The Hedge Fund That Shook Up Microsoft Holds 2 High-Yielding Stocks Offering Buybacks

Zinger Key Points
  • During Q2, this firm returned $1.3B to common shareholders in the form of dividends and repurchases.
  • Over the second quarter, this company repurchased roughly $50M of shares.
The Hedge Fund That Shook Up Microsoft Holds 2 High-Yielding Stocks Offering Buybacks

ValueAct Capital has approximately $13.2 billion in assets under management. Recall in 2013 when the firm's founder, Jeff Ubben, became the first activist investor to land a board seat at Microsoft MSFT.

Then-CEO Steve Ballmer left a week after this move.

Ubben has since left ValueAct, but it's worth taking note of the high-yielding stocks the fund has for investors to consider. Here are two:

  • Citigroup Inc. C offers a dividend yield of 4.74% or $2.04 per share annually, making quarterly payments, with an inconsistent track record of increasing its dividends. The investment bank does business in more than 100 countries and jurisdictions. Its primary operations are cross-border banking needs for multinational corporations, investment banking and trading, and credit card services in the United States. During the second quarter, Citigroup returned a total of $1.3 billion to common shareholders in the form of dividends and repurchases. Citi’s book value per share of $92.95 and tangible book value per share of $80.25 increased 2% and 3%, respectively, largely driven by net income and lower shares outstanding.
  • Trinity Industries Inc. TRN offers a dividend yield of 4.18% or 92 cents per share annually, using quarterly payments, with a strong track record of increasing its dividends for 11 consecutive years. Trinity Industries sells and leases railroad products and railcar maintenance services in North America, and its customers include railroads, leasing companies, and shipping companies in the industries of agriculture, construction, consumer products, energy, and chemicals. Over the second quarter, Trinity repurchased about $50 million of shares, which included $25 million as part of the final settlement of our $125 million accelerated share repurchase agreement, and $25 million in the open market. “The strength of our backlog, as well as rising lease rates and fleet utilization, are especially encouraging and provide visibility into our expectations for the full year,” as there are backlogs of $2.2 billion at the end of the second quarter, Trinity CEO and president, Jean Savage said.

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