Insiders Are Buying These 5%+ Yields. Here's the Catch.

Three companies with dividend yields above 5% have drawn insider purchases this month, according to SEC filings. The buys span real estate, financial services, and energy – a mix that points to company-level conviction rather than a sector-wide bet.

American Assets Trust (AAT), a San Diego-based REIT with office, retail, and multifamily properties across California, Oregon, Washington, and Hawaii, saw its chairman and CEO add to his position. The stock trades near its 52-week low, pushing the dividend yield past 6%. REITs have been under pressure from higher interest rates, which raise borrowing costs and make the sector's income stream less competitive against risk-free alternatives. AAT's portfolio leans toward West Coast office space, a segment that has struggled with hybrid-work vacancy. The insider buying suggests management sees the selloff as overdone relative to the cash flow from stabilized properties.

RLI Corp (RLI), a specialty insurer based in Peoria, Illinois, also drew insider purchases. RLI writes niche property and casualty coverage – marine, construction, surety – where pricing tends to be stickier than in standard lines. The stock yields about 5.1%. Insurers have benefited from a hard market cycle that pushed premiums higher over the past two years, though some analysts expect pricing to moderate in 2025. The insider buys came after a pullback from the stock's late-2024 highs.

TXO Energy Partners (TXO), a coal-royalty and energy-play structured as a master limited partnership, saw insider buying at yields above 11%. The partnership owns mineral rights in the Powder River Basin and Appalachia, collecting royalties on coal production. Coal demand has been under structural pressure from natural gas and renewables. TXO's payout is tied to existing contracts with utilities that still run coal-fired plants. The high yield reflects the market's skepticism about the longevity of those cash flows. Insider buying at that yield level implies the partnership's distributable cash flow is more durable than the stock price suggests.

What ties these three together is not the sector but the signal. Insider buying at companies with yields above 5% is a bet that the dividend is safe and the stock is cheap. The risk is that the yield itself is a warning – that the market is pricing in a cut. The buyers are betting against that outcome with their own capital.

For a trader watching these names, the question is whether the insider signal is early or wrong. REITs and insurers both face headwinds from interest rates that are not coming down as fast as the market hoped six months ago. Coal royalties face a secular demand decline that no insider buy can reverse. The purchases are worth tracking. They are not a trade in themselves.

AAT and RLI have AlphaScala stock pages with further data. The insider filings are public and searchable on the SEC's EDGAR system.