5 'Smart Money' Dividend Stocks to Buy

A look at high-conviction income plays from five superinvestors

Jul 31, 2012, 1:35 pm EDT | By Charles Sizemore, Editor, The Sizemore Investment Letter

Joel Greenblatt: Northrop Grumman

Yield: 3.3%

Joel Greenblatt of Gotham Capital is one of my favorite gurus. His “Magic Formula” is one of the best stock screeners I have ever come across, and he gives away access to it for free. I’ve stumbled across more great investment ideas than I can count from browsing his site, and I recommend that you give it a look.

Greenblatt is heavily invested in defense firms these days, and one that caught my eye was Northrop Grumman Corporation (NYSE:NOC).

Northrop Grumman is not a “high conviction” pick of Greenblatt, per se, as its weighting is not materially higher than any of his other holdings. It is, however, a highly profitable company selling at a very attractive price. Northrop Grumman trades for just 9 times expected 2013 earnings and yields an impressive 3.3% in dividends.