Billionaire Jim Simons' Favorite High Dividend Stocks

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 |  Includes: AZN, BMO, BMY, BT, CEL, CHT, CMS, CNP, CTL, ED, EEP, ETP, FNFG, FTR, HCP, LINEQ, LLY, LO, MRK, NOK, NYCB, PCG, PHI, PTNR, RAI, SCCO, T, TEG, VIV, WIN, WRI
by: Insider Monkey

Jim Simons' Medallion Fund is the best hedge fund that we have come across. The firm charges a fixed 5% management fee and takes 44% of the returns generated. After these expenses are deducted Medallion provided an average annual return of 35% to its investors. A couple of months ago, our calculations showed that Medallion's annual alpha is 34%. The success of Medallion fund is why Jim Simons is one the wealthiest people on the planet.

Medallion fund usually trades in small quantities. The median position size is less than $2.5 million. However, Jim Simons has some positions in his portfolio that are as large as $397 million. These positions were probably acquired for Simons' Renaissance Institutional Equities Fund (RIEF). RIEF isn't nearly as successful as Medallion but managed to beat the index funds since inception.

We compiled Jim Simons' high dividend stock picks that were at least $15 million at the end of March. We required a minimum dividend yield of 4% and yields were obtained from Fidelity. Here are Simons' favorite high dividend stock picks:

CompanyName

Ticker

Value (x1000)

Dividend Yield

LORILLARD INC

LO

256765

4.7

LILLY ELI & CO

LLY

227895

5.3

BRISTOL MYERS SQUIBB CO

BMY

123256

4.8

PHILIPPINE LONG DISTANCE TELE CO

PHI

97375

6.8

CENTURYLINK INC

CTL

89267

7.3

CELLCOM ISRAEL LTD

CEL

71486

12.8

LINN ENERGY LLC

LINE

63853

7.1

MERCK & CO INC NEW

MRK

53889

4.3

BANK MONTREAL QUE

BMO

52211

4.6

SOUTHERN COPPER CORP

SCCO

47571

7.2

REYNOLDS AMERICAN INC

RAI

45393

5.7

WINDSTREAM CORP

WIN

45355

7.7

CENTERPOINT ENERGY INC

CNP

43366

4.2

P G & E CORP

PCG

40138

4.3

H C P INC

HCP

37170

5.2

A T & T INC

T

34097

5.7

CHUNGHWA TELECOM CO LTD

CHT

33317

4.7

PARTNER COMMUNICATIONS CO LTD

PTNR

30390

9.9

INTEGRYS ENERGY GROUP INC

TEG

24154

5.5

B T GROUP PLC

BT

21916

5.1

NOKIA CORP

NOK

21533

9.6

ASTRAZENECA PLC

AZN

21211

7.6

C M S ENERGY CORP

CMS

19956

4.3

FRONTIER COMMUNICATIONS CORP

FTR

19379

9.5

CONSOLIDATED EDISON INC

ED

17559

4.6

NEW YORK COMMUNITY BANCORP INC

NYB

17162

6.3

VIVO PARTICIPACOES S A

VIV

16678

12.9

ENBRIDGE ENERGY PARTNERS LP

EEP

16517

7.0

ENERGY TRANSFER PARTNERS L P

ETP

15880

7.6

WEINGARTEN REALTY INVESTORS

WRI

15289

4.6

FIRST NIAGARA FINL GROUP INC NEW

FNFG

15195

4.7

Click to enlarge

Simons' favorite high dividend stock was LO, which returned more than 17% since the end of March. This has been an amazing pick for Simons this year. Simons had $360 Million in LO at the end of December, and the stock returned 18% during the first quarter as it was revealed that the regulation on Menthol cigarettes weren't as restrictive as feared. Simons' trimmed his position by 38% during the first quarter, yet it was still his third largest position. First Eagle Investment Management and Paulson&Co (See John Paulson's top stock picks here) were also betting on LO during the first quarter.

One of Simons' highest yielding and largest position was Cellcom Israel. The stock lost nearly 12% since the end of March and this decline boosted its yield to 12.8%. Most of Simons' favorite dividend stocks are from telecom and pharmaceuticals. Eli Lilly and Bristol Myers are among Simons' top three dividend stock picks.

Jim Simons' Renaissance is one of our favorite hedge funds and we believe his favorite dividend picks will beat the 10-year treasuries over the long term (See Jim Simons' largest other stock picks here). We also think that these stocks have the potential to deliver large capital gains as well. Simons probably didn't buy them just for their high yields.

Disclosure: I am long CTL, T, FTR.