4 Coal Stocks that Pay Dividends

3.  Vale S.A. (NYSE:VALE)

Number of Hedge Fund Holders: 27

Dividend Yield as of August 19: 22.27%  

Vale S.A. (NYSE:VALE) markets iron ore products. The firm posted earnings for the second quarter of 2022 on July 29, reporting earnings per share of $1.32, beating market estimates by $0.52. The revenue over the period was $11.6 billion, down more than 33% compared to the revenue over the same period last year and missing analyst expectations by $450 million. In February, the firm had declared an interim dividend of $0.73 per share. More than $3.5 billion were disbursed to shareholders through the payout. 

On June 22, Morgan Stanley analyst Carlos De Alba maintained an Equal Weight rating on Vale S.A. (NYSE:VALE) stock and lowered the price target to $16 from $22, noting that decreasing iron ore prices would weigh on the shares of the firm in the near term. 

At the end of the second quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in Vale S.A. (NYSE:VALE), the same as in the preceding quarter worth $2.3 billion. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Vale S.A. (NYSE:VALE), with 22 million shares worth more than $324 million.  

In its Q1 2022 investor letter, Grantham Mayo Van Otterloo & Co. LLC, an asset management firm, highlighted a few stocks and Vale S.A. (NYSE:VALE) was one of them. Here is what the fund said:

“Let’s look at Vale S.A. (NYSE:VALE), the world’s largest iron ore producer, as a case study for how shareholders can be rewarded. Vale’s stock price is about where it was at the beginning of last year. Despite the market’s lack of enthusiasm, the company generated about $20 billion of free cash flow last year. Not bad for a company with a market cap of a little over $100 billion and no substantive debt as of the end of March. 4 What did the company do with all that cash? Last year, Vale S.A. (NYSE:VALE) paid out about $9 billion in regularly scheduled dividends and distributed another $10 billion between extra dividends and share repurchases. Combined with dividends distributed in the first quarter of this year and a recently announced share repurchase, Vale has returned or announced the return of over $33 billion since the beginning of last year, almost a 32% yield relative to the market cap of the company. Not a bad way to win.”