Dividend-News

5 Dividend Stocks With Recent Insider Buying

Published Fri, 04 Sep 2020 18:34:34 -0400 on Seeking Alpha

Seeking AlphaDividend Quick Picks5 Dividend Stocks With Recent Insider BuyingSep. 4, 2020 6:34 PM ET|| Includes: AGR, DOC, IVZ, RILY, RILYG, SWXby: Cashflow CapitalistCashflow Capitalist High Yield LandlordBecome a “Passive Landlord” with our 8% Yielding Real Estate Portfolio.SummaryI like seeing insiders buy stock in the companies that I own.
All but one of the six stocks I highlighted in an April 3rd article about companies with insider buying have outperformed the market on a total return basis since then.
I present five more dividend-paying stocks (that I own) with recent insider buying.
On the list is a healthcare REIT, a renewables-focused utility company, a natural gas utility, and two financial services companies.
Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise. -Peter Lynch
Investment Thesis
I love it when I see insiders buy their own company's stock, especially when I also own a partial stake in that company.
Not only does it increase the alignment of interests between management/directors and shareholders, it also signals that at least some insiders believe the stock is undervalued. After all, insiders are almost always rewarded with company stock as part of their compensation. It has become a significant portion of executive compensation packages over the years. Sure, sometimes this stock is restricted (requires the fulfillment of certain conditions before it can be transferred), and sometimes insiders are granted options to purchase the stock below market price. But the point is that insiders usually have other means of acquiring stock; they don't need to plunk their own money down to buy shares.
That's what makes it meaningful when they do buy shares on the open market. In fact, as I've written about previously, academic studies have demonstrated the strong tendency for stocks to outperform after insider buying. In my July 2nd article highlighting several... Read more