Generally, insiders buy stock in their own company when they feel confident about the company’s market prospects and outlook. Sometimes insiders buy stock in their own companies so as to show commitment to working to enhance shareholder value over time. Historically, stocks bought by insiders have tended to outperform broad benchmarks over time; discover the secrets of insider trading here.
The following represents a selection of five dividend-paying stocks with yields above 2.0% that have recently recorded meaningful insider buying activity. The list includes Pitney Bowes Inc. (NYSE:PBI), which recently ended its multi-decade streak of interrupted dividend increases by cutting its dividend in half, and Myers Industries, Inc. (NYSE:MYE), a small-cap polymers manufacturer that has paid dividends since 1971.
Pitney Bowes Inc. (NYSE:PBI)
Pitney Bowes Inc. (NYSE:PBI), the world’s largest seller of postage meters, was until recently an S&P Dividend Aristocrat with 30 consecutive years of annual dividend increases. In late April, the company slashed its dividend in half in order to secure “financial flexibility to invest in the business and enhance capital structure,” according to its CEO. The company has been struggling with falling revenues as it continues to rely on an outdated business model. However, it is slowly increasing the share of enterprise-related revenues, which account for 35% of the total and grow at a low forecast CAGR of between 1% and 3%.
The problem is, however, that new revenue streams carry lower margins. The company’s first-quarter revenue dipped from the prior-year quarter and adjusted EPS from continuing operations plunged. Pitney Bowes Inc. (NYSE:PBI) sees 2013 revenue growth in the range of flat to 3% and adjusted EPS in the range of between $1.85 and $2.00, below last year’s $2.18, which included first-quarter $0.11 per share net tax benefit. Pitney Bowes Inc. (NYSE:PBI) pays a dividend yield of 4.9% on a payout ratio of 40% of the current-year EPS estimate.
On May 7, the company’s President and CEO, Marc Lautenbach, purchased 66,000 shares of PBI at an average price of $15.36 per share. The stock is currently trading at $15.44 per share.
Myers Industries, Inc. (NYSE:MYE)
Myers Industries, Inc. (NYSE:MYE) is a pick of Mario Gabelli, who controls the largest, 15.72% stake in the company. For five years in a row, Gabelli’s fund GAMCO Asset Management waged a proxy contest to win a seat on Myers Industries, Inc. (NYSE:MYE)’s Board of Directors, claiming it had “little confidence” in the Board’s commitment to enhance shareholder value. The fund recently won a proxy fight and had its Board nominee elected in late April. Reportedly, in early April, Myers Industries, Inc. (NYSE:MYE)also agreed to increase from nine to 10 the number of Board seats in order to accommodate the addition of Gabelli’s nominee.