10 Hedge Fund Favorites for Earnings, Dividend Yield

If you like buying earning power at a discount, earnings yield is a good place to start. It is one of the most useful metrics available to compare the relative valuation of stocks to one of the more predictive measures of future stock returns: EPS. Instead of buying US Treasuries that yield less than 3% per year, consider the following stocks - all of which produce earnings larger than 4% of their purchase price and pay a dividend. The top ten list represents stocks with the highest earning yield from the top hedge fund holdings sorted by dividend yield.1. Phillip Morris International (PM)PM has a market cap of $97B with an earnings yield of 6.6% and dividend yield 4.4%. Phillip Morris revenues were $15.6B in the latest quarter [see call transcript]. The company is growing top line revenue near 20% YoY with 10%+ profit margins. Investors should note the debt to equity ratio which is approaching 6 and up significantly from 2008 levels, when it was just over 1.... Read more