Below we presented the list of 5 Extreme Dividend Stocks with Huge Upside. For our detailed discussion and a more comprehensive list please see 15 Extreme Dividend Stocks with Huge Upside
5. Annaly Capital Management, Inc. (NYSE:NLY)
No of HFs: 27
Total Value of HF Holdings: $337 Million
The fifth extreme dividend stock with huge upside is NLY. The company is one of the leading diversified capital managers that invests in and finances residential and commercial assets. Recently, the company announced its Board of Directors has authorized a new share repurchase program. The company may repurchase up to $1.5 billion of its outstanding shares of common stock through December 31, 2021.
The top hedge fund holder of this stock is D.E Shaw’s DE Shaw, which had $143 million invested in the stock at the end of September. An insider purchased 200,000 shares at around $5. The stock is up 60% since then. NLY offers a 10.62% dividend yield at the moment.
4. New York Community Bancorp, Inc. (NYSE:NYCB)
No of HFs: 28
Total Value of HF Holdings: $218 Million
Headquartered in Westbury, New York, NYCB operates 225 branches located in New York, New Jersey, Ohio, Florida and Arizona. They are known as one of the leading producers of multi-family loans, focusing on non-luxury rent-regulated buildings that feature below-market rents. During the third quarter of 2020, the company reported assets of $54.9 billion.
Recently, the company announced several changes to its Board of Directors. In the announcement the board’s current non-executive chairman, Dominick Ciampa will remain as a director of both the company and bank boards. President and Chief Executive Officer, Thomas R. Cangemi commented,
“I would like to thank Mr. Ciampa for his service as Non-Executive Chairman for the past 10 years and I look forward to his continued involvement on the Board. Today’s announcement marks the next step in the evolution of the Company’s strong corporate governance practices. The combined experience of each of these directors will provide me and the other Board members valuable insights on a variety of matters as we move forward”.
The top hedge fund holder of this stock is Ken Griffin’s Citadel Investment Group, which had over $93 million invested in the stock at the end of September. An insider purchased 2,000 shares at around $10. The stock has remained the same since then. NYCB offers a 6.24% dividend yield at the moment.
3. Lumen Technologies (NYSE:LUMN)
No of HFs: 31
Total Value of HF Holdings: $762 Million
The third extreme dividend stock with huge upside is Lumen Technologies. The company was formerly known as CenturyLink and they rebranded in September 2020. LUMN offer communications, network services, security and cloud solutions. They are ranked 143 in the Fortune 500.
The top hedge fund holder of this stock is Mason Hawkins’ Southeastern Asset Management, which had over $635 million invested in the stock at the end of September. An insider purchased 265 shares at around $10. The stock has remained the same since then. Here is what Southeastern Asset Management said about LUMN in a 2019 investor letter:
CenturyLink (-19%,-1.72%), the fiber and telecom company, was the primary detractor to first quarter returns after a dividend cut. We were disappointed by that decision and filed a 13-D to enable us to become more active in the investment through seeking to improve the board, encouraging opportunistic asset sales and exploring creating tracking stocks for the company’s two segments. Private-market transactions of assets comparable to some of CenturyLink’s (CTL) fiber assets have been over 15X EBITDA, far above CTL’s depressed 5X EBITDA stock price. In addition to monetizing some of this fiber, separating the enterprise and consumer segments into distinct tracking stocks could help highlight the values and different opportunity sets for both. We believe that adding board members with experience in fiber and financial transactions can bring additional capital allocation discipline to drive value recognition. We maintain our support for Jeff Storey and his team operationally even while disagreeing about some capital allocation items. Storey bought $1 million in shares personally in the quarter, and CFO Neel Dev, as well as multiple directors, also increased their ownership of the stock.
2. Williams Companies Inc. (NYSE:WMB)
No of HFs: 38
Total Value of HF Holdings: $581 Million
WMB was mentioned as one of the 12 Best MLP and Pipeline Stocks to Buy Now. They are focused on natural gas processing and transportation. During the third quarter of 2020, the company announced a quarterly earnings of $0.27 per share. The company recently announced Ms. Stacey Dore as an independent director on the Board. She was a former senior vice president and general counsel of a publicly-traded real estate and investment trust that owned electric transmission assets. Chairman of the Board, Stephen W. Bergstrom said,
“We are excited to add Stacey’s broad experience to the Board as we further position Williams as a leader in the clean energy economy. We believe Stacey’s business acumen and analytical skills will benefit future decisions of the Williams Board as we execute our mission of delivering long-term value and growth for the company and its shareholders.”
The top hedge fund holder of this stock is Mason Hawkins’ Southeastern Asset Management, which had over $179 million invested in the stock at the end of September. An insider purchased 1,100 shares at around $13. The stock is up 61% since then. WMB offers a 7.51% dividend yield at the moment.
1. Altria Group, Inc. (NYSE:MO)
No of HFs: 47
Total Value of HF Holdings: $1.25 Billion
Altria tops our list of extreme dividend stocks with huge upside. MO is known as the world’s largest producer of tobacco, cigarettes and related products. And owns several largest cigarette companies including Philip Morris and John Middleton. The company ranks 23rd in the fortune 500. They were mentioned in the Top 10 Sin Stocks to Buy Now and in the 5 Dividend Stocks to Boost Cash Flow in 2021.
The top hedge fund holder of this stock is Jim Simons’ Renaissance Technologies, which had over $352 million invested in the stock at the end of September. An insider purchased 11,500 shares at around $40. The stock was up 2% since then. MO offers a 8.27% dividend yield at the moment.
Check out an article where Artko Capital mentioned that the stock’s low growth was not going to get them the returns they seek.
“Altria Group (MO) – We made an 9% Core Portfolio investment in Altria group at sub $40.00 in 2019 with the view that it was a good place to park cash at an 8%+ dividend yield with liquidity and a 15- 25% annual IRR upside. When the stock reached $50+ in early 2020 we took half of our position off the table and took the rest off back at $40 in the spring 2020 as we are positioning our portfolio to have significantly higher upside in the nanocap space as the economy and the small cap markets recover over the next few years. We may come back to MO in the future as it is a solid dividend yielding investment, but as we mentioned earlier, our strategy does involve off-the-beaten-path companies with an opportunity to get repriced on growth of revenues and earnings and Altria Group’s low growth was not going to get us the returns we seek given the repricing of the value segment of the small cap markets.”
Please also see 15 Best Dividend Stocks with Upside Potential and 10 Best Dividend Stocks for Passive Income
