Six to seven weeks after the end of each fiscal quarter, hedge funds are required to file 13Fs with the SEC. These filings disclose many of their long equity positions in U.S. stocks, with the most recent round of filings doing so for the end of December. Even with the inherent delay in these filings, the information included in them can still be useful to investors; we have found that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year (learn more about our small cap strategy). We can also narrow our focus to filings from top investors to see what they are thinking about different groups of stocks. Here are five stocks that billionaire Leon Cooperman’s Omega Advisors had over $100 million invested in and which pay a dividend yield of at least 4% according to current prices and recent dividend payments (or see the full list of Cooperman’s stock picks):
One of the fund’s five largest holdings by market value was Kinder Morgan Inc (NYSE:KMI), which pays a dividend yield of just over 4%. Omega owned 5 million shares of Kinder Morgan at the end of 2012. Bain Capital’s Brookside Capital had a similarly sized position in the pipeline company, which transports natural gas and refined petroleum products among other liquids and gases. The market has been bidding up the company’s earnings multiples, and Kinder Morgan actually trades at 26 times consensus earnings for 2014. Kinder Morgan acquired El Paso last year to grow its pipeline business.
Cooperman also owned a little over 5 million shares of Atlas Pipeline Partners, L.P. (NYSE:APL), a midstream natural gas company which owns pipelines and processing plants. Atlas pays a yield of 7% going by recent dividend payments from the company. We would note that the stock has a high beta, at 2.1, but has fallen 11% in the last year against a rising market. Revenue has also been about flat. Balyasny Asset Management, a $2 billion hedge fund managed by Dimitry Balyasny, initiated a position of 1.1 million shares between October and December (find Balyasny’s favorite stocks).
Here are three more stocks Omega owned which pay high yields: