In this article, we discuss the top 10 dividend stock picks of billionaire Ken Fisher. If you want to skip our detailed analysis of these stocks, go directly to Billionaire Ken Fisher’s Top 5 Dividend Stock Picks.
Ken Fisher is one of the most well-known hedge fund managers on Wall Street. The portfolio of his hedge fund, Fisher Asset Management, was more than $159 billion at the end of June 2021 with the top holdings concentrated in the technology, healthcare, and financial sectors. The top ten holdings comprise over 31% of the entire portfolio. According to the latest filings, the portfolio value of the fund jumped over 18% billion between March and June this year. Fisher has a personal net worth of more than $6 billion.
During the second quarter, the billionaire, through his hedge fund, made new purchases in 86 stocks, bought additional stakes in 376, sold out of 76, and reduced holdings in 417 stocks. Over the years, Fisher has championed an investment strategy that compares the share price against expectations of growth, making handsome returns in the process. His dividend stocks picks have especially outshone the market, making him a legend in the value investing universe even though his portfolio is growth heavy.
Some of the top dividend stock picks in the Fisher Asset Management portfolio at the end of the second quarter of 2021 included The Home Depot, Inc. (NYSE:HD), Caterpillar Inc. (NYSE:CAT), and Walmart Inc. (NYSE:WMT), among others discussed in detail below. The returns of the hedge fund led by Fisher have consistently beat market benchmarks like the S&P 500 over the past few years, earning Fisher cult-like status on Wall Street and indeed around the world.
Our Methodology
With this context in mind, here is our list of the top 10 dividend stock picks of billionaire Ken Fisher. These were picked from the investment portfolio of Fisher Asset Management at the end of the second quarter of 2021.
The list is compiled according to the value of each holding in the portfolio of Fisher Asset Management. The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Billionaire Ken Fisher’s Top Dividend Stock Picks
10. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 42
Forward Dividend Yield: 3.25%
Analysts have been bullish on 3M Company (NYSE:MMM) stock since the company posted strong earnings for the second quarter in late July. Advisory Langenberg recently upgraded the stock to Buy from Hold with a price target of $210. Wells Fargo had initiated the stock at Equal Weight with a $179 target on October 7. The company smashed market expectations on earnings per share and revenue in the second quarter by $0.31 and $360 million respectively.
According to 13F filings, Fisher Asset Management owned 5.3 million shares in 3M Company (NYSE:MMM) worth over $1 billion at the end of the second quarter of 2021, representing 0.67% of the portfolio of the fund.
Out of the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in 3M Company (NYSE:MMM) with 1.1 million shares worth more than $235 million.
Just like The Home Depot, Inc. (NYSE:HD), Caterpillar Inc. (NYSE:CAT), and Walmart Inc. (NYSE:WMT), 3M Company (NYSE:MMM) is one of the dividend stocks attracting the attention of elite investors.
9. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 108
Forward Dividend Yield: 2.40%
JPMorgan Chase & Co. (NYSE:JPM) is one of the most trusted names in the banking sector and many elite investors have bullish views on the stock. The company has strong fundamentals and recently had stock price targets raised at advisors like BMO Capital, Credit Suisse, Jefferies and Barclays. The company beat market expectations on revenue in the third quarter by $0.74.
According to the latest data, Fisher Asset Management owned 6.9 million shares in JPMorgan Chase & Co. (NYSE:JPM) at the end of June 2021 worth more than $1 billion, representing 0.67% of the portfolio of the fund.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in JPMorgan Chase & Co. (NYSE:JPM) with 6.9 million shares worth more than $1 billion.
In addition to The Home Depot, Inc. (NYSE:HD), Caterpillar Inc. (NYSE:CAT), and Walmart Inc. (NYSE:WMT), JPMorgan Chase & Co. (NYSE:JPM) is one of the dividend stocks that hedge funds are buying.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and JPMorgan Chase & Co. (NYSE:JPM) was one of them. Here is what the fund said:
“After a strong performance in 2019, we wrote this about our bank stocks in last year’s report: “There will be another recession sooner than later, and our banks will see larger loans losses, but we think this is more than priced into the stock, and our banks are well reserved for that eventuality.” Little did we know “sooner” really meant “a few weeks from now.” Despite the economic shock, the banks still have huge capital cushions that can absorb large loan losses. Our remaining bank investments, JPMorgan and Bank of America, increased their reserves significantly at the beginning of the Covid-19 crisis in anticipation of imminent loan defaults, but with the government stimulus and perhaps a more resilient economy than many would have guessed, actual loan losses are up only slightly. They might happen later in 2021, but with an additional stimulus package and the vaccine rolling out, the large-scale losses may not be as bad as most people predicted. The bigger drag on the banks’ earnings power is lower rates, which in our opinion will persist for a long time. Despite this drag, we estimate both JPMorgan and Bank of America will continue to grow revenue and earnings over the next few years, while we believe their stocks remain bargains in a somewhat expensive market. JPMorgan’s earnings per share declined 17% last year, and its stock returned -5.5%. Bank of America’s earnings, which are more sensitive to interest rates, were down 32%, and its stock returned -11.6%.”
8. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 21
Forward Dividend Yield: 9.73%
Mining stocks have soared as iron ore prices skyrocket amid a crackdown against the mining industry in China and increased demand for the metal in the post-pandemic economy. Rio Tinto Group (NYSE:RIO), a mining firm based in the United Kingdom, has benefited from this environment. Exane BNP Paribas analyst Sylvain Brunet recently upgraded the stock to Outperform from Neutral with a price target of GBP5,630.
Securities filings reveal that Fisher Asset Management owned 12.9 million shares in Rio Tinto Group (NYSE:RIO) at the end of the second quarter of 2021 worth over $1 billion, representing 0.68% of the portfolio of the fund.
Out of the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in Rio Tinto Group (NYSE: RIO) with 1.8 million shares worth more than $156 million.
Along with The Home Depot, Inc. (NYSE:HD), Caterpillar Inc. (NYSE:CAT), and Walmart Inc. (NYSE:WMT), Rio Tinto Group (NYSE:RIO) is one of the dividend stocks on the radar of institutional investors.
7. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 105
Forward Dividend Yield: 1.35%
Although most biotech stocks operate in the high-growth domain, UnitedHealth Group Incorporated (NYSE:UNH) is one healthcare firm that has made a name for itself in the value investing universe. The company recently smashed market predictions on earning per share and revenue in the third quarter, raising guidance numbers and prompting price target raises from Evercore ISI and Credit Suisse.
Regulatory filings show that Fisher Asset Management owned more than 2.8 million in UnitedHealth Group Incorporated (NYSE:UNH) at the end of June 2021 worth $1.1 billion, representing 0.71% of the portfolio of the fund.
At the end of the second quarter of 2021, 105 hedge funds in the database of Insider Monkey held stakes worth $13 billion in UnitedHealth Group Incorporated (NYSE:UNH), up from 89 in the preceding quarter worth $12 billion.
The Home Depot, Inc. (NYSE:HD), Caterpillar Inc. (NYSE:CAT), and Walmart Inc. (NYSE:WMT) are some of the top dividend stocks to buy now, just like UnitedHealth Group Incorporated (NYSE:UNH).
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and UnitedHealth Group Incorporated (NYSE:UNH) was one of them. Here is what the fund said:
“A good way to conceptualize how we think about portfolio construction is to picture a pyramid. At the bottom of the pyramid are the durable compounding growth companies that form the strong foundation, resilience and consistency for the Strategy. We think these companies should comprise just under half of portfolio assets and feature annual revenue growth rates ranging from two times GDP up to 20% as well as healthy free cash flow generation.
UnitedHealth Group, a name we have owned in the Strategy since 1992, is a good example of a long-term compounder, having grown its revenue base from approximately $600 million to north of $260 billion over that time frame. It remains constantly focused on investing in new growth drivers such as telemedicine and health care analytics. Broadcom and Comcast have delivered similar long-term appreciation through a combination of organic growth, capital deployment into new and adjacent opportunities through merger and acquisition activity as well as returning capital to shareholders through buybacks and dividends.”
6. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 55
Forward Dividend Yield: 1.34%
Oracle Corporation (NYSE:ORCL) is another stock in the growth stock domain that features high on the dividend stock list of Ken Fisher, primarily because of the solid user base of the firm and the reputation of steady earnings growth it has developed over the years. Earlier this month, the company announced that it would be opening 14 cloud regions across the world to support demand for the Oracle Cloud in regions like the Middle East and Latin America.
Fisher Asset Management owned more than 14.8 million shares in Oracle Corporation (NYSE:ORCL) at the end of the second quarter of 2021 worth over $1.1 billion, representing 0.72% of the portfolio of the fund.
At the end of the second quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $2.8 billion in Oracle Corporation (NYSE:ORCL), up from 52 in the preceding quarter worth $2.8 billion.
The Home Depot, Inc. (NYSE:HD), Caterpillar Inc. (NYSE:CAT), and Walmart Inc. (NYSE:WMT) are some of the elite dividend stocks to buy now, just like Oracle Corporation (NYSE:ORCL).
Here is what Ariel Investments has to say about Oracle Corporation (NYSE:ORCL) in its Q1 2021 investor letter:
“A temporary factor might be a downturn in the high-yield bond market driving up LBO financing costs for the decline in 2021 GAAP revenue for Oracle Corporation (ORCL) due to a change in accounting methods. In all these examples, stock prices were driven well-below our calculations of intrinsic value. We invested in each company with good outcomes. Later, we will offer instances when this strategy is not successful.”
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Disclosure. None. Billionaire Ken Fisher’s Top 10 Dividend Stock Picks is originally published on Insider Monkey.
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