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Jim Simons is one of the richest people in the world. He owns between 25 to 50 percent of Renaissance Technologies, which manages over $25 billion of assets in several funds. Simons is also the largest investor in the Medallion Fund, the best hedge fund that we track. The spectacular returns of this fund made Simons a billionaire. Medallion employs high frequency trading and exploits inefficiencies in the stock market. For instance, it takes advantage of the inefficiencies in the execution of large transactions. Renaissance’s Institutional Equities Fund, which makes long-term bets, is up 31% through the end of October. Its bets on high-dividend stocks helped it achieve this amazing result.

Below we compiled a list of top 20 high-dividend stocks in Simons’ portfolio at the end of September. All companies have at least $2 billion market cap and dividend yields higher than 4%.

Company Name

Ticker

Value

Activity

Dividend

PHILIP MORRIS INTL

PM

392183

73%

4.21%

LORILLARD INC

LO

323598

2%

4.76%

LILLY ELI & CO

LLY

262472

-31%

5.40%

BRISTOL MYERS SQUIBB

BMY

177294

-21%

4.24%

CONSOLIDATED EDISON

ED

96911

364%

4.19%

SOUTHERN CO

SO

88651

288%

4.42%

AMERICAN ELECTRIC POWER

AEP

69120

220%

4.97%

EXELON CORP

EXC

64375

New

4.92%

RAYONIER INC

RYN

59223

255%

4.12%

PAYCHEX INC

PAYX

56740

533%

4.59%

MICROCHIP TECHNOLOGY

MCHP

52128

-6%

4.21%

REYNOLDS AMERICAN INC

RAI

51408

17%

5.58%

FIRSTENERGY CORP

FE

45970

59%

5.15%

P G & E CORP

PCG

33751

-35%

4.78%

AMEREN CORP

AEE

30154

102%

5.03%

D P L INC

DPL

28021

102%

4.41%

FIRST NIAGARA FINL

FNFG

25873

131%

7.42%

N Y S E EURONEXT

NYX

21448

1620%

4.45%

DUKE ENERGY CORP NEW

DUK

21215

New

5.00%

PROGRESS ENERGY INC

PGN

20921

340%

4.76%

The largest high dividend stock in Simons’ portfolio at the end of September was Philip Morris International Inc (NYSE:PM), which has a dividend yield of 4.21%. Simons had nearly $400 million invested in this stock, up 73% from the end of June. PM returned 17.17% so far since the end of September, beating the 5.80% for SPY in the same period. Tom Russo also invested over $500 million in PM.

Simons also invested almost $100 million in Consolidated Edison Inc (NYSE:ED), another high dividend stock with a dividend yield of 4.19%. He significantly increased his stakes in this position by 364% over the third quarter. ED was up 1.38% since the end of the third quarter. Simons also more than tripled his position in Southern Co (NYSE:SO) and American Electric Power Co Inc (NYSE:AEP). At the end of the third quarter, Simons had $89 million invested in SO and $69 million invested in AEP. SO returned 1.93% and AEP returned 0.59% since the end of September.

In the third quarter, Simons bought new stakes in Exelon Corp (NYSE:EXC), which has a dividend yield of 4.92%. Simons initiated a brand new $64.4 million in EXC. EXC returned 1.38% since the end of September. Steven Cohen's SAC Capital Advisors had over $50 million invested in EXC shares.

Other major high dividend stocks in Simons’ portfolio at the end of September include Lorillard Inc (NYSE:LO), Lilly Eli & Co (NYSE:LLY), Bristol Myers Squibb Co (NYSE:BMY), Rayonier Inc (NYSE:RYN), and Paychex Inc (NASDAQ:PAYX). Most investors are bullish about consistent high dividend yielders AT&T (NYSE:T) and Verizon (NYSE:VZ). Simons also had around $100 million in each stock at the end of the second quarter. However, he sold his stakes in both stocks, which indicates that he is getting a little bearish about telecoms.

Dividend stocks are able to protect investors from inflationary risks. We are concerned about the Fed’s expansionary monetary policies and we think the Fed might be late in response to the economy growth, leading to inflation. Therefore, we encourage investors to invest in high dividend stocks, especially those picked by famous hedge fund managers. Though some of the dividend stocks in Simons’ portfolio underperformed the market in the fourth quarter, we still believe that they will generate decent returns in the long term.

Disclosure: I am long PM, FE, T.

Source: Billionaire Jim Simons' High-Dividend Stock Picks