Last year, shares owned by corporate insiders were dumped faster than the main character of an ’80s teen movie when the captain of the football team walks by.
As of December 1, CEOs and other insiders sold $69 billion worth of their shares in 2021, a new annual record and 30% more than 2020.
Insiders sell for a variety of reasons, including estate planning and tax management. But a record number of insider sales should make you a little nervous.
On the flip side, when insiders buy, it is for one reason: They believe that the stock is going higher and that they will make money.
If you’ve been reading Wealthy Retirement for even just a little while, you know I’m the dividend guy. I wrote the book on getting rich with dividends, appropriately named Get Rich with Dividends.
So I recently decided to take a look at the highest-yielding dividend stocks insiders were buying rather than selling.
Below are three of the highest-yielding dividend payers whose insiders are expressing confidence in their companies and putting their money where their mouths are…
Artisan Partners Asset Management (NYSE: APAM)
This investment firm, with more than $169 billion under management, has a variable dividend policy. Over the past four quarters, it has paid $3.92 per share in dividends, which equals a yield of 8.4%. Annualizing the latest $1.07 per share dividend comes out to a yield of 9.2%.
Independent Director Tench Coxe, who also serves on the board of directors at Nvidia (Nasdaq: NVDA), bought $10 million worth of Artisan Partners’ stock on December 14, more than tripling his holdings.
The current dividend will pay him nearly $1 million a year.
Claros Mortgage Trust (NYSE: CMTG)
Claros Mortgage Trust just went public in November. When a company goes public, executives often sell shares and cash out.
Not this mortgage real estate investment trust’s CEO and chairman, Richard Mack.
In December, he bought $1.9 million worth of shares in the open market, increasing his holdings by more than 10%.
Starwood Property Trust (NYSE: STWD)
This hotel real estate investment trust’s CEO, Barry Sternlicht, bought 217,500 shares worth more than $5 million on December 20. On the same day, the company’s president, Jeffrey DiModica, acquired 6,500 shares for more than $148,000.
Insider buying is not a guarantee that a stock will go higher. But when the leaders of a company buy shares with their own money, that is a vote of confidence and an indication that business is strong.
Plus, when the company pays dividends, the insiders, who usually have substantial holdings, get another large check every quarter.
I expect to see plenty more insider selling in 2022. Keep your eye on the stocks insiders are buying instead.