Billionaire Leon Cooperman’s Dividend Picks Include Kinder Morgan

Linn Energy LLC (NASDAQ:LINE), an $8.9 billion market cap oil and gas exploration and production company, was another high yielding energy play in the fund’s portfolio. Omega cut its stake slightly but still owned 4.3 million shares according to the 13F. Linn’s business has not been performing well recently, likely in part because of natural gas prices: sales fell 23% in the fourth quarter of 2012 versus a year earlier. Renaissance Technologies, whose success since inception has made founder Jim Simons a multi-billionaire, was buying Linn last quarter (check out more stocks Renaissance was buying).

Omega disclosed a position of nearly 14 million shares in KKR Financial Holdings LLC (NYSE:KFN), which invests in high yield debt (including junk debt and mezzanine loans) as well as private equity. The dividend yield is above 7%, as the interest rates on many of the loans it holds as assets are high as well. Cooperman’s son Wayne is also a hedge fund manager, heading Cobalt Capital; that fund owned 3.3 million shares of KKR Financial Holdings according to its own 13F.

A third pipeline company, Williams Companies, Inc. (NYSE:WMB), was included among the fund’s income stock picks. Williams owns a number of midstream natural gas assets including gathering and transportation pipelines. The stock looks pricy at trailing and forward earnings multiples of 25 and 23, respectively, but as with the other pipeline companies we’ve discussed there is potential for growth as natural gas becomes a larger player in the U.S. economy as well as a good dividend yield (about 4% in this case). Billionaire Andreas Halvorsen’s Viking Global had over 19 million shares in its portfolio at the end of 2012 (research more stocks Viking Global owns).

Disclosure: I own no shares of any stocks mentioned in this article.