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In a previous article, we compiled a list of top 30 U.S. financial stocks and showed that high dividend yielding financials have performed better than low dividend yielding financials since the beginning of this year. On the other hand, the average dividend yield of these large-cap financials is relatively low and dividend lovers may not find top U.S. financial stocks very appealing.

However, we believe there are better dividend opportunities within the financial sector. Some industries contain high dividend yielding stocks which make dividend lovers comfortable to invest in. We like these high dividend stocks since they generally perform better and usually increase dividend payments over the next 5-10 years.

Asset Management industry is one of the high dividend yielding industries within the financial sector. We compiled a list of 26 U.S. Asset Management stocks (the sector classifications are sourced from Finviz) by market cap (> $1B) and ranked them based on their 12-month dividend yields. Based on a 3% threshold level, the high and low dividend yielding asset management stocks are as follows:

HIGHER DIVIDEND YIELDS

Dividend Yield

YTD Return

52-week Return

INDIA FUND INC

IFN

12.5%

-14.2%

7.31%

PROSPECT CAPITAL CORP

PSEC

8.4%

12.0%

18.25%

COHEN & STEERS INC

CNS

7.8%

18.6%

31.98%

OCH ZIFF CAPITAL

OZM

6.9%

-1.4%

-9.76%

ALLIANCEBERNSTEIN HOLDING L P

AB

5.8%

-2.2%

-23.2%

K K R FINANCIAL HOLDINGS L L C

KFN

5.0%

12.4%

33.72%

FEDERATED INVESTORS INC PA

FII

3.6%

3.6%

16.30%

BLACKSTONE GROUP L P

BX

3.4%

30.1%

43.07%

K K R & CO L P

KKR

3.0%

27.4%

80.79%

AVERAGE

9.6%

22.0%

LOWER DIVIDEND YIELDS

Dividend Yield

YTD Return

52-week Return

EATON VANCE CORP

EV

2.4%

10.0%

-0.09%

BLACKROCK INC

BLK

2.2%

3.9%

14.34%

WADDELL & REED FINANCIAL INC

WDR

1.9%

13.4%

18.97%

INVESCO LTD

IVZ

1.8%

1.9%

15.80%

T ROWE PRICE GROUP INC

TROW

1.8%

-2.5%

16.13%

PRINCIPAL FINANCIAL GROUP INC

PFG

1.7%

-2.9%

6.68%

BANK OF NEW YORK MELLON

BK

1.4%

-4.7%

-8.19%

LAZARD LTD

LAZ

1.3%

-0.1%

9.40%

AMERIPRISE FINANCIAL INC

AMP

1.2%

8.3%

37.60%

S E I INVESTMENTS COMPANY

SEIC

0.9%

-5.2%

2.92%

JANUS CAP GROUP INC

JNS

0.8%

-10.8%

-10.55%

FRANKLIN RESOURCES INC

BEN

0.7%

14.6%

15.57%

LEGG MASON INC

LM

0.6%

-4.5%

16.12%

GAMCO INVESTORS INC

GBL

0.2%

-7.8%

-0.58%

AFFILIATED MANAGERS GROUP

AMG

0.0%

6.1%

31.82%

AMERICAN CAPITAL LTD

ACAS

0.0%

37.6%

77.78%

FORTRESS INVESTMENT GROUP

FIG

0.0%

1.8%

19.59%

AVERAGE

3.5%

15.5%

In the last 52-week period, the average return of the 9 high dividend yielding asset management stocks was 22%. The second group of 17 stocks with lower dividend yields underperformed the first group in the same period, returning 15.5% on average. The performance of the first group was still better since the beginning of this year. The average Year-To-Date return of the first group is 9.6%, outperforming the low dividend stocks by more than 6 percentage points.

We prefer high dividend stocks over low dividend stocks since the former generally performs better than the latter. Five asset management stocks with the highest dividend yields are as follows:

1. India Fund, Inc.: India Fund, Inc. is a close-end equity mutual fund investing in Indian stocks. IFN has a high dividend yield of 12.5% and returned 7.31% during the past 12 months. Despite its high dividend yield, IFN performed terribly since the beginning of this year, losing 14.2%. The stock has a market cap of $1.32B and P/E Ratio of 4.23. Mark Nordlicht's Platinum Management had $99 Million in IFN. Peter J. Eichler's Aletheia also has a small position in IFN.

2. Prospect Capital Corp.: Prospect Capital Corp. is a mezzanine finance and private equity firm. PSEC has an 8.4% dividend yield and returned 18.25% to its investors during the past 12 months. PSEC recently traded at $11.85 and returned 12.0% year-to-date. The stock has a market cap of $1.05b and P/E ratio of 8.72. Jim Simons' Renaissance had $10 Million in PSEC at the end of December.

3. Cohen Steers Inc.: Cohen Steers is a large fund management firm specializing in real-estate and large cap value stocks. CNS recently traded at $30.34 and has a 7.8% dividend yield. CNS returned 31.98% during the past 12 months, while it gained 18.6% since the beginning of the year. The stock has a market cap of $1.31B and P/E ratio of 26.16. Chuck Royce had $44 Million in CNS at the end of December.

4. Och-Ziff Capital: Och-Ziff Capital is a global hedge fund mana ger and alternative asset management firm. OZM has a dividend yield of 6.9%, however it lost 9.76% during the past 12 months. OZM also performed negatively in 2011, losing 1.4% year-to-date. The stock recently traded at $15.09 and has a market cap of $1.46B. Joe DiMenna has a small investment in OZM.

5. AllianceBernstein Holding: AllianceBernstein has a 5.8% dividend yield and traded at $21.75 recently. AB lost -23.2% during the past 12 months, while it lost 2.2% year-to-date. The stock has a market cap of $2.29 B and P/E ratio of 17.05. Chuck Royce had $80 Million in AB at the end of December.

Source: Investing in High Dividend Yielding Asset Management Stocks