High Dividend Stocks Smart Money Is Buying

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 |  Includes: BMY, DOW, EPD, ETR, FE, KMP, LMT, LO, NLY, NUE, PLD, PM, PPL, RAI, RTN, SCCO, SE, SYY, VTR, WM, WPZ, XEL
by: Insider Monkey

Our previous study showed that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. During that period, dividend stocks outperformed the market by an average of 1.36% per year. In addition, institutions are generally smarter than individual investors. Most institutions devote significant resources to researching stocks, thus making better investments. We are concerned about the Fed’s inflationary monetary policy and therefore recommend investors to play defensively by investing in high quality dividend stocks, especially those with institutional transactions.

Below we compiled a list of high dividend stocks with recent institutional net purchases. All companies have at least a $10 billion market cap, over 4% dividend yield, and positive institutional transactions.

Ticker

Company

Dividend Yield

YTD Return

KMP

Kinder Morgan Energy Partners LP

6.58%

4.29%

WPZ

Williams Partners L.P.

5.53%

18.29%

EPD

Enterprise Products Partners

5.92%

2.45%

DOW

Dow Chemical

4.04%

-25.93%

LO

Lorillard, Inc.

4.48%

47.01%

XEL

Xcel Energy Inc.

4.23%

7.89%

NUE

Nucor Corporation

4.41%

-22.86%

NLY

Annaly Capital

15.50%

-3.97%

VTR

Ventas, Inc.

4.75%

-4.99%

ETR

Entergy Corporation

5.08%

-4.18%

WM

Waste Management, Inc.

4.13%

-8.12%

FE

FirstEnergy Corp.

4.97%

24.45%

RTN

Raytheon Co.

4.20%

-8.30%

RAI

Reynolds American Inc.

5.39%

26.03%

PM

Philip Morris

4.73%

14.83%

SCCO

Southern Copper Corp.

8.39%

-43.82%

PPL

PPL Corporation

4.98%

10.98%

SE

Spectra Energy Corp.

4.11%

4.41%

SYY

Sysco Corp.

4.03%

-9.03%

PLD

ProLogis

4.76%

-23.81%

BMY

Bristol-Myers

4.08%

28.14%

LMT

Lockheed Martin

5.41%

9.00%

Click to enlarge

Kinder Morgan Energy Partners LP (NYSE:KMP): KMP is a pipeline transportation and energy storage company in North America. KMP has a dividend yield of 6.58% and 3.08% institutional transactions. It has a market cap of $23.1B, a P/E ratio of 120.59, and returned 4.29% since the beginning of this year. Michael Messner had $22 million invested in KMP.

Williams Partners L.P. (NYSE:WPZ): Williams is an integrated natural gas company. WPZ has a dividend yield of 5.53% and 2.64% institutional transactions. It has a market cap of $15.4B, a P/E ratio of 17.08, and returned 18.29% since the beginning of this year. Jean-Marie Eveillard invested $89 million in WPZ stocks (check out Eveillard’s top stock picks).

Enterprise Products Partners LP (NYSE:EPD): Enterprise is a North American midstream energy company. EPD has a dividend yield of 5.92% and 1.61% institutional transactions. It has a market cap of $35.8B, a P/E ratio of 26.05, and returned 2.45% since the beginning of this year. John Osterweis had $69 million invested in EPD.

The Dow Chemical Company (NYSE:DOW): Dow is a diversified manufacturer and supplier of products used primarily as raw materials in the manufacturing of customer products and services worldwide. DOW has a dividend yield of 4.04% and 1.50% institutional transactions. It has a market cap of $29.2B, a P/E ratio of 11.36, and lost 25.93% since the beginning of this year. Jim Simons and Ray Dalio both had over $30 million invested in DOW stocks (see Jim Simons’ top stock picks).

Lorillard, Inc. (NYSE:LO): Lorillard is the manufacturer of cigarettes in the United States. LO has a dividend yield of 4.48% and 0.31% institutional transactions. It has a market cap of $16.1B, a P/E ratio of 15.88, and returned 47.01% since the beginning of this year. Jim Simons had over $300 million of LO stocks. Jean-Marie Eveillard also had $250 million invested in LO.

Xcel Energy Inc. (NYSE:XEL): Xcel Energy is engaged in the utility business. XEL has a dividend yield of 4.23% and 0.29% institutional transactions. It has a market cap of 11.9B, a P/E ratio of 14.48, and returned 7.89% since the beginning of this year. John A. Levin had $17 million invested in XEL stocks.

Nucor Corporation (NYSE:NUE): Nucor manufactures steel and steel products. NUE has a dividend yield of 4.41% and 30.26% institutional transactions. It has a market cap of $10.4B, a P/E ratio of 22.21, and lost 22.86% since the beginning of this year. Jeffrey Vinik and Jim Simons both had $26 million of NUE shares (check out Vinik’s top stock picks).

Annaly Capital Management, Inc. (NYSE:NLY): Annaly Capital Management owns, manages and finances a portfolio of real estate related investments. NLY has a dividend yield of 15.50% and 0.20% institutional transactions. It has a market cap of $15.0B, a P/E ratio of 5.41, and lost 3.97% since the beginning of this year. Bill Miller invested $66 million in NLY shares.

Ventas, Inc. (NYSE:VTR): Ventas, Inc. is a real estate investment trust VTR has a dividend yield of 4.75% and 0.18% institutional transactions. It has a market cap of $13.9B, a P/E ratio of 42.45, and lost 4.99% since the beginning of this year. D. E. Shaw had $28 million invested in VTR shares.

Entergy Corporation (NYSE:ETR): Entergy is an integrated energy company engaged primarily in electric power production and retail electric distribution operations. ETR has a dividend yield of 5.08% and 0.10% institutional transactions. It has a market cap of $11.6B, a P/E ratio of 9.3, and lost 4.18% since the beginning of this year. Michael Messner holds the biggest position in ETR (see Michael Messner’s top stock picks).

Disclosure: I am long PM, FE.