Five Favorite Dividend Stocks of Billionaire Mario Gabelli

As a renowned value investor, billionaire Mario Gabelli often invests in stocks that have a lot of intrinsic value and profits from value-maximizing developments that lie ahead such as mergers or spin-offs. In the current round of 13F filings, Gabelli’s GAMCO Investors revealed an equity portfolio worth $15.22 billion and in a previous article we have discussed his top five holdings (see article). However, aside from picking undervalued companies, Gabelli also has many dividend stocks among his favorite picks. For this article, we have identified five stocks that sport a dividend yield above 3% and that rank among the top holdings in GAMCO’s latest 13F filing.

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Let’s get back to GAMCO’s top dividend picks, though. On the first spot is Ryman Hospitality Properties Inc (NYSE:RHP), in which the fund holds 4.78 million shares as of the end of September, down by 5% on the quarter, worth $235.14 million, which makes the holding GAMCO’s third-largest in terms of value. As a real estate investment trust, it’s not surprising that Ryman Hospitality Properties Inc (NYSE:RHP)’s stock sports a dividend yield of 5.32%. The stock is almost flat in year-to-date terms, but the REIT has increased its dividend to $0.70 for the third quarter from $0.65 for the first two, and  from $0.55 paid for the fourth quarter of 2014. Its current dividend yield is one of the highest among hotel-focused REITs. Bernard Selz’s Selz Capital also disclosed ownership of 257,400 shares of Ryman Hospitality Properties Inc (NYSE:RHP) as of the end of September.

National Fuel Gas Co. (NYSE:NFG)‘s stock has lost over 24% since the beginning of the year, as weak oil and gas prices weighted on the whole E&P Industry. However, the company still pays a dividend of around $0.39, which gives its stock a yield of around 3.01%. GAMCO owns 3.45 million shares of National Fuel Gas as of September 30, down by 8% on the quarter. The stake was valued at $172.56 million at the end of September, but analysts are mostly bullish on National Fuel Gas Co. (NYSE:NFG) and have a consensus price target of $76.50, which indicates an upside of 46%. Therefore, it seems that National Fuel Gas Co. (NYSE:NFG) is worth sticking to until the energy prices rebound and benefit from dividend payments meanwhile. Eric Mandelblatt of Soroban Capital Partners may be sharing the same opinion as Soroban disclosed a new stake of 4.20 million shares in its 13F for the second quarter.

On the other hand, GAMCO boosted its position in AT&T Inc. (NYSE:T) during the third quarter. The fund reported holding 4.34 million shares, which indicate an addition of 4.24 million shares, while the total value of the stake stood at $141.41 million at the end of September. However, the increase came on the back of AT&T’s acquisition of DirecTV, which was GAMCO’s top holding at the end of June, containing 3.43 million shares. Under the terms of the acquisition, shareholders of DirecTV received 1.892 shares of AT&T Inc. (NYSE:T) and $28.50 in cash for each share of the acquired company. Still, the fact that GAMCO decided to stick to most shares of AT&T Inc. (NYSE:T) received in exchange for DirecTV shows that the investor sees some more potential for the stock. Meanwhile, the company pays a dividend of $0.47, which gives the stock a yield of 5.61%. During the second quarter, billionaires Jim Simons and Steve Cohen initiated stakes in AT&T.

Then there is GATX Corporation (NYSE:GMT), whose stock sports a dividend yield of 3.25%. As a railcar lessor, GATX’s stock has declined by 18% since the beginning of the year, as lower oil and other commodity prices reduced the demand for rail transportation. At a forward P/E of 9.3, the stock is cheap and will generate substantial profit when the commodity prices rebound. Meanwhile, GAMCO reduced its stake in GATX Corporation (NYSE:GMT) by 188,044 shares and reported ownership of 3.17 million shares worth $140.10 million. Charles Paquelet’s Skylands Capital is another shareholder of GATX Corporation (NYSE:GMT), holding 397,600 shares as of the end of September.

Finally General Mills, Inc. (NYSE:GIS) represents the fifth and the last stock in our compilation as GAMCO reported holding 2.48 million shares of the company worth $139.15 million. General Mills pays a dividend of $0.44, which gives the stock a yield of 3.03%. In an interview on Fox Business Network at the beginning of October, Mario Gabelli named General Mills, Inc. (NYSE:GIS) as one of his favorite companies. At a forward P/E of nearly 20.0, the stock might seem a bit expensive, but as a consumer defensive stock it represents a good long-term bet. Billionaire Ken Griffin’s Citadel Investment Group held 1.41 million shares of General Mills, Inc. (NYSE:GIS) at the end of June.

Disclosure: none