Billionaire Ken Fisher’s Newest High Dividend Stock Picks

Billionaire Ken Fisher of Fisher Asset Management filed his latest 13F on October 20, revealing his holdings in U.S-traded equities as of September 30. Since then, we’ve covered the firm’s top overall picks, its top tech picks, top finance picks, and top healthcare picks. In this article, we’ll uncover four dividend stocks in which some of Fisher’s vast capital was moved into during the third quarter. Each of these stocks sports a current dividend yield of over 3.5%, and given Fisher’s investment, we can assume his deep analysis of each of these stocks has determined that they possess solid long-term growth potential.

Rexford Industrial Realty Inc (NYSE:REXR)

• Shares Owned by Fisher (as of September 30): 107,063
• Value of Fisher’s Shares (as of September 30): $1.48 Million

We’ll start with Rexford Industrial Realty Inc (NYSE:REXR), which has bumped its quarterly dividend payment up to $0.135 per share, providing a yield of 3.60%. The California-focused REIT added a number of new industrial properties to its fold in the third quarter, lifting its portfolio of properties in which it has ownership interests to 116. Among the new additions were a two-building industrial property in Central San Diego housing a combined 373,744 square feet, which it purchased for $19.3 million, and a 70,877 square-foot cold storage property in the Central Los Angeles submarket for $12.2 million. Rexford Industrial Realty Inc (NYSE:REXR) pulled in rental revenues of $23.3 million in the third quarter, and property net operating income of $17.1 million, each of which represented greater than 30% increases year-over-year. Ten investors in our database held a combined $76.40 million worth of Rexford Industrial’s shares as of June 30, accounting for 9.50% of its common shares.

Hedge funds and other big money managers like Fisher tend to have the largest amounts of their capital invested in large and mega-cap stocks like Apple Inc. (NASDAQ:AAPL) because these companies allow for much greater capital allocation. That’s why if we take a look at the most popular stocks among funds, we won’t find any mid- or small-cap stocks there. However, our backtests of hedge funds’ equity portfolios between 1999 and 2012 revealed that the 50 most popular stocks among hedge funds underperformed the market by seven basis points per month, showing that their most popular picks and the ones that received the bulk of their capital were not actually their best picks. On the other hand, their top small-cap picks performed considerably better, outperforming the market by 95 basis points per month. This was confirmed through backtesting and in forward tests of our small-cap strategy since August 2012. The strategy, which involves imitating the 15 most popular small-cap picks among hedge funds has provided gains of 102%, beating the broader market by over 53 percentage points (see the details).

We have three more high-dividend stocks for you to consider adding to your portfolio, as Fisher has, on the next page.

Chatham Lodging Trust (NYSE:CLDT)

• Shares Owned by Fisher (as of September 30): 65,538
• Value of Fisher’s Shares (as of September 30): $1.41 Million

Another REIT that was added to Fisher’s portfolio in the third quarter, Chatham Lodging Trust (NYSE:CLDT) pays a monthly dividend of $0.10, which gives the stock a dividend yield of 5.14%. Chatham Lodging Trust was held by three billionaires in our database and 16 investors overall, who held in aggregate 20.50% of the REIT’s shares on June 30. The REIT, which primarily invests in upscale hotels, has been successful in improving margins, and boasted an average rate of $160 in the third quarter and hotel EBIDTA margins of 46.7%. The firm is predicting double-digit FFO growth in 2016, and is enjoying the benefits of being majority-focused in several key markets that have thriving economies, including Seattle, Denver, Los Angeles, and Silicon Valley.

FS Investment Corporation (NYSE:FSIC)

• Shares Owned by Fisher (as of September 30): 15,362
• Value of Fisher’s Shares (as of September 30): $143,000

Despite its sterling dividend yield of 9.01%, FS Investment Corporation (NYSE:FSIC) had little support from the smart money tracked by Insider Monkey as of June 30, as just eight investors held 0.40% of the company’s shares. On the other hand, insiders of the company have shown more bullishness, jumping on shares in late-July after a big dip, and continuing to buy more shares in the following months. The stock has since cratered two more times and rebounded quickly each time, though it has yet to fully make up the losses from its big dip in the second half of September. With a forward P/E slightly under 10.0 and the robust dividend payments, shares of FS Investment Corporation (NYSE:FSIC) do appear palatable.

DHT Holdings Inc. (NYSE:DHT)

• Shares Owned by Fisher (as of September 30): 153,822
• Value of Fisher’s Shares (as of September 30): $1.14 Million

DHT Holdings Inc. (NYSE:DHT) was a high dividend stock that hedge funds were fleeing during the second quarter, as ownership among the investors that we follow fell to 33 from 40. However, after shares took a big dip in August, it appears that investors are finding the shares of the crude oil tanker operator appealing again. In addition to Fisher’s new holding, Canyon Capital Advisors led by Joshua S. Friedman and Mitchell R. Julis, made a big purchase of DHT Holdings Inc. (NYSE:DHT) shares in the middle of October. DHT Holdings recently announced that it will hike its quarterly dividend to $0.18 per share, which will offer shareholders a dividend yield of 9.41%.

Disclosure: None