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Five Dividend Kings to Buy Based on Billionaire Investors’ Sentiment

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Dividend investing offers an opportunity to benefit from a steady inflow of payments that allow investors to diversify their portfolio, while waiting for a stock to appreciate over time. In addition, buying shares of companies that pay dividends usually signals a solid financial position of a company. However, among hundreds of companies that pay dividends a special place is deserved for the so-called “dividend aristocrats” and “dividend kings” which represent companies that have been paying an increased dividend for at least 20 and 50 years, respectively. Dividend kings represent a very small and elite group of companies that over decades showed the ability to adapt to a changing environment and survive even the toughest economic conditions, which often wipes out its peers. Even though there are just 17 dividend kings, one of the ways to identify the best bets in the list is to look at the smart money investors are bullish on them. And among almost 800 hedge funds and other institutional investors that we follow at Insider Monkey as part of our small-cap strategy (read more details here), an elite group includes around 50 funds that are managed or were founded by billionaires. We have earlier discussed five dividend aristocrats that billionaires in our database are bullish on (read article), so now let’s turn our attention to five dividend kings that ranked as the most popular among these investors, based on the last round of 13F filings.

On the fifth spot we have Colgate-Palmolive Company (NYSE:CL), in which seven billionaires hold positions as of the end of 2015, down by one over the quarter. At the same time, among our whole database of investors, 32 funds own shares of the company, but the billionaires hold the largest amount of shares, worth $1.06 billion out of $1.78 billion that the funds we follow have amassed in aggregate. The largest position in Colgate-Palmolive Company (NYSE:CL) among the funds we track is held by billionaire Jim Simons’ Renaissance Technologies, which reported 10.06 million shares worth $670.39 million in its last 13F filing. Other billionaires’ funds bullish on Colgate-Palmolive include Jacob Rothschild’s RIT Capital Management, David Shaw’s D. E. Shaw & Co. and David Harding’s Winton Capital Management.

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Colgate-Palmolive Company (NYSE:CL)’s stock has gained almost 150% over the last decade and currently sports a yield of 2.20%, based on the $0.39 dividend the company pays quarterly. Earlier this year, Colgate-Palmolive raised the dividend by 3% and, overall, the company has paid dividends since 1895, which is pretty impressive. However, Colgate-Palmolive, similar to many of its peers in the consumer sector, has been hit by a stronger dollar and to counteract currency headwinds, the company has recently announced plans to cut between 3,300 and 3,800 employees throughout 2017. Nevertheless, the company’s restructuring plan launched back in 2012, will still be appealing to investors as it includes “expanding commercial hubs”, “extending shared business services and streamlining global functions” and “optimizing global supply chain and facilities”, as the company said in a filing with the Securities and Exchange Commission.

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