In this article, we discuss 10 low beta dividend stocks with high yields.
It is often stated that high risk leads to higher reward. However, either all investors do not have the appetite for risky bets or they do not have the finances to select volatile stocks and risk losing their investment. For traders with a long-term investment horizon, stocks with low volatility are the way to go, since they can passively manage a portfolio over the years as the stock performance is stable.
Some industries in particular are more volatile. For example, the technology sector with stocks like Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) experiences greater market volatility as opposed to the consumer discretionary and utilities sector, with stable, low beta companies like The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and Consolidated Edison, Inc. (NYSE:ED).
The Fed will keep on hiking interest rates quarterly according to market reports, and investors who solely rely on their stock portfolio for passive income do not have the liberty to buy the market dips, unlike investors who are just starting out and have 20-30 years till retirement. For a stable portfolio during the interest rate and inflationary crisis that the stock market is facing, it is wise to hold a diverse portfolio with low beta dividend stocks that generate reliable returns.
Low beta dividend stocks like Verizon Communications Inc. (NYSE:VZ), The Coca-Cola Company (NYSE:KO), and Lockheed Martin Corporation (NYSE:LMT) are highly popular among the smart investor circles.
Photo by lucas Favre on Unsplash
Our Methodology
We selected high dividend for this article, ensuring that the beta value for each stock was less than 1. We have ranked the companies according to the dividend yield, from lowest to highest.
For each stock, the hedge fund sentiment, latest dividend payout, and available analyst ratings are also discussed.
Low Beta Dividend Stocks with High Yields
10. Phillips 66 Partners LP (NYSE:PSXP)
Dividend Yield as of January 26: 8.18%
Number of Hedge Fund Holders: 5
Beta Value: 0.86
Phillips 66 Partners LP (NYSE:PSXP) is a Texas-based company that owns and operates a portfolio of midstream assets and supplies crude oil, refined petroleum products, and natural gas liquids. The company exceeded market consensus estimates for earnings and revenue in Q3 2021.
On January 19, Phillips 66 Partners LP (NYSE:PSXP) declared a quarterly dividend of $0.875 per share, in line with previous. The dividend is payable on February 14, to shareholders of record on January 31. As of January 26, Phillips 66 Partners LP (NYSE:PSXP) delivers a dividend yield of 8.18%.
Mizuho analyst Gabriel Moreen on January 12 raised the price target on Phillips 66 Partners LP (NYSE:PSXP) to $43 from $41 and kept a Neutral rating on the shares.
Phillips 66 Partners LP (NYSE:PSXP) announced its 2022 capital program of $1.9 billion on December 10, which includes $992 million for sustaining capital and $916 million for growth capital. The company management indicated that approximately 45% of the growth capital supports lower-carbon opportunities, and it continues to prioritize debt reduction and returns to shareholders.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 5 funds were bullish on Phillips 66 Partners LP (NYSE:PSXP), with stakes totaling $31.68 million. Zimmer Partners is the biggest stakeholder of Phillips 66 Partners LP (NYSE:PSXP) as of September 2021, with 838,717 shares worth $30 million.
9. Lumen Technologies, Inc. (NYSE:LUMN)
Dividend Yield as of January 26: 8.32%
Number of Hedge Fund Holders: 25
Beta Value: 0.93
Lumen Technologies, Inc. (NYSE:LUMN) is an American technology and communications company that serves business and residential customers, offering IP and data services, VPN data network, ethernet, internet protocol, and content delivery services.
Lumen Technologies, Inc. (NYSE:LUMN) on November 18 declared a $0.25 per share quarterly dividend, in line with previous. The dividend was paid on December 10, to shareholders of record on November 29. As of January 26, Lumen Technologies, Inc. (NYSE:LUMN)’s dividend yield came in at 8.32%.
On December 9, the U.S. Army Reserve Command selected Lumen Technologies, Inc. (NYSE:LUMN) to provide virtual private network services, including remote access solutions, to more than 650 army reserve locations across the country. The 11-year task order is worth $23 million and was awarded under the General Services Administration’s 15-year, $50 billion Enterprise Infrastructure Solutions program.
Citi analyst Michael Rollins upgraded Lumen Technologies, Inc. (NYSE:LUMN) on November 4 to Neutral from Sell with a $13 price target following its Q3 results. Lumen Technologies, Inc. (NYSE:LUMN) surprised with its revised capital allocation plan, “while again reporting generally underwhelming results”. The analyst thinks maintaining the dividend combined with the accelerated repurchase of 7.5% of outstanding shares “are likely to support the stock.”
Among the hedge funds monitored by Insider Monkey in Q3 2021, Knoll Capital Management is a prominent stakeholder of Lumen Technologies, Inc. (NYSE:LUMN), with 100,000 shares worth $1.2 million. Overall, 25 hedge funds were bullish on Lumen Technologies, Inc. (NYSE:LUMN) in the third quarter of 2021.
Lumen Technologies, Inc. (NYSE:LUMN) is a notable low beta dividend stock, in addition to Verizon Communications Inc. (NYSE:VZ), The Coca-Cola Company (NYSE:KO), and Lockheed Martin Corporation (NYSE:LMT).
Here is what Longleaf Partners Small-Cap Fund Commentary has to say about Lumen Technologies, Inc. (NYSE:LUMN) 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.”
8. Broadmark Realty Capital Inc. (NYSE:BRMK)
Dividend Yield as of January 26: 9.04%
Number of Hedge Fund Holders: 11
Beta Value: 0.75
Broadmark Realty Capital Inc. (NYSE:BRMK) is a real estate investment trust that offers short-term loans secured to finance the acquisition or development of residential or commercial properties. Broadmark Realty Capital Inc. (NYSE:BRMK) has funded over 1200 real estate loans, funding an aggregate amount of approximately $2.8 billion.
Broadmark Realty Capital Inc. (NYSE:BRMK) on January 14 declared a $0.07 per share monthly dividend, in line with previous. The dividend is payable on February 15, to shareholders of record on January 31. Broadmark Realty Capital Inc. (NYSE:BRMK)’s dividend yield on January 26 came in at $9.04%.
In the third quarter of 2021, 11 hedge funds were bullish on Broadmark Realty Capital Inc. (NYSE:BRMK), with stakes totaling $71.52 million, as compared to 12 funds holding stakes worth $91.1 million in Broadmark Realty Capital Inc. (NYSE:BRMK) in the preceding quarter.
Thomas Steyer’s Farallon Capital is the largest Broadmark Realty Capital Inc. (NYSE:BRMK) stakeholder as of Q3 2021, owning approximately 5 million shares, valued at $48.8 million.
7. DallasNews Corporation (NASDAQ:DALN)
Dividend Yield as of January 26: 9.24%
Number of Hedge Fund Holders: 4
Beta Value: 0.61
DallasNews Corporation (NASDAQ:DALN) is a Texas-based local news and information publishing company, operating related news websites and mobile applications. DallasNews Corporation (NASDAQ:DALN) delivers a dividend yield of 9.24% as of January 26.
On December 2, DallasNews Corporation (NASDAQ:DALN) declared a quarterly dividend of $0.16 per share, in line with previous. The dividend is payable on March 4, to shareholders of record on February 11.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 4 hedge funds were bullish on DallasNews Corporation (NASDAQ:DALN), with stakes totaling $3 million.
Elite hedge funds are leaning towards DallasNews Corporation (NASDAQ:DALN) for a reliable income portfolio, just like they choose to hold stakes in Verizon Communications Inc. (NYSE:VZ), The Coca-Cola Company (NYSE:KO), and Lockheed Martin Corporation (NYSE:LMT).
6. Chimera Investment Corporation (NYSE:CIM)
Dividend Yield as of January 26: 9.32%
Number of Hedge Fund Holders: 16
Beta Value: 0.95
Chimera Investment Corporation (NYSE:CIM) is a New York-based real estate investment trust that holds a portfolio of mortgage assets, including residential mortgage loans, commercial mortgage loans, and other real estate related securities.
On December 2, Chimera Investment Corporation (NYSE:CIM) declared a quarterly dividend of $0.33 per share, in line with previous. The dividend was paid on January 27, to shareholders of record on December 30. Chimera Investment Corporation (NYSE:CIM) delivers a dividend yield of 9.32% as of January 26.
Barclays analyst Mark DeVries raised the price target on Chimera Investment Corporation (NYSE:CIM) on January 10 to $14 from $11 and kept an Underweight rating on the shares. The analyst expects a “strong” economy and housing market to result in solid fundamentals for consumer finance not levered to refinance activity.
Arrowstreet Capital is the largest Chimera Investment Corporation (NYSE:CIM) stakeholder as of Q3 2021, with 4.8 million shares worth $71.6 million. Overall, 16 hedge funds tracked by Insider Monkey reported owning stakes in Chimera Investment Corporation (NYSE:CIM) in the third quarter of 2021, totaling $155.6 million.
5. AGNC Investment Corp. (NASDAQ:AGNC)
Dividend Yield as of January 26: 9.68%
Number of Hedge Fund Holders: 16
Beta Value: 0.93
AGNC Investment Corp. (NASDAQ:AGNC) is an American REIT investing in residential mortgage securities and collateralized mortgage obligations which are guaranteed by a United States government-sponsored enterprise. AGNC Investment Corp. (NASDAQ:AGNC) delivers a yield of 9.68%, which makes it one of the top low beta dividend stocks with a high yield.
On January 10, AGNC Investment Corp. (NASDAQ:AGNC) declared a $0.12 per share monthly dividend, in line with previous. The dividend is payable on February 9, for shareholders of record on January 31.
Piper Sandler analyst Kevin Barker lowered the price target on AGNC Investment Corp. (NASDAQ:AGNC) to $16 from $16.50 and kept a Neutral rating on the shares on January 5. The analyst expects Q4 mortgage banking earnings to be under pressure amid increasing competitive pressures across all channels due to reduced seasonal demand combined with excess capacity. He recommends investors to opt for originators with “valuation support, relatively large servicing fee streams, and the potential for company-specific catalysts.”
In Q3 2021, among the hedge funds tracked by Insider Monkey, Canyon Capital Advisors is the biggest stakeholder of AGNC Investment Corp. (NASDAQ:AGNC), with 3.3 million shares worth $52.71 million. Overall, 16 hedge funds in the third quarter database of Insider Monkey were long AGNC Investment Corp. (NASDAQ:AGNC), with stakes equaling $81.4 million.
4. Green Plains Partners LP (NASDAQ:GPP)
Dividend Yield as of January 26: 11.62%
Number of Hedge Fund Holders: 3
Beta Value: 0.75
Offering fuel storage and transportation services in the United States, Green Plains Partners LP (NASDAQ:GPP) owns and manages fuel storage facilities, terminals, transportation assets, and similar assets. Stifel analyst Selman Akyol on August 3 upgraded Green Plains Partners LP (NASDAQ:GPP) to Buy from Hold with a price target of $16, up from $13.
Green Plains Partners LP (NASDAQ:GPP) on January 21 declared a quarterly dividend of $0.44 per share, which is a 1.1% increase from its prior dividend of $0.43. The dividend will be paid on February 11, to shareholders of record on February 4. Green Plains Partners LP (NASDAQ:GPP) offers a dividend yield of 11.62% as of January 26.
In the third quarter of 2021, 3 hedge funds in the database of Insider Monkey reported owning stakes in Green Plains Partners LP (NASDAQ:GPP), valued at $28.7 million. Jeff Osher’s No Street Capital is the largest stakeholder of the company, with 2.1 million shares worth $28.1 million.
3. Mesabi Trust (NYSE:MSB)
Dividend Yield as of January 26: 11.71%
Number of Hedge Fund Holders: 5
Beta Value: 0.59
Mesabi Trust (NYSE:MSB) is a New York-based royalty trust that derives its primary income from an iron mine based in Minnesota. Since Mesabi Trust (NYSE:MSB) is not taxed as a corporation for income tax purposes, it is not allowed to partake in any business activity except for the collection and distribution of royalties and payment of expenses.
Mesabi Trust (NYSE:MSB) on January 21 declared a $1.75 per share quarterly dividend, which is a 23.2% increase from its prior dividend of $1.42. The dividend is payable on February 20, to shareholders of record on January 30.
According to the third quarter database of Insider Monkey, 5 hedge funds were bullish on Mesabi Trust (NYSE:MSB), with stakes totaling $76.1 million. Murray Stahl’s Horizon Asset Management is the largest Mesabi Trust (NYSE:MSB) stakeholder, owning 1.97 million shares worth $58.5 million.
Here is what Horizon Kinetics has to say about Mesabi Trust (NYSE:MSB) in its Q2 2021 investor letter:
“Also shown was the highest form of asset-light business, which is a hard-asset company, like Mesabi Trust; its revenues come directly from the asset itself, as processed by third parties. With no operating expenditures required, they are passive beneficiaries of any increase in the price of the commodity and any increase in production volumes by the third parties that bear the capital investment and operating costs. No other business model can replicate that level of profitability.”
2. ARMOUR Residential REIT, Inc. (NYSE:ARR)
Dividend Yield as of January 26: 12.90%
Number of Hedge Fund Holders: 6
Beta Value: 0.93
ARMOUR Residential REIT, Inc. (NYSE:ARR) is a Florida-based real estate investment trust that invests in residential mortgage backed securities in the United States, which are usually guaranteed by a government-sponsored entity.
On January 4, ARMOUR Residential REIT, Inc. (NYSE:ARR) declared a $0.10 per share monthly dividend, in line with previous. The dividend will be paid on January 28, to shareholders of record on January 18. ARMOUR Residential REIT, Inc. (NYSE:ARR) delivers a dividend yield of 12.90% as of January 26.
JonesTrading analyst Jason Stewart downgraded ARMOUR Residential REIT, Inc. (NYSE:ARR) on October 28 to Hold from Buy and removed his prior price target after ARMOUR Residential REIT, Inc. (NYSE:ARR)’s distributable earnings miss. He sees the risk versus reward as balanced at current levels for ARMOUR Residential REIT, Inc. (NYSE:ARR), with the shares trading at book value.
In Q3 2021, ARMOUR Residential REIT, Inc. (NYSE:ARR)’s largest stakeholder was Two Sigma Advisors, with 1.3 million shares worth $14.4 million. Overall, 6 hedge funds were bullish on ARMOUR Residential REIT, Inc. (NYSE:ARR), down from 13 funds in the preceding quarter.
1. Icahn Enterprises L.P. (NASDAQ:IEP)
Dividend Yield as of January 26: 15.19%
Number of Hedge Fund Holders: 4
Beta Value: 0.82
Icahn Enterprises L.P. (NASDAQ:IEP) is a Florida-based conglomerate company that invests in multiple sectors including energy, automotive, food packaging, metals, real estate, and home fashion. American investor Carl Icahn owns 95% of Icahn Enterprises L.P. (NASDAQ:IEP).
On November 2, Icahn Enterprises L.P. (NASDAQ:IEP) declared a $2.00 per share quarterly dividend, in line with previous. The dividend was paid on December 22, for shareholders of record on November 16. Icahn Enterprises L.P. (NASDAQ:IEP) offers a dividend yield of 15.19% on January 26.
Carl Icahn’s Icahn Capital LP is the largest stakeholder of Icahn Enterprises L.P. (NASDAQ:IEP) as of Q3 2021, owning 247.1 million shares worth $12.3 billion. Overall, 4 hedge funds were bullish on Icahn Enterprises L.P. (NASDAQ:IEP) in the third quarter, with stakes totaling $12.38 billion.
You can also take a look at Billionaire Ken Fisher is Selling These 10 Stocks and Top 10 Dividend Increases of 2021.
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Stocks Gaining Attention After Posting Earnings Reports
- 10 Best Dividend Contenders to Buy for 2022
- 10 High Yield Dividend Kings for 2022
Disclosure: None. 10 Low Beta Dividend Stocks with High Yields is originally published on Insider Monkey.
