5 Dividend Stocks With Over 5% Yield

4. Lumen Technologies, Inc. (NYSE:LUMN)

Dividend yield as of February 27: 9.91%

Number of Hedge Fund Holders: 39

Lumen Technologies, Inc. (NYSE:LUMN), formerly known as CenturyLink, Inc., is another high-yielding dividend stock from the telecom sector. The company offers a dividend yield of 9.91%. Lumen Technologies, Inc. (NYSE:LUMN) offers tech and connectivity solutions from IT consulting to cloud connectivity. As of the end of December 2021, the company has approximately 4.5 million broadband subscribers. 

At the end of the fourth quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $1.08 billion in Lumen Technologies, Inc. (NYSE:LUMN). Knoll Capital Management held 100,000 shares of Lumen Technologies, Inc. (NYSE:LUMN) in Q4 2021, making the hedge fund firm the biggest stakeholder of the company. 

Here is what Longleaf Partners Small-Cap Fund Commentary has to say about Lumen Technologies, Inc. in its Q4 2021 investor letter:

“Lumen (39%, 4.22%; 3%, 0.38%), the global fiber company, was the top absolute and relative contributor for the year. CEO Jeff Storey took two actions this year to substantially increase the business’s value and address the stock’s enormous discount (it trades below 35% of our appraisal value). First, during the third quarter, Lumen sold its Latin American fiber for a good price (9x EBITDA) and the weaker half of its US consumer business for an encouraging 5.5x EBITDA. Both multiples came in above our appraisals and demonstrate how cheap the consolidated Lumen RemainCo is today at less than 6x P/FCF and EV/EBITDA. The majority of Lumen’s remaining EBITDA comes from its US Enterprise and SMB segments, which grow faster than Lumen’s disposed LatAm fiber and are worth higher multiples. The weakest segment of the new Lumen, the western half of Consumer, is superior to the assets the company just sold for 5.5x EBITDA. Second, Storey quickly repurchased 7% of Lumen’s shares, adding meaningfully to value per share and free cash flow per share. When the dispositions close, proceeds will reduce debt meaningfully, putting net debt right at the company’s leverage ratio target even though that target was based on the prior, inferior business mix. We are pleased that our engagement since filing an amended 13D helped the company begin to deliver positive corporate actions. The market has fixated on the potential for another dividend cut, but Lumen’s FCF is more than sufficient to cover the $1/share payout while investing aggressively into high-return, edge-out CAPEX to grow revenues.”