As mentioned in posts previously, here are lots of reasons company insiders sell their own companies’ stock. They may diversify or buy a new mansion, or they may know that business is going down in a few months. But there is only one reason they buy with their own money: to make more.
And that is especially true of insiders at companies that pay dividends. For a highly paid executive, dividend income is taxed at a significantly lower rate than ordinary income.
Let’s take a look at the highest-yielding companies with more insider buying than selling.
1. Icahn Enterprises
The company pays a quarterly dividend of $2 per share, which is 12.2% on an annual basis.
Alvin Krongard, director, bought 36,000 shares, and Carl Icahn, founder, purchased another 8.3 million shares, which will provide him with an additional $66 million a year in income.
2. BlackRock TCP Capital Corp.
It currently pays a $0.30 per share quarterly dividend, which comes out to a 9.3% annual yield.
recently, insiders have added a total of 23,200 shares. One of these insiders was CEO Howard Levkowitz, who bought 20,000 shares. That increased his stake to 186,318 shares.
3. Owl Rock Capital
Owl Rock Capital has a generous 8.8% dividend yield. In November, Director Alexis Maged bought 15,000 shares for $200,000.
Tracking insider buying is already good but combining it with a strong dividend yield, and you have a recipe for outperformance.
Sven Franssen