TipRanks
Billionaire David Tepper Bets Big on These 2 “Strong Buy” Dividend Stocks
Anyone trying to keep track of where the markets might be heading, could be forgiven for displaying signs of dizziness. The markets are being violently pulled in opposite directions lately, making it difficult to form a coherent investing strategy. It is in time like this that some expert advice might provide a clearer picture. Hardly any on the Street come more highly regarded than billionaire David Tepper. The co-founder of global hedge fund Appaloosa Management, Tepper is known for his brash and confident style, traits which could come in handy in today’s confused climate. Tepper made his fortune – and built his hedge fund – by investing in distressed assets and profiting mightily when markets reversed later on. And with $14 billion worth of assets under Appaloosa’s management, it’s natural for Wall Street to take notice when Tepper has something to say. “Basically, I think rates have temporarily made the most of the move and should be more stable in the next few months, which makes it safer to be in stocks for now,” Tepper noted. The billionaire believes the rising rates should settle and points out that with the Senate’s approval of the coronavirus fiscal stimulus package, it is currently “very difficult to be bearish.” With this in mind, we’ve opened up the TipRanks database to get the scoop on two of Tepper’s recent new positions. These are Strong Buy stocks – and perhaps more interestingly, both are strong dividend payers, with annual yields exceeding 7%. We can turn to the Wall Street analysts to find out what else might have brought these stocks to Tepper’s attention. MPLX LP (MPLX) We’ll start with a long-established name in the energy sector. Marathon Petroleum, one of the giants of Big Oil, operates across the US, in the Rocky Mountains, the Midwest, and along the Gulf Coast, moving oil and natural gas products from the wells to the storage and distribution facilities. MPLX has benefited from the general economic reopening in the second half of 2020, with the stock gaining as more people returned to work and demand for fuel increased. Overall, shares are up 98% in the last 12 months. At the top line, revenues have rebounded from a dip in 2Q20, gaining 8.5% to reach $2.17 billion by Q4. Earnings, which turned sharply negative in 1Q20, rose steadily through the rest of the year, and came in at 64 cents per share in Q4. But perhaps the most important metric, for investors, was MPLX’s net cash position – for the full year 2020, the company generated $4.5 billion in cash, and returned over $3 billion of that to shareholders. In its most recent dividend declaration, the company announced a 68.75 cent payment per common share, or $2.75 annualized. This gives a yield of 10.5%, far above the average yield. And David Tepper,…
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