the fund management firm's total portfolio. It is noted that Todd Veredus initiated its position in COP in the last quarter of 2010.
ConocoPhillips has a high yield of 4.53%. Since the third quarter of 2005, the company has been paying its investors stable and rising dividends. The stock is profitable at a margin of 11.31%. The stock's year-to-date performance is up by 13.31%. However, its ability to raise dividends in the future deteriorated as the payout ratio leaps from 28.79 to 46.44%.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: EfsInvestment is a team of analysts. This article was written by Aubrey Tabuga, one of our equity researchers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.