It is commonly known that investors pour capital into stocks for two principal reasons: annual income and long-term capital appreciation. Numerous public companies pay out a portion of their income to shareholders in the form of dividends, though some companies may opt for retaining those profits to reinvest them into growing their businesses. Long-term capital growth occurs when a firm’s share price appreciates over time. Hence, investors of all scales buy equities to receive annual income in the form of dividends, gain on stock price appreciation, or profit from a combination of the two. Having said that, the Insider Monkey team decided to lay out a list of dividend stock, known as income stocks, owned by billionaire value investor Mario J. Gabelli, the founder of GAMCO Investors. GAMCO Investors has over $39.6 billion in assets under management as of September 30, 2015. His contrarian investing approach of acquiring shares of undervalued companies and holding onto them for a long horizon has been very successful over the years. An institutional client who invested $10 million in GAMCO in 1978, when the firm was founded, would have had $2.2 billion in March 2015, excluding fees. Meanwhile, a similar investment in the S&P 500 would have yielded only $645 million over the same time span. With that in mind, let’s proceed to the discussion of Mr. Gabelli’s top dividend picks as of the end of 2015.
At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
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Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP)
– Shares Owned by GAMCO Investors (as of December 31): 4.67 Million
– Value of GAMCO’s Holding (as of December 31): $241.34 Million
– Dividend Yield: 5.79%
GAMCO Investors cut its position in Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP) by 102,944 shares or 2% during the December quarter to 4.67 million shares, which were valued at $241.34 million at the end of the year. The shares of the real estate investment trust (REIT) specializing in destination hotel assets in urban and resort markets are down 18% over the past 52 weeks. The REIT’s portfolio of assets includes four upscale, meetings-focused resorts managed by its lodging operator Marriott under the Gaylord Hotels brand. In December 2015, the REIT’s Board of Directors declared a cash dividend of $0.70 per share for the fourth quarter of 2015, which generates an annual dividend yield of 5.79%. Ryman Hospitality Properties generated revenues of $780.00 million during the first three quarters of 2015, up from $749.38 million generated in the same period of the prior year. The REIT’s net income for the nine months that ended September 30 increased 13.9% year-over-year to $72.61 million. A number of 17 hedge funds tracked by Insider Monkey were invested in the REIT at the end of December 2015, amassing 17.20% of its outstanding common stock. Zac Hirzel’s Hirzel Capital Management disclosed owning 1.14 million shares of Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP) through its latest 13F.