High Yield Stocks Overrated? How Hedge Funds Are Trading High Yielders

Another attractive high-yielding dividend stock is SunCoke Energy Partner L.P. (NYSE:SXCP), which has a current dividend yield of 10.6%, paying out an annual dividend of $2.29. The number of hedge fund firms that hold equity stakes in this company increased to 9 from 7 during the first quarter, while the value of the overall investments climbed to $29.32 million from $24.24 million. SunCoke Energy has a strong record of paying out dividends, as it represents an MLP (a publicly traded partnership) that pays out all its earnings to unit holders in the form of cash distributions. Even more to that, these cash distributions are liable to more favorable tax treatment than corporate dividends. SunCoke Energy has recently paid a dividend of $0.5715 per share, which yielded an increase of 5.8% from its prior dividend of $0.54. However, the shares of SunCoke have plummeted by over 32% year-to-date, as in the case of the previous stock, and are currently trading at around $18.24 per share. From the pool of over 700 hedge funds that we track, Stuart J. Zimmer’s Zimmer Partners is the second-largest investor in SunCoke Energy Partner L.P. (NYSE:SXCP), with 380,895 shares, tailing Michael Rothenberg and David Sackler’s Moab Capital Partners.

Our list of high dividend-paying stocks is concluded with Northern Tier Energy LP (NYSE:NTI). Northern Tier Energy is currently paying out an annualized dividend of $4.32, while its dividend yield reaches an impressive figure of 17.2%. However, it is worth mentioning that the dividend stability is not entirely great, as it experienced both ups and downs throughout the last two years. The company paid a quarterly dividend of $0.49 during the quarter prior to this one, so it’s not quite sure whether Northern Tier Energy will keep paying the same dividend of $1.08 per share. Ten hedge fund firms own equity holdings in Northern Tier Energy as of the end of the most recent quarter, compared to 12 in the quarter prior to that. The value of these holdings plummeted as well, decreasing to $47.24 million from $157.36 million. In the meantime, the shares of this energy company have achieved a gain of nearly 12% since the beginning of the current year, which surely didn’t disappoint its investors. Within our database, Steve Galbraith’s Herring Creek Capital is among the largest shareholders in Northern Tier Energy LP (NYSE:NTI), with 543,768 shares.

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