We track 13F filings from hedge funds and other notable investors as part of our work researching investing strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by 18 percentage points per year on average). We can also use our database to look at individual funds’ filings and see their favorite stocks in a number of areas, including those which pay high dividend yields. Blindly following these managers isn’t always wise but 13Fs can be a useful source of ideas for further research. Read on for five of billionaire David Harding’s Winton Capital Management’s top picks as of the end of December with dividend yields of 4% or higher (or see the full list of stocks Winton reported owning)
The fund’s largest holding by market value was its approximately 780,000 shares of Consolidated Edison, Inc. (NYSE:ED). The $18 billion market cap utility pays a dividend yield of 4% at current prices and dividend levels. As might be expected for a utility the stock’s beta is also low, at 0.1, making Consolidated Edison, Inc. (NYSE:ED) a decent choice for defensive investors as well. At 16 times earnings it may be a bit expensive for a low-to-no-growth company for a pure value investor, however. Renaissance Technologies, founded by billionaire Jim Simons, owned 1.3 million shares at the end of December (find Renaissance’s favorite stocks).
Harding and his team increased their stake in Verizon Communications Inc. (NYSE:VZ) by 14% to a total of about 960,000 shares. Verizon is reportedly considering buying full ownership of Verizon Communications Inc. (NYSE:VZ) Wireless, which is currently minority owned by Vodafone Group Plc (ADR) (NYSE:VOD); some have even speculated that Verizon Communications Inc. (NYSE:VZ) might acquire the entire company. Read more about potential deals between Verizon and Vodafone. Currently Verizon Communications Inc. (NYSE:VZ) pays a 4.2% dividend yield, and it too is a decent defensive choice with a beta of 0.3. The company grew its revenues by 6% in the fourth quarter of 2012 versus a year earlier.
Ameren Corp (NYSE:AEE), an $8.4 billion market cap utility, was another of Winton’s favorite stocks with the filing disclosing ownership of about 990,000 shares. The dividend yield here is high even for a utility, at 4.6%, though of course that market capitalization makes Ameren Corp (NYSE:AEE) smaller than many of its peers. The company also experienced a decline in sales in its most recent quarter compared to the same period in the previous year. Billionaire Israel Englander’s Millennium Management was buying shares of Ameren between October and December (check out Englander’s stock picks).