Several weeks after the end of each quarter, hedge funds and other major investors are required to file 13Fs with the SEC, disclosing many of their long equity positions. We track these filings as part of our work developing investing strategies; we have found, for example, that the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy). We can also use our database to see which stocks fund managers like in a number of areas, including stocks with high dividend yields. Here are five stocks which billionaire Israel Englander’s Millennium Management owned at the end of December which pay dividend yield of 3.5% or higher according to current prices and recent dividend policy (or see the full list of stocks from the fund’s 13F):
The fund reported a position of 2.2 million shares in PPL Corporation (NYSE:PPL), a $19 billion market cap electric and natural gas utility operating in Kentucky, Pennsylvania, and the U.K. The dividend yield is quite high, even for a utility, at 4.7%; however, this looks to be at least in part due to weaker financials as revenue and net income both decreased by about 20% in PPL’s most recent quarter compared to the same period in the previous year. Fellow billionaire Glenn Dubin’s Highbridge Capital Management initiated a position of about 440,000 shares in the fourth quarter (check out Dubin’s stock picks).
Englander and his team were heavy buyers of Ameren Corp (NYSE:AEE), a utility serving customers in Missouri and Illinois, and closed December with 1.8 million shares of the stock in their portfolio. Winton Capital Management, managed by David Harding, had about 990,000 shares according to that fund’s own 13F (research more stocks Winton likes). Ameren Corp (NYSE:AEE)’s yield is quite strong at 4.6%, and as with most utilities its beta is low at 0.2. So it too could be considered as an income or defensive stock pick, though like PPL the company experienced a decline in revenue during Q4 from its levels a year ago.