{"id":36617,"date":"2013-03-04T18:24:28","date_gmt":"2013-03-04T23:24:28","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=36617"},"modified":"2013-03-10T21:34:08","modified_gmt":"2013-03-11T01:34:08","slug":"three-dividend-paying-guru-stocks","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/03\/04\/three-dividend-paying-guru-stocks\/","title":{"rendered":"Three Dividend-Paying Guru Stocks"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

2013 might rightfully be called the year of the \u201cClash of the Gurus\u201d to anyone watching the news.\u00a0 The biggest is the very public slugfest between activist investors Bill Ackman<\/a><\/strong> and Carl Icahn<\/a><\/strong> over nutritional supplements company Herbalife (NYSE:$<\/span>HLF<\/a>).<\/b> \u00a0Ackman is short 20 million shares of Herbalife at last count, and Icahn is long at least 14 million.<\/p>\n

Taking a slightly lower profile than Icahn, Third Point\u2019s Daniel Loeb<\/a><\/strong> also took an anti-Ackman long position of over 8 million shares, though he reportedly\u00a0 slightly reduced that position in February.<\/p>\n

Ackman and Icahn\u2019s faceoff on CNBC<\/a> got as close to something from the Jerry Springer Show <\/i>as two Wall Street titans in suits can get, with each essentially calling the other a liar.\u00a0 One of these guys is going to be wrong in a big way, and it\u2019s going to cost their investors a fortune.<\/p>\n

I recommend you run as far away from Herbalife as you can right now.\u00a0 You don\u2019t want to get caught in a nasty war of attrition between two masters of the universe.<\/p>\n

Instead, I\u2019m going to highlight three solid dividend-paying stocks being accumulated by well-known gurus.<\/p>\n\n\n\n\n\n\n
Guru<\/td>\nStock<\/td>\n\n

Ticker<\/p>\n<\/td>\n

\n

Yield<\/p>\n<\/td>\n<\/tr>\n

Warren Buffett<\/td>\nArcher Daniels Midland<\/td>\n\n

ADM<\/p>\n<\/td>\n

\n

2.4%<\/p>\n<\/td>\n<\/tr>\n

Mohnish Pabrai<\/td>\nChesapeake Energy<\/td>\n\n

CHK<\/p>\n<\/td>\n

\n

1.8%<\/p>\n<\/td>\n<\/tr>\n

Prem Watsa<\/td>\nJohnson & Johnson<\/td>\n\n

JNJ<\/p>\n<\/td>\n

\n

3.2<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

It\u2019s not a guru list without a mention of Warren Buffett<\/a><\/strong>.\u00a0 Buffett made news with his acquisition of H. J. Heinz Company (NYSE:$<\/span>HNZ<\/a>).\u00a0 <\/b>But his Berkshire Hathaway (NYSE:$<\/span>BRK-A<\/a>)<\/b> has been steadily increasing its position in several companies, including DaVita HealthCare Partners (NYSE:$<\/span>DVA<\/a>)<\/b> and old standby Wells Fargo (NYSE:$<\/span>WFC<\/a>).<\/b><\/p>\n

But as far as conservative dividend payers go, Buffett\u2019s most notable addition is Archer Daniels Midland (NYSE:$<\/span>ADM<\/a>)<\/b>, the Midwestern food processing company.\u00a0 Archer Daniels is about as un-sexy as an investment can be, which is precisely why it belongs in Berkshire\u2019s portfolio.\u00a0 It also happens to be a Dividend Achiever that has raised its dividend every year since 2002.\u00a0 At current prices, Archer Daniels yields a respectable 2.4% in dividends.<\/p>\n

Our next guru is one of my very favorites, Mohnish Pabrai<\/a>.<\/strong>\u00a0 If you haven\u2019t read Pabrai\u2019s book, The Dhandho Investor<\/a><\/i><\/strong>, you are costing yourself money.\u00a0 It\u2019s one of the best books on value investing written in the last decade.<\/p>\n

While Pabrai is one of my favorite gurus to follow, I\u2019m not the biggest fan of his current portfolio.\u00a0 It\u2019s too concentrated and too heavy in banks for my liking.<\/p>\n

That said, natural gas exploration and development company Chesapeake Energy (NYSE:$<\/span>CHK<\/a>)<\/b> is a fairly recent addition worth noting.\u00a0 Calling Chesapeake a \u201cdividend stock\u201d might be a stretch, at it yields only 1.8% and it operates in a risky business in which dividend cuts are a real possibility.<\/p>\n

High debt levels and a scandal last year involving CEO Aubrey McClendon have also soured investor sentiment towards the stock. \u00a0This is a riskier play than, say, Archer Daniels Midland, but Chesapeake is a good way to play a long-term boom in natural gas, and Pabrai is betting heavily that the worst is behind the company.\u00a0 As of his most recent filings, Pabrai\u2019s fund had 17% of its portfolio in Chesapeake.<\/p>\n

And finally, we get to Prem Watsa<\/a><\/strong> of Fairfax Financial, commonly known as the \u201cWarren Buffett of Canada\u201d for both his investment acumen and his use of insurance companies as investment vehicles.<\/p>\n

Watsa\u2019s biggest current position is one you have to have an iron stomach to hold: smartphone also-ran BlackBerry (Nasdaq:$<\/span>BBRY<\/a>).<\/b><\/p>\n

BlackBerry doesn\u2019t pay a dividend at this time, and I consider the company\u2019s outlook too uncertain to recommend at this time.\u00a0 I do, however, like his number two holding, health care giant Johnson & Johnson (NYSE:$<\/span>JNJ<\/a>)<\/b>.<\/p>\n

Johnson & Johnson is the ultimate dividend-paying machine, raising its dividend for 50 consecutive years, and currently yields 3.2%.\u00a0 And after underperforming the market for years, J&J is finally showing signs of life.\u00a0 The stock is up nearly 10% in 2013.\u00a0 If Watsa\u2019s track record is any indication, I would expect more gains to come.<\/p>\n

Disclosures: Sizemore Capital is long JNJ.\u00a0<\/i><\/p>\n

SUBSCRIBE\u00a0<\/a><\/strong>to\u00a0Sizemore Insights<\/em>\u00a0via e-mail today.<\/p>\n

The post Three Dividend-Paying Guru Stocks<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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