In this article, we will take a detailed look at the 10 Dividend Stocks Insiders Are Selling. For a quick overview of such stocks, read our article 5 Dividend Stocks Insiders Are Selling.
Dividend investing struggled to gain investors’ attention ever since the AI boom started. Everyone just wants a pie of the ever-booming, AI-led market rally that is helping mega-cap technology stocks. That rally is now expanding to smaller companies in the tech sector. But amid uncertainty over rate cuts and investors’ urge for stability, dividend stocks almost always remain on the radar of long-term investors who are aware of the power of compounding. After all, since 1960 through 2023, reinvested dividends accounted for a whopping 85% of the cumulative total return of the S&P 500 Index. S&P Global in a report published in January 2024 made some interesting forecasts about the dividend landscape this year. The report said that all 20 major sectors in the US, which is the biggest dividend-paying market in the world, will grow their base dividends by 6% on average. The report said that this growth would mostly be driven by reinstated dividends by various companies following the dividend cuts and suspensions caused by the pandemic. S&P Global said that in 2024 companies in the US are expected to dole out $28 billion in dividend payments. The report said that most of the dividend payments in the US come from healthcare, technology and industrial goods sectors. S&P Global was highly bullish on the healthcare sector because of expected rate cuts and M&A activity. Some other sectors are also expected to contribute to dividend growth this year, according to the report:
“Media; travel and leisure; and personal care, drug and grocery stores — are expected to have more than 10% growth. Collectively, these sectors constitute about 6% of aggregated dividends, adding less than 1% to projected growth. Media is set to grow largely due to The Walt Disney Co.’s dividend reinstatement. Additionally, the sector should benefit from political advertising campaigns. The travel and leisure sector is thriving due to a robust labor market and increased demand for airlines and hospitality. Higher revenues have enabled companies in the sector to resume dividends in 2023; we expect the dividend resumption to continue. Most of the retailers maintain a strong financial position supporting the growth agenda. Retailers continued to grow their dividends despite multiple challenges, as they were able to generate substantial free cash flow (FCF US$28 billion more will be paid in 2024 with all 20 sectors expected to grow regular base dividends on the average of 6%. The growth is driven, in part, by the companies that reinstated dividends in 2023 after the pandemic-induced cuts, with a few more expected to do so in 2024.”
However, there are some dividend stocks that recently saw insider selling activity. In this article we will take a look at some of those companies.
Image by Steve Buissinne from Pixabay
Methodology
For this article we used Insider Monkey’s insider trading stock screener to identify dividend-paying companies that recently saw insider selling activity. From these companies we picked 10 stocks with the highest insider selling activity in terms of dollar value. Some top names in the list include JPMorgan Chase & Co (NYSE:JPM), L3Harris Technologies Inc (NYSE:LHX) and Macy’s Inc (NYSE:M). Buy why pay attention to insider buying/selling and hedge fund activity? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
10. Fidelity D & D Bancorp Inc (NASDAQ:FDBC)
Number of Hedge Fund Investors: 2
Pennsylvania-based Fidelity D & D Bancorp Inc (NASDAQ:FDBC) is one of the dividend stocks with insider selling. Fidelity D & D Bancorp Inc’s (NASDAQ:FDBC) VP and COO Eugene J. Walsh on March 26 sold 545 shares of Fidelity D & D Bancorp Inc (NASDAQ:FDBC) at $49.47 per share. Fidelity D & D Bancorp Inc’s (NASDAQ:FDBC) CFO Salvatore R. DeFrancesco on February 16 had sold 417 shares of Fidelity D & D Bancorp Inc (NASDAQ:FDBC) at the same price. In another insider selling transaction, Michael J. Pacyna, Fidelity’s Chief Lending Officer and EVP, sold 370 shares of the bank on February 16 at $49.47 per share. Since February 16 the stock is down 2.3%.
9. BRT Apartments Corp (NYSE:BRT)
Number of Hedge Fund Investors: 5
New York-based REIT BRT Apartments Corp (NYSE:BRT) has a dividend yield of over 6%. Mitchell Gould, BRT Apartments Corp’s (NYSE:BRT) EVP, on June 22, 2023, sold 50,000 shares of BRT Apartments Corp (NYSE:BRT) at $20.15 per share. Since then the stock is down 14%. In a recent insider selling transaction, BRT Apartments Corp’s (NYSE:BRT) COO Ryan Baltimore sold 500 shares of BRT Apartments Corp (NYSE:BRT) on January 18, 2024, at $17.54 per share. Since then the stock is down 5.97%.
Like BRT, insiders are also selling JPMorgan Chase & Co (NYSE:JPM), L3Harris Technologies Inc (NYSE:LHX) and Macy’s Inc (NYSE:M).
8. Superior Group of Companies Inc (NASDAQ:SGC)
Number of Hedge Fund Investors: 12
Superior Group of Companies Inc (NASDAQ:SGC) saw heavy insider selling this month. Superior Group of Companies Inc (NASDAQ:SGC) Chief Strategy Officer Phil Koosed on March 18 sold 9,000 shares of Superior Group of Companies Inc (NASDAQ:SGC) at $15.64 per share. Since then the stock has increased by 6.2%.
In its latest earnings call the company talked about guidance and key business updates:
“The EBITDA increase was primarily driven by the Healthcare Apparel segment, whose EBITDA improved significantly to $1.4 million in the fourth quarter from negative $6.5 million a year ago, mainly driven by last year’s inventory write-downs. Also, despite a sales decrease in the fourth quarter, the Branded Products segment’s EBITDA improved to $11.7 million in the fourth quarter from $10.8 million a year ago due to higher gross margins. These improvements were partially offset by an EBITDA decline in our Contact Centers segment to $2.3 million in the fourth quarter from $3.8 million a year ago, primarily driven by labor increases earlier in the year. Turning to our balance sheet. We’ve continued to successfully reduce leverage, ending the year just under 2.0 times trailing 12-month covenant EBITDA, a significant improvement relative to 2.9 times just three months earlier in September and 3.9 times at the end of 2022.
In other words, we’ve cut our leverage ratio effectively in half over the past year. We also ended 2023 with cash and cash equivalents of $20 million, benefiting from our continued strong free cash flow and our focus on reducing working capital. Our operating cash flow for the year was $79 million. I’ll wrap-up with our full year 2024 outlook, which similar to 2023, we’ll have a back-end loaded cadence due to the underlying nature of the markets we serve. Our outlook calls for full year revenues in the range of $558 million to $568 million, up from 2023 revenues of $543 million. We also expect earnings per diluted share in a range of $0.61 to $0.68, up from 2023 $0.54. And I’ll reiterate that similar to last year, we expect a back-end weighted pattern.”
Read the entire earnings call transcript here.
7. Horace Mann Educators Corporation (NYSE:HMN)
Number of Hedge Fund Investors: 13
Illinois-based property and life insurance company Horace Mann Educators Corporation (NYSE:HMN) ranks seventh in our list of the dividend stocks insiders are selling. Kimberly A Johnson, Senior VP and Controller at Horace Mann Educators Corporation (NYSE:HMN), on March 26 sold 5,000 shares of Horace Mann Educators Corporation (NYSE:HMN) at $36.00 per share. Bret A. Conklin, Horace Mann Educators Corporation’s (NYSE:HMN) CFO, on March 4 sold 9,689 Horace Mann Educators Corporation (NYSE:HMN) shares at $35.80 per share. Since then the stock is up 2.9%. In addition to HMN, JPMorgan Chase & Co (NYSE:JPM), L3Harris Technologies Inc (NYSE:LHX) and Macy’s Inc (NYSE:M) are also seeing insider selling.
FPA Queens Road Small Cap Value Fund stated the following regarding Horace Mann Educators Corporation (NYSE:HMN) in its fourth quarter 2023 investor letter:
“Horace Mann Educators Corporation (NYSE:HMN) sells a complete line of insurance products (auto, home, annuities, life and supplemental) to America’s educators. They are a “kitchen table” insurance operation except their agents sell in the school break room. We think Horace Mann will be able to protect this profitable niche but worry they are subscale compared to national competitors and behind in upgrading their operations. In 2022 and 2023, Horace Mann suffered from rapid cost inflation and lagging pricing on their auto and home lines and a rapid rise in interest rates that hit the value of the securities on their balance sheet. We think Horace Mann’s stock price is cheap at roughly 10x normalized earnings at December 31, 2023 and are comfortable holding a mid-sized position.”
6. CNO Financial Group Inc (NYSE:CNO)
Number of Hedge Fund Investors: 16
Indiana-based financial services company CNO Financial Group Inc (NYSE:CNO) ranks sixth in our list of the dividend stocks with recent insider selling. On March 26 CNO Financial Group’s Inc (NYSE:CNO) CEO Gary C. Bhojwani dumped 9,434 shares of CNO Financial Group Inc (NYSE:CNO) at $26.87 per share. He had also sold 18,349 shares of CNO Financial Group Inc (NYSE:CNO) on March 21. Since then the stock price is almost flat.
As of the end of the fourth quarter of 2023, 16 hedge funds tracked by Insider Monkey had stakes in CNO Financial Group Inc (NYSE:CNO).
Click to continue reading and see 5 Dividend Stocks Insiders Are Selling.
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Disclosure. None. 10 Dividend Stocks Insiders Are Selling was initially published on Insider Monkey.