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By Matt Doiron

Insider Monkey tracks quarterly 13F filings from hundreds of hedge funds and other notable investors, including billionaire Mario Gabelli's GAMCO Investors. According to our research, the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy); we've been tracking a portfolio based on this strategy and it has outperformed the S&P 500 by 33 percentage points in the last 11 months. Of course, it's also possible to use 13Fs as a source of investment recommendations in a number of areas, including stocks which offer high yields. Here are the five largest holdings in GAMCO's 13F for the end of June (check out the full filing on the SEC's website) which pay dividend yields of 3% or higher (or research Gabelli's picks over time):

Cablevision (NYSE:CVC) was one of the asset manager's ten largest holdings overall with the filing disclosing ownership of about 12 million shares. Following the recent drop in the company's stock price as Cablevision reports a declining subscriber base, the dividend yield has risen to 3.3%. Sales were about flat in the second quarter of 2013 versus a year earlier, and while net income was up Wall Street analysts believe that this will correct itself next year. In fact, their expectations imply a forward earnings multiple of more than 40 and so we think income investors should be wary of the stock.

GAMCO reported a position of 4.7 million shares in Ryman Hospitality Properties (NYSE:RHP), a real estate investment trust which manages combination hotel/convention centers and Nashville area tourist attractions. With business weak recently, 24% of the float is held short. Ryman has been down over 15% in the last year, and so its annual yield is quite high at nearly 6%; REITs are required to distribute a large share of taxable income to shareholders in order to maintain their preferential tax status. However, the stock appears quite risky and so investors should not get too greedy in terms of the yield.

A somewhat less risky name, at least in macro terms, was another of Gabelli's dividend picks: General Mills (NYSE:GIS). The food company features a beta of 0.1, and so combined with the 3.1% dividend yield it is difficult to imagine a more appealing name for a defensive investor. The trailing earnings multiple of 18 is a bit high, but is more reasonable than what can be found at many food and other consumer staple stocks. In addition, recent reports show rising revenue and net margins for General Mills and so it would be overvalued only slightly if at all.

According to the filing, GAMCO kept its stake in Diebold (NYSE:DBD), the $2 billion market provider of ATMs and other self-service kiosks (including, most infamously, voting machines) about constant between April and June. With quarterly dividend payments of nearly 29 cents per share, Diebold's annual yield is currently 3.8%. However, adjusted EPS figures have underperformed consensus for the past few quarters and the stock is down 10% in the last year. It is a somewhat popular target of short sellers as well, with the most recent data showing 10% of the float held short.

Gabelli and his team owned 2.4 million shares of waste management company Republic Services (NYSE:RSG) at the end of the quarter. Waste management is a somewhat stable industry, and so defensive investors may be interested in Republic given its 3.1% yield and beta of 0.6. However, the stock's valuation is highly dependent on earnings hitting analyst targets for next year. Even in that event Republic trades at 17 times consensus forecasts for 2014, and recently high costs have been causing profits to decline compared to their levels a year ago.

Source: Billionaire Mario Gabelli's High Yield Picks