High-Quality Dividend Stocks that Billionaires are Betting on
Investing on Wall Street offers countless strategies to grow wealth, but one approach that has proven successful is buying and holding high-quality dividend stocks. According to a report by Hartford Funds, dividend-paying stocks have outperformed non-payers, with a data set showing a substantial difference in annual returns over a half-century (9.17% vs. 4.27% between 1973 and 2023).
Institutional investors with at least $100 million in assets recently filed Form 13F with the SEC, revealing trends in their investment choices. One surprising trend was the attraction towards ultra-high-yield dividend stocks, defined as stocks with yields at least four times higher than the S&P 500 (currently at 1.35%).
Verizon Communications, with a 6.58% yield, caught the attention of three billionaire investors in the first quarter. Despite stock underperformance, the company benefits from providing essential services like wireless access and broadband, ensuring steady cash flow. The ongoing 5G revolution has also been a positive driver for Verizon’s growth.
Pfizer, yielding 5.99%, saw interest from five billionaire money managers in the first quarter. The company’s success with its COVID-19 products has led to market skepticism, but Pfizer’s non-COVID sales have continued to expand, making it an attractive investment with solid growth potential.
AGNC Investment, an ultra-high-yield stock with a 15.06% yield, was purchased by five billionaires in the first quarter. Despite industry challenges, AGNC’s investment portfolio and potential for gains in a normalized yield curve make it an intriguing choice for long-term investors.
By observing the stock picks of billionaires, investors can gain valuable insights into potential growth opportunities. Ultra-high-yield dividend stocks like Verizon Communications, Pfizer, and AGNC Investment offer attractive yields and growth potential, making them worth considering for a diversified portfolio.
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