One of our most popular professional portfolios is that of John Paulson's Paulson & Co. Today, we're singling out some of Paulson's top dividend stock picks.
What follows is a closer look at five stocks among the top 30 that we track that sport current yields of 1.1% or higher. They all comprise at least 1.5% of Paulson's portfolio as of the recently-reported quarter ended March 31, 2015, and are ordered here by increasing position size.
5. Cablevision
Cablevision (CVC - Get Report) has a current yield of 2.3%, paying a quarterly dividend of 15 cents a share.
The stock comprises 0.8% of Paulson & Co.'s portfolio as of March 31. The 8.4 million-share position represents an decrease of 5.3 million shares, or 38.7%, over the previous quarter.
TheStreet Ratings team rates Cablevision Systems as a Hold with a ratings score of C. TheStreet Ratings team has this to say about its recommendation:
"We rate Cablevision Systems (CVC) a hold. The primary factors that have impacted our rating are mixed, with some indicating strength, some showing weaknesses, and with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
"We rate Cablevision Systems (CVC) a hold. The primary factors that have impacted our rating are mixed, with some indicating strength, some showing weaknesses, and with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, CVC's share price has jumped by 36.77%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for Cablevision Systems is rather high; currently it is at 50.71%. Regardless of CVC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.76% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 50.3% when compared to the same quarter one year ago, falling from $89.76 million to $44.63 million.
- Net operating cash flow has decreased to $215.34 million or 24.04% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
You can view the full analysis from the report here: CVC Ratings Report
4. Computer Sciences
Computer Sciences (CSC - Get Report) has a current yield of 1.4%, paying a quarterly dividend of 23 cents a share.
The stock comprises 1.4% of Paulson & Co.'s portfolio as of March 31. The 4.2 million-share position was a new buy for the fund in the recently-reported quarter.
TheStreet Ratings team rates Computer Sciences as a hold with a ratings score of C+. TheStreet Ratings team has this to say about its recommendation:
"We rate Computer Sciences (CSC) a hold. The primary factors that have impacted our rating are mixed, with some indicating strength, some showing weaknesses, and with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings team include:
"We rate Computer Sciences (CSC) a hold. The primary factors that have impacted our rating are mixed, with some indicating strength, some showing weaknesses, and with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings team include:
- The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.24, which illustrates the ability to avoid short-term cash problems.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 21.5%. Since the same quarter one year prior, revenues fell by 12.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the IT Services industry and the overall market, Computer Sciences' return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for Computer Sciences is rather low; currently it is at 16.36%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 0.30% significantly trails the industry average.
You can view the full analysis from the report here: CSC Ratings Report
