Whenever I evaluate a stock, I always check to see what its insider ownership looks like. If a lot of insiders are selling their shares, it puts up a flag. When a lot of insiders are buying, it gives us an encouraging sign that things within the company are heading in the right direction. Here are 3 stocks that provide investors with high dividends and have seen lots of recent insider buying.
Pitney Bowes Inc. (NYSE:PBI)
Headquartered in Connecticut, Pitney Bowes is in the business equipment industry, where they provide software, hardware, and services to enable physical and digital communication. They provide broad and extensive mail system solutions to small and medium sized businesses. They employ over 27,000 people and have established a pattern of outperforming the industry averages. Some key highlights:
- In the past 6 months, insider ownership of PBI has increased 43.3%;
- PBI is 89% institutionally owned;
- Its stock price has risen 45% since January 1st;
- Its net operating cash flow increased 30% in Q4 2012 versus Q4 2011;
- It's trading cheaply at a P/E of 6.7.
With a market cap of nearly 3 billion, Pitney Bowes is a proven industry leader which has demonstrated its ability to make money. It saw sales of $4.9 billion last year with a net income of $435.88 million. We can be excited about this stock because of its good forward P/E (which is 7.4), its target price of $17, and the dividend it delivers, which carries an annual yield of 10.37%.
Western Asset Mortgage Capital Corporation (NYSE:WMC)
Managed by Western Asset, this residential REIT has a market cap of 559 million and primarily focuses on investing in, financing, and managing residential mortgage-backed securities. While most REITs solely choose securities that are backed by a U.S. Government agency or entity, WMC is becoming a hybrid REIT. This means that they are willing to invest in non-agency RMBS that are backed by other assets. By being a hybrid REIT, they can provide more attractive risk-adjusted returns to investors.
- In the past 6 months, insider ownership of WMC has increased 123%;
- On April 3rd, Deutsche Bank reiterated their "Buy" rating on WMC;
- WMC is trading near 52-week highs and has a Short Float of 5.69%, which suggests that we could be seeing a short squeeze soon if WMC continues on its upward trend;
- Its latest quarterly financial performance has increased by a solid 17%.
Just recently, on April 2nd, WMC announced that its next quarterly dividend will be a record high of $0.95 per share. It is going ex-dividend soon, on April 10, so get on board quickly if you want to collect on that. With an annual dividend yield of 15.5% and the massive increase in insider ownership recently, we can feel comfortable buying WMC and living off of its generous dividend.
World Wrestling Entertainment Inc. (NYSE:WWE)
Dwayne Johnson, John Cena, and Hulk Hogan have become household names after WWE made them superstars. Whether you love the product that WWE provides or think its cheesy and have no interest in it, you should take a look at its stock. It provides a 5.4% dividend and its share price has increased 22% since January 1st. WWE is becoming relevant again by coaxing its most popular stars to come back in the ring, and this strategy is broadening its fan base and re-attracting its old viewers.
- In recent months, insider ownership of WWE has increased 19%;
- It is 70% institutionally owned;
- It currently trades at a P/E of 21 and shows more upside with a forward P/E of 18;
- Financial performance in this quarter is up 12.5% and its YTD performance is up 14.52%;
- EPS estimates for next year suggest a potential 30% increase in earnings.
WWE is an attractive option to add to your portfolio for its dividend, as well as its target price of $11.67. It shows signs of growth with a low forward P/E and increased insider ownership. Its flagship program, Wrestlemania, is coming up soon. The Rock is ready to roll on WWE, and so are investors who see its potential.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PBI, WWE, WMC over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.