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JPMorgan’s Top Dividend Stocks for 2016, Part 2

EPR Properties (NYSE:EPR)

– Number of Hedge Fund Holders (as of September 30): 18
– Total Value of Hedge Fund Holdings (as of September 30): $184.12 million
– Hedge Fund Holdings as Percent of Float (as of September 30): 6.20%

Seeing as EPR Properties (NYSE:EPR)’s dividend growth has historically been in-line with its earnings growth (it is a REIT after all), and its income is expected to grow by around 6-7% next year, EPR’s forward dividend yield of 6.8% is too attractive to ignore. The analysts at JP Morgan have a $65 price target and an ‘Overweight’ rating. Hedge fund sentiment is becoming more optimistic, with 18 funds long the stock at the end of the third quarter, up from 15 at the end of the second quarter. John Osterweis‘ Osterweis Capital Management had a stake of 1.19 million shares as of the latest 13F reporting period, making up 2.78% of the fund’s portfolio.

FirstEnergy Corp. (NYSE:FE)

– Number of Hedge Fund Holders (as of September 30): 24
– Total Value of Hedge Fund Holdings (as of September 30): $558.36 million
– Hedge Fund Holdings as Percent of Float (as of September 30): 4.20%

Although FirstEnergy Corp. (NYSE:FE) shares haven’t done well in 2015 with its stock down by 17% year-to-date, JP Morgan feels FirstEnergy’s management’s steps to de-lever the balance sheet and cut costs will go a long way in helping the stock bounce back. With the cost cutting and the paying-down of debt, FirstEnergy should have more cash flow that will make more investors take notice of the company’s low forward P/E of 11 and dividend yield of 4.64%. Among the FirstEnergy bulls is esteemed quant Cliff Asness’ AQR Capital Management which owned 943,570 shares at the end of September.

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Foresight Energy LP (NYSE:FELP)

– Number of Hedge Fund Holders (as of September 30): 3
– Total Value of Hedge Fund Holdings (as of September 30): $5.31 million
– Hedge Fund Holdings as Percent of Float (as of September 30): 0.80%

Investors haven’t been bullish on Foresight Energy LP (NYSE:FELP), as anything coal-related has been aggressively sold off due to the low natural gas prices and increased government emphasis on renewable energy. Because of those factors, shares of the company are down 80% year-to-date. In an outdated note, the analysts at JPMorgan are bullish, as they note Foresight’s costs should head South as its low-cost Hillsboro mine comes back online and as management unlocks synergies with the company’s Murray operations. Although the analysts at JPMorgan think the dividend is sustainable, the company has since put out a statement, saying that ‘it is likely that we will suspend the distribution on our common units, commencing with the quarter ending December 31, 2015’.

Disclosure: none

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