Few investors have realized better sustained profits than George Soros. His hedge fund’s annualized returns exceeded 30% for over 30 years, and made him one of the world’s richest men. He gained fame in 1992 when he made a famous bet against the Pound Sterling and generated over $1 billion in profits in just 24 hours. While his political activities have generated controversy and criticism, no one can doubt his financial acumen.

He bases that acumen on a simple aphorism: “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing in boring.” He means, of course, that the most reliable stocks are the ones least likely to make waves in the markets or headlines in the news. So, don’t expect to find anything exciting in his firm’s $3.6 billion worth of 13F securities – but do expect to find solid returns and reliable dividends. After all, that’s where the profit is.

To find out just how good that profit can get, we’ve taken three of Soros’ big dividend moves and looked them up in the TipRanks database. These are investments that the Stock Screener tool reveals as ‘Buy’ rated and, more importantly, all three offer robust dividend yields, between 4% and 11%. The average dividend yield of the S&P-listed stocks is just about 2%, so Soros’ choices start at double that – and work their way up.

BP (BP)

Up first is BP, the world’s sixth largest oil and gas company. The company’s revenues in calendar year 2018 totaled $303.7 billion, and gave a net profit of $9.6 billion. BP has had some trouble maintaining that sort of performance in 2019, however. In the Q3 earnings release, the company reported $2.3 billion in profits, a 17% decline sequentially and a 39% drop year-over-year.

The drop in profits comes on the heels of declining oil prices. Brent crude, the global benchmark price on the oil markets, is down 12.7% from its peak in April of this year. There are subtleties in pricing, however. BP’s quarterly earnings reflect the generally low oil prices, but those same oil prices have been trending slightly upwards since October – and BP’s Q3 numbers did beat the analysts’ expectations. Among the headwinds the company faces is a CEO transition, as current head Bob Dudley will be stepping down this coming March. He will be followed by the company’s upstream chief. The promotion from within promises continuity despite the upper level churn.

So, BP is a stock that is weathering a down time in commodity prices, with the resources to wait out a low-price regime. That’s a good position for a company to hold. Even better, for investors, the company has maintained its dividend. The quarterly payment has been set at 61 cents for the last six quarters, and the was 60 cents prior to that. The annualized dividend of $2.44 gives a yield of 6.67%, more than triple the S&P average. At 92%, the payout ratio, while high, is sustainable long-term.

With a background like that, it’s no wonder that Soros moved heavily into BP in Q3. The stock offers a solid industry position, a reliable dividend, and a clear path for future profits. Soros’ purchase of BP marked a new position, of 270,000 shares for his fund. At today’s prices, those shares are worth nearly $10 million.

Wall Street is upbeat about BP prospects. Setting that tone is BMO analyst Daniel Boyd, who writes, “We think BP is turning a corner after years flagging financial performance driven in part by oil-spill payments that are dropping off. We expect strong production and cashflow growth, enabled by high margin projects, to fuel dividend growth and improved returns.”

Boyd’s Buy rating is backed up by a $53 price target, suggesting a strong upside of 43%. (To watch Boyd’s track record, click here)

BP shares have received three recent Buy ratings, giving the stock a unanimous ‘Strong Buy’ from the analyst consensus. The average price target stands tall at $51.33 -- indicating a robust upside potential of 39%. (See BP stock analysis on TipRanks)

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