Chesapeake Energy (Mohnish Pabrai)
Dividend Yield: 1.8%
Our next guru is one of my very favorites, Mohnish Pabrai.
If you haven’t read Pabrai’s book, The Dhandho Investor, you are costing yourself money. It’s one of the best books on value investing written in the last decade. However, while I love following Pabrai, I’m not the biggest fan of his current portfolio, which is too concentrated and too heavy in banks for my liking.
That said, natural gas exploration and development company Chesapeake Energy (NYSE:CHK) is a fairly recent addition worth noting.
Calling Chesapeake a “dividend stock” might be a stretch, as it yields only 1.8% and it operates in a risky business in which dividend cuts are a real possibility. Its high debt levels and a scandal last year involving outgoing CEO Aubrey McClendon have soured investor sentiment toward the stock.
This is a riskier play than, say, Archer Daniels Midland, but Chesapeake is a good way to play a long-term boom in natural gas, and Pabrai is betting heavily that the worst is behind the company. As of his most recent filings, Pabrai’s fund had 17% of its portfolio in Chesapeake.