7 Dividend Monsters Insiders Are Bullish About

by: Insider Monkey

During the past few years, the financial markets have been hit by one crisis after another. Central banks all over the world have been using inflationary monetary policies to stimulate their economies. The Fed is committed to the ultra-low interest rate for another two years. We do not like the expansionary policies of the Fed and we are concerned that these policies will lead to inflation. That’s why we have been recommending investors purchase high-dividend stocks. One of the best ways of picking good dividend stocks is to focus on the stocks corporate insiders are buying. These people have more exposure to their companies’ performance. They understand their companies much better than ordinary investors and sometimes they have material non-public information. They will not increase their holdings unless they know that their purchases have a high probability to be profitable.

Below we compiled a list of high-dividend stocks insiders are bullish about. All companies have market cap of at least $3 billion, dividend yield over 4%, and were purchased by at least one insider over the past month. Market data sourced from Finviz.



Dividend Yield



Reynolds American Inc.




Consolidated Edison Inc.




Energy Transfer Equity, L.P.




Chesapeake Midstream Partners




NuStar Energy L.P.




Och-Ziff Capital Management




Inergy, L.P.



Reynolds American Inc (NYSE:RAI) is one of the high-dividend stocks that insiders are buying. It was purchased by one insider during the past month. On December 13, Richard Thornburgh bought 5000 shares at $40.9384. Now RAI is trading at $41.33 per share. It has a market cap of $23.7B and a P/E ratio of 17.83. The dividend yield of RAI is 5.51%. At the end of September, there are 15 hedge funds with RAI positions in their portfolios. For example, Jim Simons’ Renaissance Technologies had $50+ million invested in RAI at the end of the third quarter. Cliff Asness and Louis Navellier are also bullish about RAI. Their funds both invested more than $30 million in RAI at the end of September.

Another large-cap dividend stock that insiders are bullish about is Consolidated Edison Inc (NYSE:ED). ED has a dividend yield of 4.05%. It was purchased by 10 insiders at the end of 2011. On December 31, 10 officers/directors of Consolidated Edison, including Robert Hoglund, Joann Ryan, and Frances Resheske, etc, bought 450+ shares at $59.47. Today the stock is trading at $59.58. It seems that the insiders at Consolidated Edison often purchase ED at the end of each month. There are 13 hedge funds reported to own ED at the end of September. Among them, Jim Simons’ Renaissance Technologies had the largest ED position. The fund invested nearly $100 million in this stock at the end of the third quarter.

Insiders are also bullish about Energy Transfer Equity LP (NYSE:ETE). During the past month, ETE was bought by one insider. Kelcy Warren bought 1,000,000 shares at $36.25 on December 23. Now ETE’s prices increased $4 to $40.4 per share. Warren also bought more than 2,000,000 shares in August at around $37 per share. ETE has a dividend yield of 6.16%. At the end of September, Chuck Royce's Royce & Associates disclosed owning $18.5 million worth of ETE shares. Jim Simons’ Renaissance Technologies and Jean-Marie Eveillard’s First Eagle Investment Management also both had over $15 million invested in ETE.

Other dividend stocks that insiders are buying include Chesapeake Midstream Partners LP (CHKM), NuStar Energy LP (NYSE:NS), Och-Ziff Capital Management Group LLC (NYSE:OZM), and Inergy LP (NRGY). We like dividend stocks because historically they outperformed the stock market and now we expect them to outperform the long-term Treasuries. Academic research has shown that insider purchases on average beat the market in the following 12-month period. We believe that by focusing on the stock picks of insiders, especially those with decent dividend yields, investors are more likely to outperform the market in the long term.

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

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