We like dividend stocks. They generally perform better than the market and usually increase dividend payments over the succeeding 5 to 10 years. According to our research, high dividend stocks beat the market by an average of 1.36% per year between 1927 and 2009. We do not like the Fed's inflationary monetary policies and we are concerned that these policies will lead to inflation in the near future. Therefore, we recommend investors to play defensively by investing in high dividend yielding stocks rather than long-term treasury bonds.
Asset Management industry is one of the industries with several dividend yielding stocks. Below we compiled a list of seven dividend yielding asset management stocks. All companies are in the asset management industry with at least $1 billion market cap and have dividend yields above 3%. The market data is sourced from Finviz.
Och-Ziff Capital Management Group
Kohlberg Kravis Roberts & Co.
Waddell & Reed Financial Inc.
Federated Investors, Inc.
AllianceBernstein Holding L.P.
Prospect Capital Corporation
Och-Ziff Capital Management Group LLC (OZM) has a double-digit dividend yield of 10.93%. The company is an institutional alternative asset manager. It reported total revenues of $149 million for the third quarter of 2011, up from $122 million for the same quarter of 2010. OZM has a market cap of $3.6B and a low forward P/E ratio of 8.23. Jim Simons' Renaissance Technologies invested $7.4 million in OZM at the end of the third quarter, up 53% from the end of June. The stock was up 8.42% since the end of September, lower than the 16.99% for SPY.
Kohlberg Kravis Roberts & Co (KKR) also has a high dividend yield of 5.04%. The company reported total revenues of $165 million for the third quarter of 2011, compared with $96 million for the same quarter a year earlier. KKR has a market cap of $2.9B and a low forward P/E ratio of 7.38. At the end of the third quarter last year, seventeen hedge funds disclosed KKR positions in their 13F portfolios. Leon Cooperman is the most bullish hedge fund manager about KKR. As of September 30, 2011, his Omega Advisors had $55 million invested in this stock. KKR returned 36.50% so far since the end of September, beating the market by almost 20 percentage points.
Another high dividend asset management stock is BlackRock Inc (BLK). BlackRock is one of the largest and most successful asset management companies in the world. It has a market cap of $33B and a dividend yield of 3.01%. BlackRock reported annual net income of $2.3 billion for 2011, up from $2.1 billion for 2010. There are 18 hedge funds with BLK positions at the end of the third quarter last year. For instance, Bill Miller's Legg Mason Capital Management had $160 million invested in BLK. John Paulson's Paulson & Co also invested $100+ million in BLK at the end of September. Since then, BLK was up 24.51%, outperforming the market by nearly 8 percentage points.
Other high dividend yielding asset management stocks include Waddell & Reed Financial Inc (WDR), Federated Investors Inc (FII), AllianceBernstein Holding LP (AB), and Prospect Capital Corporation (PSEC). Financial sector was hit heavily by the European debt crisis last summer. As a result, many financial stocks are trading at a discount. These seven high dividend asset management stocks all had forward P/E ratios of lower than 14. We like dividend stocks. We encourage investors to play defensively and consider adding some of these high dividend yielding asset management stocks to their portfolios.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.