Over the past decade, GuruFocus’ Most Broadly Held Portfolio, a model portfolio consisting of the 25 stocks that appear in the highest number of guru portfolios, has outperformed the S&P 500 with an annualized return of 15.61% versus the benchmark’s 12.28%.
Thus, investors in search of value opportunities may find stocks with attractive investment prospects among those that make the list of High Dividend Yield Stocks that have been bought by multiple gurus recently.
According to this screen, five stocks that have dividend yields of at least 4% and were popular buys among gurus as of their latest portfolio reports are Verizon Communications Inc. (VZ, Financial), Altria Group Inc. (MO, Financial), International Business Machines Corp. (IBM, Financial), LyondellBasell Industries NV (LYB, Financial) and Dow Inc. (DOW, Financial).
Verizon Communications
As of April 21, Verizon Communications (VZ, Financial) has a dividend yield of 4.60% at a share price of $55.35. The forward dividend yield is 4.63%, and the payout ratio of 48% is lower than the 10-year median of 55%. The next dividend of 64 cents per share will be payable on May 2 to shareholders of record as of April 8.
Gurus have been net buyers of the American telecommunications giant for the past four quarters. Ken Fisher (Trades, Portfolio) and Arnold Van Den Berg (Trades, Portfolio) are among those who have been buying the stock recently, while sellers include Tweedy Browne (Trades, Portfolio) and John Rogers (Trades, Portfolio).
The top guru shareholder is Warren Buffett (Trades, Portfolio) with 3.78% of shares outstanding, followed by Fisher with 0.23% and Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.14%.
Verizon has a GF Score of 79 out of 100, driven by high ranks for GF Value, momentum and profitability despite a middling rank for growth and a low rank for financial strength.
Altria Group
At a share price of $56.65, Altria Group (MO, Financial) has a dividend yield of 6.29%. The forward dividend yield is 6.36%. The payout ratio of 263% does not look sustainable, but that number is calculated from GAAP earnings per share; using adjusted earnings per share, the payout ratio is in line with Altria’s 80% goal. The next dividend of 90 cents per share will be payable on April 29 to shareholders of record as of March 25.
Gurus have been net buyers of the world’s largest tobacco producer for the past three quarters. Bill Nygren (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) are among those who have been buying shares recently, while sellers include Joel Greenblatt (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio).
The top guru shareholders are Bill Nygren (Trades, Portfolio) with 0.33% of shares outstanding, Simons' firm with 0.13% and Primecap Management with 0.07%.
Altria’s GF Score is 77 out of 100; while its momentum and profitability ranks are stellar, it receives mid-to-low ranks for GF Value, growth and financial strength.
International Business Machines
International Business Machines (IBM, Financial) traded around $139.83 per share on Thursday for a dividend yield of 4.68%. The forward dividend yield is also 4.68%, but the payout ratio is high at 134%, which is worrying even for this dividend aristocrat. Free cash flow per share is still nearly double the dividend, though, and many see IBM as a turnaround opportunity. IBM recently paid a dividend of $1.64 per share on March 10.
Gurus have been net sellers of the legacy technology company for the past two quarters. Recent buyers include Greenblatt and Simons' firm, while recent sellers include Fisher and Steven Cohen (Trades, Portfolio).
The top guru shareholder is Grantham with 0.03% of shares outstanding, followed by Ray Dalio (Trades, Portfolio) and Greenblatt, each with 0.01%.
IBM’s GF Score is 72 out of 100, driven by high momentum and profitability as well as a mid-tier GF Value rank despite low ranks for financial strength and growth.
LyondellBasell Industries
LyondellBasell Industries (LYB, Financial) has a dividend yield of 4.05% at a share price of $111.15. The forward dividend yield is also 4.05%, and the payout ratio is a healthy 26%, indicating room for potential dividend growth. The stock last paid a quarterly dividend of 1.13 British pounds per share ($1.47) on March 14.
Gurus have been net buyers of the Dutch plastics and chemicals manufacturer for the past couple of quarters. Recent buyers include Grantham and Paul Tudor Jones (Trades, Portfolio), while recent sellers include Jeff Auxier (Trades, Portfolio) and Scott Black (Trades, Portfolio).
The top guru shareholders are Dodge & Cox with 0.83% of shares outstanding, Simons' firm with 0.39% and Grantham with 0.12%.
The company earns a GF Score of 89 out of 100 with high ranks for profitability, momentum, GF Value and growth, hampered only by a middling rank for financial strength.
Dow
On April 21, shares of Dow (DOW, Financial) traded around $69.51, resulting in a dividend yield of 4.05%. The forward dividend yield is also 4.05%, and the payout ratio is well with a safe range at 33%, leaving room for growth. The company will pay its next dividend of 70 cents per share on June 10 to shareholders of record as of May 31.
Based on quarterly reports alone, it would seem that gurus are buying the stock and selling it equally, but a couple of buys outside of quarterly filings have bumped it up to net buy status. Recent buyers include Ronald Muhlenkamp (Trades, Portfolio) and Tom Russo (Trades, Portfolio), while sellers include Lee Ainslie (Trades, Portfolio) and Primecap Management.
The top guru shareholder of the stock is Richard Pzena (Trades, Portfolio) with 0.87% of shares outstanding, followed by Primecap Management with 0.30% and Simons' firm with 0.21%.
Dow’s GF Score is 79 out of 100. The company gets a top rank for momentum and a high rank for GF Value, with mid-tier ranks for financial strength, growth and profitability.
Disclosure regarding regulatory filings
The information regarding guru buys and sells comes from regulatory filings with the Securities and Exchange Commission (SEC). Most of the quarterly information comes from 13F filings (for investments firms) and NPORT-P filings (for certain mutual funds). Investors should be aware that these reports do not provide a complete picture of a guru’s holdings. They include only a snapshot of long equity positions in U.S.-listed stocks and American Depository Receipts (ADRs) as of the quarter’s end. They do not include short positions, non-ADR international holdings or other types of securities. NPORT-P filings may also include international stocks. However, even these limited filings can provide valuable information.
