In this article, we discuss 10 dividend stocks to buy according to billionaire Cliff Asness. You can skip our detailed analysis of AQR Capital’s performance and its investment strategy, go directly and read 5 Dividend Stocks to Buy According to Billionaire Cliff Asness.
Cliff Asness is a founder of Applied Quantitative Research, or AQR Capital Management, which follows a quantitative investment approach. The hedge fund is one of the very first quantitative funds in the US that specializes in factor-based investing. The fund’s main aim is to build highly diversified investment portfolios while managing risks. Currently, Asness is serving as a Chief Investment Officer and Managing Principal of AQR Capital. According to Forbes, the billionaire’s real-time net worth is $1.4 billion, as of September.
Asness follows value investing and believes that a diversified portfolio of cheap US stocks can generate better returns. Considering the current market environment, he presented a bullish stance on value stocks as they are significantly cheaper than growth equities and are outperforming this year. Following these strategies, his hedge fund has generated solid returns in the past, gaining 16.8% in 2021. In the first five months of 2022, the fund surged 35%, as reported by Bloomberg. Through April this year, the firm’s 11 strategies delivered positive returns to shareholders, compared with negative returns of the broader index. AQR Capital’s equity market value global strategy delivered an 11.2% return in April 2022 and gained 35% in the first four months of this year, according to a report by Institutional Investor.
At the end of Q2 2022, AQR Capital’s 13F portfolio had a value of over $44.2 billion, compared with $52.6 billion in the previous quarter. The hedge fund invested in several sectors during the quarter, with technology, healthcare, and finance sectors dominating the portfolio. Dividend stocks also made up a significant portion of the billionaire’s portfolio. Some of the most prominent stocks in this regard are Pfizer Inc. (NYSE:PFE), Exxon Mobil Corporation (NYSE:XOM), and The Procter & Gamble Company (NYSE:PG). In this article, we will focus on some more dividend stocks to buy according to billionaire Cliff Asness.
Given the current volatility in the market, stocks could go lower if economic data doesn’t meet expectations. With inflation higher than expected, the Federal Reserve is also expected to raise interest rates again by as much as 0.75 percentage points during its next meeting. With higher rates, dividend stocks are less attractive. Nevertheless, there’s opportunity in the market for long term investors, especially for high quality stocks given the current low valuations.
Cliff Asness of AQR Capital Management
Our Methodology:
We took the top 10 stocks that had dividend yields of over 2.5% as of September 12 of Q2 2022 of Billionaire Cliff Asness’ AQR Capital Management’s 13F portfolio. We ranked them by stake value from #10 to #1. We also included the number of hedge funds in our database that also held shares in the same stock as of the end of Q2 2022.
10 Dividend Stocks to Buy According to Billionaire Cliff Asness
10. Intel Corporation (NASDAQ:INTC)
AQR Capital’s Stake Value: $269,072,000
Percent of AQR Capital’s 13F Portfolio: 0.6%
Dividend Yield as of September 12: 4.63%
Number of Hedge Fund Holders: 65
Intel Corporation (NASDAQ:INTC) is a California-based multinational corporation and technology company that specializes in the manufacturing of semiconductors. During Q2 2022, AQR Capital boosted its stake in the company by 34%, purchasing additional nearly 2 million shares. The fund’s total stake in the company amounted to roughly $270 million, which represented 0.6% of its 13F portfolio.
Intel Corporation (NASDAQ:INTC) has been making uninterrupted dividend payments for the past 28 years and has raised its payouts consistently for 7 years. It currently pays a quarterly dividend of $0.365 per share, with a dividend yield of 4.63%, as recorded on September 12.
In August, Northland lifted its price target on Intel Corporation (NASDAQ:INTC) to $55 with an Outperform rating on the shares, appreciating the company’s dividend yield and business momentum.
At the end of Q2 2022, 65 hedge funds tracked by Insider Monkey owned stakes in Intel Corporation (NASDAQ:INTC), down from 76 in the previous quarter. These stakes hold a collective value of over $2.5 billion. Generation Investment Management was the company’s leading stakeholder in Q2, owning shares worth $552.5 million.
Baron Funds mentioned Intel Corporation (NASDAQ:INTC) in its Q2 2022 investor letter. Here is what the firm has to say:
“Then, there is the case of Intel Corporation (NASDAQ:INTC). A blue-chip tech champion with a market capitalization of over $500 billion in early 2000, the stock was trading at a P/E multiple of 42. It was a fast-growing company whose stock price and multiple declined more or less in line with its peers. However, unlike Google, Intel’s net income has grown from $7.3 billion in 1999 to $19.9 billion in 2021, a compounded annual growth rate of just 4.7%. Its growth from the dot com era has not proven to be durable, and Intel has yet to trade at the price it attained in 1999.”
Alongside Exxon Mobil Corporation (NYSE:XOM), Pfizer Inc. (NYSE:PFE), and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Intel Corporation (NASDAQ:INTC) is a dividend stock held by billionaire Cliff Asness’ AQR Capital at the end of Q2 2022.
9. Cisco Systems, Inc. (NASDAQ:CSCO)
AQR Capital’s Stake Value: $291,729,000
Percent of AQR Capital’s 13F Portfolio: 0.65%
Dividend Yield as of September 12: 3.28%
Number of Hedge Fund Holders: 63
Cisco Systems, Inc. (NASDAQ:CSCO) is an American multinational telecommunications company that manufactures and sells networking hardware, software, and other technological products. On August 23, the company declared a quarterly dividend of $0.38 per share, with shares yielding 3.28%. It has been raising its dividends consistently for the past 11 years, coming through as one of the most prominent dividend stocks to buy according to billionaire Cliff Asness.
AQR Capital has been investing in Cisco Systems, Inc. (NASDAQ:CSCO) since the fourth quarter of 2010 when the hedge fund bought stakes worth $22.7 million. In Q2 2022, the hedge fund owned roughly 7 million CSCO shares, worth $291.7 million. The fund increased its position in the company by 17%. The tech company represented 0.65% of billionaire Cliff Asness’ portfolio.
In August, Cowen raised its price target on Cisco Systems, Inc. (NASDAQ:CSCO) to $60 with an Outperform rating on the shares, appreciating the company’s solid quarterly earnings.
As of the end of June 2022, 63 hedge funds tracked by Insider Monkey reported owning stakes in Cisco Systems, Inc. (NASDAQ:CSCO), compared with 66 in the previous quarter. These stakes hold a consolidated value of nearly $2 billion.
Carillon Tower Advisers mentioned Cisco Systems, Inc. (NASDAQ:CSCO) in its Q1 2022 investor letter. Here is what the firm has to say:
“Cisco Systems (NASDAQ:CSCO) traded lower as investors weighed how supply chain concerns would impact sales growth. The company has been upgrading its switching and routing offerings, which should lead to strong demand as on-site locations upgrade infrastructure.”
8. PepsiCo, Inc. (NASDAQ:PEP)
AQR Capital’s Stake Value: $340,783,000
Percent of AQR Capital’s 13F Portfolio: 0.77%
Dividend Yield as of September 12: 2.65%
Number of Hedge Fund Holders: 65
PepsiCo, Inc. (NASDAQ:PEP) is a multinational food, snack, and beverage company that manufactures and distributes its products. In August, Morgan Stanley reiterated its Overweight rating on the stock, as the firm sees clear topline upside in the company and the stock’s continued outperformance.
AQR Capital first invested $28.5 million in PepsiCo, Inc. (NASDAQ:PEP) during the fourth quarter of 2010 and gradually increased its position in the company over the years. During Q2 2022, the hedge fund raised its position in the company by 6%, which takes its total stake to over $340.7 million. The company represented 0.77% of the firm’s 13F portfolio.
In 2022, PepsiCo, Inc. (NASDAQ:PEP) extended its dividend growth streak to 50 years, which makes it one of the best dividend stocks in billionaire Cliff Asness’ portfolio. The company currently offers $1.15 per share in quarterly dividends. As of September 12, the stock’s dividend yield came in at 2.65%.
Fundsmith LLP owned roughly $2 billion worth of stakes in PepsiCo, Inc. (NASDAQ:PEP), becoming the company’s leading stakeholder in Q2 2022. Overall, 65 hedge funds tracked by Insider Monkey owned stakes in the company in Q2, growing from 62 in the previous quarter. These stakes hold a combined value of over $5.2 billion.
ClearBridge Investments mentioned PepsiCo, Inc. (NASDAQ:PEP) in its Q2 2022 investor letter. Here is what the firm had to say:
“Also in the stable and predictable cash flow camp, though with a very different business model, global food and beverage company PepsiCo (NYSE:PEP) reported very strong organic growth in the first quarter, driven by healthy price/mix, and raised revenue guidance, while holding EPS guidance. Notably, its beverage business showed expanding margins.”
7. Johnson & Johnson (NYSE:JNJ)
AQR Capital’s Stake Value: $369,844,000
Percent of AQR Capital’s 13F Portfolio: 0.83%
Dividend Yield as of September 12: 2.73%
Number of Hedge Fund Holders: 83
Johnson & Johnson (NYSE:JNJ) is one of the most prominent Big Pharma companies. According to Insider Monkey’s Q2 data, 83 hedge funds held investments in the company, the same as in the previous quarter. These investments amounted to over $6.7 billion. Among these hedge funds, Rajiv Jain, Ray Dalio, and Ken Fisher were some of the most prominent stakeholders of the pharmaceutical company in Q2 2022.
In Q2 2022, AQR Capital owned over 2 million shares in Johnson & Johnson (NYSE:JNJ), valued at roughly $370 million. The company made up 0.83% of billionaire Cliff Asness’ portfolio.
In July, SVB Securities maintained its Outperform rating on Johnson & Johnson (NYSE:JNJ) as the underlying demand for its key products remained strong and the management is focusing on controlling costs.
Johnson & Johnson (NYSE:JNJ) pays a quarterly dividend of $1.13 per share, with a dividend yield of 2.73%, as recorded on September 12. The company maintains one of the longest dividend growth streaks in the US market, growing its dividends consistently for the past 60 years.
Mayar Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2022 investor letter. Here is what the firm has to say:
“J&J is currently our largest position and a long-standing holding. The majority of the group’s sales comes from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.
Here’s how JNJ make and spend a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopaedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics.
To make that dollar, however, JNJ typically spends about 25 cents to make the products themselves and another 27 cents on marketing and general administrative functions. This leaves JNJ with about 48 cents on the dollar in profit…”
6. Merck & Co., Inc. (NYSE:MRK)
AQR Capital’s Stake Value: $375,203,000
Percent of AQR Capital’s 13F Portfolio: 0.84%
Dividend Yield as of September 12: 3.13%
Number of Hedge Fund Holders: 79
Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based multinational pharmaceutical company that delivers innovative health solutions to its consumers. During Q2 2022, AQR Capital owned over 4.1 million shares in the company after raising its position by 15%. The fund’s total stake in the company stood at over $375.2 million, which represented 0.84% of its 13F portfolio. Other important dividend stocks in the firm’s portfolio are Pfizer Inc. (NYSE:PFE), Exxon Mobil Corporation (NYSE:XOM), and The Procter & Gamble Company (NYSE:PG).
In August, Erste Group upgraded Merck & Co., Inc. (NYSE:MRK) to ‘Buy’, mentioning that the company’s profits are well above the sector’s average and are expected to grow further in the future.
Merck & Co., Inc. (NYSE:MRK) is one of the best dividend stocks in billionaire Cliff Asness’ portfolio as the company maintains an 11-year streak of consistent dividend growth. It currently pays a quarterly dividend of $0.69 per share and has a yield of 3.13%, as of September 12.
As per Insider Monkey’s Q2 2022 database, 79 hedge funds owned stakes in Merck & Co., Inc. (NYSE:MRK), compared with 84 in the previous quarter. These stakes hold a consolidated value of over $6.1 billion, up from $5.8 billion worth of stakes owned by hedge funds in the previous quarter.
Smead Capital Management mentioned Merck & Co., Inc. (NYSE:MRK) in its Q2 2022 investor letter. Here is what the firm had to say:
“For the quarter, our best-performing stocks included Merck & Co., Inc. (NYSE:MRK). Despite a steep sell-off in June in the oil and gas stocks, two of our oil stocks made the quarterly list. Merck’s defensive characteristics and good news on earnings/growth didn’t shock us. We argued one year ago that Merck was historically cheap relative to the indexes as compared to the last 20 years.”
Like Merck & Co., Inc. (NYSE:MRK), Exxon Mobil Corporation (NYSE:XOM), Pfizer Inc. (NYSE:PFE), and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) are dividend stocks held by billionaire Cliff Asness’ AQR Capital in Q2 2022.
Click to continue reading and see 5 Dividend Stocks to Buy According to Billionaire Cliff Asness.
Suggested articles:
- Warren Buffett’s 10 Favorite Dividend Stocks for the Rest of 2022
- 9 Dividend Stocks to Buy According to Jacob Mitchell’s Antipodes Partners
- 10 Dividend Stocks to Buy According to Billionaire Louis Bacon
Disclosure. None. 10 Dividend Stocks to Buy According to Billionaire Cliff Asness is originally published on Insider Monkey.
