Dividend Stocks attract investors due to their attractive yields and regular cash flows. Traditional fixed income instruments such as bonds and treasuries are losing their appeal owing to their very low yields. In general, central banks have been consistently reducing interest rates which have made the investor community look for better and more lucrative options elsewhere. Having said that, it is important to study the company’s business model and competitive strengths to understand whether the dividend flow is sustainable. In the article below, we will analyze Leon Cooperman‘s Omega Advisors’ top holdings that have a dividend yield of at least 3%. Following hedge fund managers’ investment strategy could be wise for investors since these managers have extensive knowledge and experience of investing.
Billionaire Leon Cooperman’s founded Omega Advisors in 1991 after having worked for 25 years at Goldman Sachs. The fund reported an equity portfolio worth $3.24 billion as of the end of September, which is well diversified with a 22% allocation to the technology sector, 18% – to finance and 13% – to consumer discretionary stocks.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs (see more details).
Though Omega Advisors cut its stake in Navient Corp (NASDAQ:NAVI) by selling 2.48 million shares during the third quarter, the position was the fund’s second largest, as Omega held 11.32 million shares worth $163.78 million at the end of September. The stock of Navient Corp has an attractive dividend yield of 3.81%. For the third quarter, Navient Corp (NASDAQ:NAVI) reported earnings of $0.50 per share on revenue of $405 million beating analysts’ estimates of $0.48 and $392.75 million, respectively. According to our data, 30 investors held $366 million worth of Navient Corp (NASDAQ:NAVI)’s stock at the end of the third quarter, versus 32 funds with stakes worth $400 million at the end of June.
Dow Chemical Co (NYSE:DOW) constituted 2.49% of Omega Advisors’ 13F portfolio as the fund held 1.56 million shares worth $80.74 million. Dow Chemical’s stock sports a dividend yield of 3.15% is currently trading very close to its 52-week high has returned more than 12% in the last six months outperforming the S&P index that has returned 9% over the same period. Analysts expect the company to report EPS of $0.97 for the fourth quarter. For the third quarter, Dow Chemical Co (NYSE:DOW) posted EPS of $0.91, which topped the estimates by 13.75%. In more recent news, Dow Chemical Co’s (NYSE:DOW)’s CEO, Andrew N. Liveris, was named as the head of the American Manufacturing Council by the President-elect Donald Trump. Though the number hedge funds that we track long Dow Chemical Co (NYSE:DOW) inched down by 1 to 47 during the third quarter, the value of their holdings increased by 5.85% to $2.68 billion.
Omega Advisors nearly halved its stake in Chimera Investment Corporation (NYSE:CIM) by unloading 2.65 million shares during the third quarter and held 2.94 million shares valued at $46.9 million at the end of September. Arrowstreet Capital is another investor bullish on Chimera Investment Corporation (NYSE:CIM), holding 2.6 million shares worth $41.9 million according to its latest 13F. Chimera Investment Corporation (NYSE:CIM)’s stock has advanced by more than 22% year-to-date and, since it is a REIT, its stock sports a dividend yield of 11.72% as the company has recently raised its dividend to $0.50 from $0.48. The hedge fund sentiment towards the stock has been overall a bit bearish with 11 funds tracked by us having amassed $106 million worth of stock at the end of the third quarter, down from 13 funds owning $117 million worth stock a quarter earlier.
Omega Advisors sold 190,309 shares of New Media Investment Group Inc (NYSE:NEWM) and reported ownership of 2.98 million shares valued at $49 million in its latest 13F. The stock’s performance has been quite dismal this year with the stock losing over 18% year-to-date, but it has a dividend yield of 8.86%, based on the quarterly dividend of $0.35 per share, up from the previous $0.33. The stock has been rated a hold by most analysts. At the end of September, 17 funds from our database were bullish on New Media Investment Group, having amassed $68 million worth of stock, which represented around 10% of the company’s float.
Omega Advisors reported holding 1.23 million shares of Energy Transfer Partners LP (NYSE:ETP) worth $45.8 million as as of the end of September, after selling 116,541 shares during the quarter. Another investor bullish on the stock is David Tepper’s Appaloosa Management, which held 11.6 million shares of Energy Transfer Partners LP (NYSE:ETP) at the end of September. This master limited partnership is engaged in the midstream and intrastate transportation and storage of natural gas. The company’s stock has a dividend yield of 12.31% based on the $1.055 quarterly dividend that has been unchanged over the last five quarter. In November, Energy Transfer Partners LP (NYSE:ETP) announced a merger agreement with Sunoco Logistics Partners L.P. (NYSE:SXL). While the number of funds from our system owning Energy Transfer Partners LP (NYSE:ETP) remained the same at 22, the value of their holdings increased by 14.7% to $956 million during the third quarter.