5 Ultra High Dividend Stocks Hedge Funds Are Piling On

Let’s start with Iron Mountain Incorporated (Delaware) REIT (NYSE:IRM), in which the number of funds in our database long the stock went up by six to 17 during the first quarter. Subsequently, the total value of their holdings grew to $107.02 million from $90.86 million. Iron Mountain Incorporated (Delaware) REIT (NYSE:IRM) is engaged in providing services for storage and information management, having started nearly seven decades ago as an underground facility to store paper records. The company registered as a real estate investment trust only a couple of years ago and that status means that it has to pay out almost all of its profits to investors. For the first quarter, Iron Mountain Incorporated (Delaware) REIT (NYSE:IRM) posted EPS of $0.24, missing estimates by $0.02, while its revenue of $939 million was up by 25% on the year and $10.4 million higher than expected.

In addition, the company paid a dividend of $0.55 per share in March, which translates into a dividend yield of 6.53%. Iron Mountain is well positioned to further reward its investors with high dividends. It serves over 200,000 customers in 45 countries, offering them over 85 million square feet of real estate spread across 1,400 facilities. Among the largest shareholders of Iron Mountain Incorporated (Delaware) REIT (NYSE:IRM) is Thomas Bancroft’s Makaira Partners, which held 1.64 million shares heading into the second quarter.

In Windstream Holdings, Inc. (NASDAQ:WIN), 21 funds from our database had amassed $117.23 million worth of its stock as of the end of March, compared to 13 funds and $61.16 million, respectively, a quarter earlier. The company issued a dividend of $0.15 per share in May, in line with the previous payment.  Windstream Holdings, Inc. (NASDAQ:WIN)’s stock has slid by over 39% year-to-date, which has pushed its dividend yield up to 13.45%. Among the reasons for the decline were two worse-than-expected financial reports. For the first quarter, Windstream posted a net loss of $0.89, missing estimates by $0.21, while its revenue of $1.37 billion was $170 million lower than expected. Nevertheless, some analysts consider the stock’s sell-off to be overdone. In May, Raymond James’ analyst Frank Louthan IV upgraded the stock to ‘Outperform’ from ‘Underperform’ with a price target of $5.25. The analyst believes that Windstream Holdings has the potential to improve its free cash flow once it completes the acquisition of Broadview Networks that was announced in April.

It looks like some investors are also taking a positive view of the company. Among its largest shareholders are two so-called “quant” funds led by billionaires: Jim Simons‘ Renaissance Technologies and Israel Englander’s Millennium Management. During the first quarter, Renaissance Technologies increased its stake by 140% to 10.85 million shares, while Millennium Management added 3.10 million shares to hold 3.13 million shares at the end of March.

Next in line is another REIT, Washington Prime Group Inc (NYSE:WPG), in which 22 funds held shares heading into the second quarter, compared to 14 funds a quarter earlier. The aggregate value of their positions also advanced to $69.83 million from $59.84 million during the first three months of 2017. The company is currently paying a dividend of $0.25 per share, which gives its stock a yield of 12.35%.  Washington Prime Group Inc (NYSE:WPG)’s stock is 22% in the red so far this year and has lost over 59% in the last five years. The reason for the poor performance could be the advance of online retail, with companies like Amazon.com, Inc. (NASDAQ:AMZN) taking the lead. As Washington Prime Group Inc (NYSE:WPG) specializes in operating retail real estate, there are fears that the demand for retail properties will decline, which is being fueled by the possible bankruptcy of Sears Holdings Corp (NASDAQ:SHLD) and the poor performance of other retailers like J C Penney Company Inc (NYSE:JCP).

In general, the trends among malls have been weakening, with low traffic and productivity suggesting that many locations will have to be closed before the situation stabilizes. However, Washington Prime Group Inc (NYSE:WPG) has a hedge against closures, which is the non-recourse mortgages on a vast majority of its properties. A non-recourse mortgage means that if the borrower defaults, the issuer can take the property, but cannot pursue the borrower for other compensation, even if the value of the property does not cover the full value of the defaulted loan. In addition, Washington Prime Group Inc (NYSE:WPG)’s dividend currently amounts to around 60% of its adjusted funds from operations, so it is well covered. This could explain why hedge funds have been piling into the stock. One of these funds is J. Alan Reid, Jr.’s Forward Management, which initiated a stake containing 2.86 million shares during the first quarter.

We’ll share the details of two other ultra high dividend stocks that are attracting smart money on the next page.