Billionaire David Tepper Bought 1 High-Yield Dividend Stock in Q2 and Sold Another. Should You Follow His Lead?

Tepper's Investment Moves - David Tepper's Appaloosa hedge fund increased its stake in United Parcel Service (UPS) by 0.83% in Q2 2024, purchasing 5,000 shares [2] - Appaloosa first initiated a position in UPS in Q4 2023 with 500,000 shares and added another 100,000 shares in Q1 2024, boosting its stake by 20% [2] - Tepper reduced Appaloosa's stake in Energy Transfer (ET) by nearly 10.9% in Q2 2024, following a sale of 1.14 million shares in Q1 2024 [3] - Energy Transfer's position in Appaloosa's portfolio has fluctuated multiple times since Tepper first bought it in Q2 2017 [3] Dividend Yields - UPS offers a forward dividend yield of over 5%, while Energy Transfer's distribution yield is nearly 8% [4] - Both stocks maintained attractive yields throughout Q2 2024 [4] UPS's Business Outlook - UPS's stock has declined more than 44% from its early 2022 peak, but U.S. shipping volumes rose in Q2 2024 after over two years of quarterly declines [5] - CEO Carol Tomé predicts a return to earnings growth in the second half of 2024 [5] - UPS has increased its dividend payout for 15 consecutive years, with management committed to future dividend growth [7] - The company is expected to improve its bottom line as it moves past higher initial costs from its 2023 union deal [8] Energy Transfer's Performance - Energy Transfer's stock was up around 17% year-to-date in early May 2024 and has surged 70% over the past three years [6] - The company is attractively valued with a forward earnings multiple of around 10 and is growing both organically and through acquisitions [9] - Energy Transfer's ultra-high distribution yield positions it to deliver exceptional total returns [9]