14 High Dividend Energy Stocks Hedge Funds Are Crazy About

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 |  Includes: BP, EPD, ERF, KMI, KMP, LINEQ, PAA, PBR, PWE, RIG, SDRL, SE, SPY, TOT, YPF
by: Insider Monkey

During the economic turmoil, investors are encouraged to purchase stocks with high dividend yields. Additionally, we are more likely to outperform the market by imitating the smartest investors rather than by trading against them.

Based on the transactions of more than 300 hedge funds, we compiled the top 14 high dividend energy stocks held by hedge funds. The market data are sourced from Fidelity. These stocks have market capitalizations above $5 billion, annualized dividend yields of at least 4%, and are owned by at least 8 hedge funds.

Company Name

Symbol

Dividend Yield (%)

Number of Hedge Funds

Return Since June

BP PLC

BP

4.6

44

-16.7%

PETROBRAS

PBR

4.5

33

-17.7%

TRANSOCEAN LTD

RIG

5.9

30

-15.5%

KINDER MORGAN INC.

KMI

4.8

20

-11.4%

YPF SOCIEDAD

YPF

8.4

19

-15.8%

PENN WEST PETROLEUM

PWE

6.1

17

-22.8%

SEADRILL LTD

SDRL

9.4

15

-9.6%

TOTAL

TOT

6.9

14

-18.0%

SPECTRA ENERGY CORP

SE

4.1

13

-6.2%

ENTERPRISE PRODUCTS PARTNERS

EPD

5.8

11

-2.3%

ENERPLUS CORP

ERF

7.7

8

-9.4%

LINN ENERGY LLC

LINE

7.5

8

-4.6%

KINDER MORGAN

KMP

6.6

8

-2.9%

PLAINS ALL AMERICAN PIPELINE

PAA

6.5

8

-4.6%

Click to enlarge

The average dividend yield of these 14 stocks is 6.3%. Since the end of June, S&P 500 ETF (NYSEARCA:SPY) lost 10.7%. Half of the 14 stocks outperformed the market during the period.

Here are the top 10 high dividend energy stocks held by hedge funds:

BP PLC: BP is an international oil and gas company, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products. BP has a 4.6% dividend yield and returned -16.7% since the end of June. BP has a market cap of $117.91B and P/E ratio of 5.90. BP is held by 44 hedge funds, and Kenneth Mario Garschina holds the largest BP position (see Garschina’s favorite stocks here).

Petrobras: Petrobras is a Brazilian integrated oil and gas company. It operates in five segments: exploration and production; refining, commercialization and transport of oil and natural gas; petrochemicals; distribution of derivatives, electrical energy, bio fuels and other renewable energy sources. PBR has a 4.5% dividend yield and returned -17.7% since the end of June. PBR has a market cap of $184.19B and P/E ratio of 7.17. PBR is held by 33 hedge funds, and Sandy Nairn holds the largest PBR position.

Transocean Ltd.: Transocean is an international provider of offshore contract drilling services for oil and gas wells. RIG has a 5.9% dividend yield and returned -15.5% since the end of June. RIG has a market cap of $17.86B and P/E ratio of 488.5. RIG is held by 30 hedge funds, and John Paulson holds the largest RIG position (see Paulson’s favorite stocks here).

Kinder Morgan Inc.: Kinder Morgan is an American energy company. It is also, through a subsidiary, the general partner of and owner of many of the interests in Kinder Morgan Energy Partners, a publicly traded pipeline and terminal limited partnership. KMI has a 4.8% dividend yield and returned -11.4% since the end of June. KMI has a market cap of $20.51B and P/E ratio of 49.59. KMI is held by 20 hedge funds.

YPF Sociedad: YPF is an energy company, engages in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas in Argentina. YPF has an 8.4% dividend yield and returned -15.8% since the end of June. YPF has a market cap of $15.29B and P/E ratio of 12.01. TPF is held by 19 hedge funds, and Eric Mindich holds the largest YPF position (see Mindich’s favorite stocks here).

Penn West Petroleum Ltd.: Penn West Petroleum is an exploration and production company. Penn West is engaged in the business of acquiring, exploring, developing, exploiting and holding interests in petroleum and natural gas properties and related assets. PWE has a 6.1% dividend yield and returned -22.8% since the end of June. PWE has a market cap of $8.47B and P/E ratio of 16.22. PWE is held by 17 hedge funds, and Andreas Halvorsen holds the largest PWE position.

Seadrill Ltd.: SeaDrill is a Bermuda-based company active in the oil and gas industry. It operates a fleet of 60 units comprising drill ships, jack-up rigs, semi-submersible rigs and tender rigs for operations in shallow to ultra-deepwater areas. SDRL has a 9.4% dividend yield and returned -9.6% since the end of June. SDRL has a market cap of $14.64B and P/E ratio of 6.81. SDRL is held by 15 hedge funds, and Jeffrey Vinik holds the largest SDRL position (see Jeff Vinik’s favorite stocks).

Total: TOTAL SA is a France-based integrated international oil and gas company. TOT has a 6.9% dividend yield and returned -18.0% since the end of June. TOT has a market cap of $105.41B and P/E ratio of 6.52. TOT is held by 14 hedge funds, and Robert Rodriguez and Steven Romick hold the largest TOT position.

Spectra Energy Corp.: Spectra Energy Corp is a natural gas infrastructure company owns and operates a portfolio of complementary natural gas-related energy assets. SE has a 4.1% dividend yield and returned -6.2% since the end of June. SE has a market cap of $16.52B and P/E ratio of 14.35. SE is held by 13 hedge funds, and Clint Carlson holds the largest SE position.

Enterprise Products Partners: Enterprise is a midstream energy company providing a range of services to producers and consumers of natural gas, natural gas liquids, crude oil, refined products and certain petrochemicals. EPD has a 5.8% dividend yield and returned -2.3% since the end of June. EPD has a market cap of $35.23B and P/E ratio of 26.32. EPD is held by 11 hedge funds, and John Osterweis holds the largest EPD position (see Osterweis’s favorite stocks here).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.