Bill Ackman: General Growth Properties
Next on the list is Bill Ackman, Greenblatt’s former partner at Gotham Capital and the principal of Pershing Square Capital Management. Ackman is an activist investor with a history of taking large positions in companies and then agitating for radical change.
One such company in need of radical change is the iconic American retailer J.C. Penney (NYSE:JCP). Penney is Ackman’s largest position, comprising fully 17% of his portfolio. The company recently cut its dividend and is in the midst of an existential crisis, so we’ll move down the list to his first dividend stock of any size, diversified REIT General Growth Properties (NYSE:GGP).
A retail REIT might raise eyebrows when consumer spending appears to be slowing, but investors don’t appear to be worried. General Growth is up 20% year-to-date, roughly double the return of the S&P 500.
With a yield of 2.2%, General Growth certainly is not a big income generator, particularly by REIT standards. Still, a reliable 2.2% is attractive in a low-yield world.
As a side note, Ackman has a large position in Sizemore Investment Letter recommendation Beam Inc. (NYSE:BEAM), the maker of Jim Beam bourbon whiskey. Though not much of a dividend stock, it is attractive as a recent spin-off and as a money-minting sin stock.