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If they buy, we buy too.
Or at least we under consideration that.
If there’s anything better than a large dividend, it’s one that’s gobbled up by company insiders. We’re talking about executives, directors, and other executives who are closer to the action than analysts, reporters, and investors expect.
Most insiders are sitting on their hands right now. And who could blame them, considering its hilarious background? But three executives in particular say:
Our stock is cheap. By the way, our dividend is up to 7.5%, but it’s safe. We participate with our own cash.
Who is this insider? And more importantly –who what do they work for? (Thanks, Austin Powers.) Well, they run companies that offer hefty dividends. Let’s take a look.
Western Midstream Partners LP (WES)
Distribution yield: 7.5%
Recent notable purchases:
- Director Kenneth F. Owen: 7,000 shares ($237,720) on February 26, 2024
- Director David J. Schulte: 800 shares ($27,392) on February 27, 2024
- Director Oscar K. Brown: 7,000 shares ($236,218) on February 28, 2024
- Director Lisa A. Stewart: 5,000 shares ($170,625) 2024/2/28 – 2024/3/6
- Michael P. Eure, President and Chief Executive Officer: 5,000 shares ($168,250) on March 1, 2024
First Western Midstream Partners LP (WES)manages approximately 16,000 miles of pipeline spanning 24 gathering systems, 75 treatment and treatment facilities, seven natural gas pipelines and 15 crude oil and NGL pipelines. The company’s core assets are located in the southwestern and western United States in Delaware and the DJ Basin, with some assets also located in Pennsylvania.
When it comes to insider buying, you often need to read the tea leaves to guess what management is optimistic about.
In the case of WES, it is very likely that you will be one of two drivers.
Western Midstream indicated in its fourth quarter 2023 report that it plans to increase its distribution by 52% to 87.5 cents per unit. This would increase the yield to more than 10% at current prices.
So even though a group of WES insiders have collectively bought nearly 25,000 shares in the past month or so (total purchases valued at $840,205) in order to collect even more distributions, it’s not worth much. Not surprising.
However, there is also the possibility that WES’s directors and officers may be seeking to profit from the sale of major shares. Occidental Petroleum (OXY) owns 49% of Western Midstream and controls the company through its general partner ownership.
Both stories broke within a day of each other, and the stock price rose a total of about 15% in less than a week.
Western Midstream itself has said it has not started the sale process, so it is at least possible that WES will not be sold, in which case the stock price would likely give up some of its profits. And the stock is a little frothy after February trading.
I would also like to point out that Western is a master limited partnership (MLP) and has the added complexity of K-1 tax forms, which I try to avoid.
Capitol Federal Finance (CFFN)
Dividend yield: 6.1%
Recent notable purchases:
- Chief Loan Officer Rick Jackson said: 12,990 shares ($74,321) From February 21, 2024 to March 1, 2024
- Director Huey Morris: 9,000 shares ($50,820) From February 28, 2024 to March 4, 2024
As long-time readers may know, Capitol Hill Financial (CFFN)former hidden yield Held since last year.
For those who don’t: Capitol Federal is the parent company of Capitol Federal Savings Bank, a Topeka, Kansas-based regional bank that has been in business for more than 130 years. The bank, which has approximately 50 locations, specializes in residential placements in both Kansas and Missouri.
Reaching $10 billion in assets would require increased scrutiny and oversight by the Consumer Financial Protection Bureau. Surveillance will be tighter and communication will be more frequent.
After enjoying an excellent total return in a very short period of time, we hidden yield Just over seven years ago, I improved my portfolio in the face of a significant decline in book value.
It is no exaggeration to say that the timing of our withdrawal was accurate.
CFFN spent most of 2023 in a downturn due to margin issues due to efforts to keep assets below $10 billion. This amount is an important metric that will draw further scrutiny from the Consumer Financial Protection Bureau.couldn’t even pay special dividendThat’s not unusual for most companies, but it’s certainly disappointing for Capitol Hill, which has been paying at least once a year (and often twice) for years.
The bank is now in an interesting situation. In a major restructuring, the company sold 94% of its securities, or $1.3 billion, to create liquidity that CFFN was able to use to move into more commercial lending.
Wall Street isn’t yet fully on board — stocks fell double digits in 2024 after a recovery in late 2023 — but insiders think their plans will come to fruition. It seems there is. Insiders Rick Jackson and Direct Huey Morris recently bought approximately 22,000 shares for approximately $125,000.
Broadstone Net Lease (BNL)
Dividend yield: 7.5%
Recent notable purchases:
- Director Michael A. Koch: 10,000 shares ($146,700) on February 26, 2024
- Chief Executive Officer John David Moragne: 10,000 shares ($147,700) on February 26, 2024
- Chief Financial Officer Kevin Fennell said: 4,000 shares ($58,520) on February 27, 2024
- Director Shekhar Narasimhan: 5,000 shares ($74,350) on February 28, 2024
Broadstone Net Lease (BNL) An online rental REIT specializing in single-tenant commercial facilities. And the company’s executives are particularly enthusiastic about the company’s stock right now, with insiders buying 29,000 shares worth about $427,000 near the end of February.
At least they might just take another slide back to the basement.
Broadstone currently boasts 796 properties across 44 provinces and four provinces in Canada, with over 99% of those properties currently leased. Industrial properties account for just over half of annual base rents, followed by healthcare (18%), restaurants (13%), retail (11%) and offices (6%). However, BNL is committed to focusing on industrial, restaurant and retail businesses, with plans to sell 75 healthcare assets (approximately 11% of the company’s total ABR). Of these, 37 properties (5.1% of ABR) are already under contract.
The new portfolio focus is a benefit for BNL, at least in my view. But it’s almost certain to detract from its already weak performance in the short term.
Brett Owens is a top investment strategist in the United States. contrarian outlook. For more great income ideas, get his latest special report for free. Early Retirement Portfolio: Earn Huge Dividends Every Month Forever.
Disclosure: None
