3 Top-Performing Dividend Stocks That Billionaires Keep Investing In

When it comes to investing on Wall Street, there are a plethora of options available to individuals looking to grow their wealth. From individual stocks to exchange-traded funds (ETFs), the choices are endless. However, one investment strategy that has stood the test of time is investing in high-quality dividend stocks.

A recent report from investment advisory firm Hartford Funds highlighted the superior performance of dividend-paying companies over their non-paying counterparts. According to the report, dividend-paying companies delivered an annualized return of 9.17% over the previous half century (1973-2023), while being less volatile compared to the broader S&P 500 index. In contrast, non-dividend-paying companies yielded a lower 4.27% annualized return over the same period and were more volatile.

Despite the overall outperformance of dividend stocks, not all income stocks have been successful investments. Some ultra-high-yield dividend stocks, with yields significantly higher than the S&P 500, have underperformed in recent years. Surprisingly, these underperforming stocks have caught the attention of billionaire investors, as evidenced by the latest Form 13F filings.

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Three popular ultra-high-yield dividend stocks that billionaire investors have been buying include Ford Motor Company, Walgreens Boots Alliance, and AT&T. Let’s take a closer look at why these stocks have attracted the interest of some of the top money managers on Wall Street.

1. Ford Motor Company (5.71% yield)
Ford, with its nearly 6% dividend yield, has been a favorite among billionaire investors in the second quarter. Despite facing challenges such as higher costs due to recalls and losses from its electric vehicle segment, Ford has a strong brand presence and a dominant market share in the truck segment. The company’s solid capital position and focus on profitability make it an attractive value play for investors seeking income and potential capital appreciation.

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2. Walgreens Boots Alliance (9.24% yield)
Walgreens, with its high dividend yield surpassing 9%, has seen its stock price decline significantly over the past five years. However, the company’s new CEO, Tim Wentworth, is implementing turnaround strategies to improve profitability. By closing underperforming stores and investing in digital capabilities, Walgreens aims to enhance its competitive position in the evolving healthcare industry.

3. AT&T (5.81% yield)
AT&T has faced challenges in the legacy telecom industry but has made significant progress in strengthening its balance sheet and investing in its network infrastructure. With a diverse business model and improved financial position post the spin-off of WarnerMedia, AT&T offers a stable dividend yield of nearly 6% to investors.

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In conclusion, while ultra-high-yield dividend stocks may not always be the top performers in the market, they can still offer value to income-focused investors, especially when bought at the right price. By following the strategies of billionaire investors and conducting thorough research, individuals can identify high-quality dividend stocks that have the potential to generate attractive returns over the long term.

At Extreme Investor Network, we provide valuable insights and analysis on dividend investing and other financial topics to help our members make informed investment decisions. Stay tuned for more exclusive content and expert advice on maximizing your investment portfolio.