In this article, we discuss 10 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.
5. The Procter & Gamble Company (NYSE:PG)
AQR Capital’s Stake Value: $375,559,000
Percent of AQR Capital’s 13F Portfolio: 0.84%
Dividend Yield as of September 12: 2.59%
Number of Hedge Fund Holders: 71
The Procter & Gamble Company (NYSE:PG) is an American multinational consumer goods company that specializes in a wide range of personal care and hygiene products. The company is one of the oldest holdings of AQR Capital, as the hedge fund has been investing in it since 2010. In Q2 2022, the fund owned over 2.6 million PG shares, worth $375.5 million. The company represented 0.84% of billionaire Cliff Asness’ portfolio.
On July 12, The Procter & Gamble Company (NYSE:PG) declared a quarterly dividend of $0.9133 per share, with a dividend yield of 2.59%, as of September 12. The company holds one of the longest dividend growth track records in the market, raising its payouts for consecutive 66 years. In addition to this, it has been making uninterrupted dividend payments for the past 132 years.
Following the company recent quarterly earnings, Barclays reiterated its Overweight rating on The Procter & Gamble Company (NYSE:PG) in August, with a $154 price target. In the same month, Truist also maintained its Buy rating on the stock.
At the end of June 2022, 71 hedge funds tracked by Insider Monkey owned stakes in The Procter & Gamble Company (NYSE:PG), down from 72 in the previous quarter. The stakes owned by hedge funds hold a collective value of over $5.5 billion. With stakes worth over $970 million, Bridgewater Associates was the company’s leading stakeholder in Q2.
4. Gilead Sciences, Inc. (NASDAQ:GILD)
AQR Capital’s Stake Value: $375,562,000
Percent of AQR Capital’s 13F Portfolio: 0.84%
Dividend Yield as of September 12: 4.29%
Number of Hedge Fund Holders: 58
Gilead Sciences, Inc. (NASDAQ:GILD) is a California-based biotech company that mainly focuses on the research and development of medicines for serious illnesses. The company has been raising its dividends consistently for the past 6 years. It currently pays a quarterly dividend of $0.73 per share, with shares boasting a yield of 4.29%, as recorded on September 12.
During Q2 2022, AQR Capital purchased an additional stake in Gilead Sciences, Inc. (NASDAQ:GILD) worth over $214 million. The hedge fund’s total stake in the company stood at over $375.5 million, which represented 0.84% of its 13F portfolio. The fund started its position in the company during the fourth quarter of 2010, with shares worth $1.4 million.
In September, Mizuho lifted its price target on Gilead Sciences, Inc. (NASDAQ:GILD) to $75 with a Buy rating on the shares, as the company announced settlement agreements with different manufacturers.
According to Insider Monkey’s data for Q2 2022, 58 hedge funds owned stakes in Gilead Sciences, Inc. (NASDAQ:GILD), compared with 68 in the previous quarter. The collective value of stakes owned by these funds is roughly $4 billion. Jim Simons and Ken Griffin were some of the company’s prominent stakeholders in Q2.
ClearBridge Investments mentioned Gilead Sciences, Inc. (NASDAQ:GILD) in its Q4 2021 investor letter. Here is what the firm has to say:
“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”
3. Exxon Mobil Corporation (NYSE:XOM)
AQR Capital’s Stake Value: $377,631,000
Percent of AQR Capital’s 13F Portfolio: 0.85%
Dividend Yield as of September 12: 3.61%
Number of Hedge Fund Holders: 72
Exxon Mobil Corporation (NYSE:XOM) is next on our list of the best dividend stocks according to billionaire Cliff Asness. The company is one of the most popular energy corporations in the US and was founded in 1999 with the merger of Exxon and Mobil. Morgan Stanley lifted its price target on the stock to $113 in September and maintained an Overweight rating on the shares, holding a positive stance for companies that support low carbon growth.
Exxon Mobil Corporation (NYSE:XOM) has been a part of AQR Capital’s portfolio since the fourth quarter of 2010 when the hedge fund purchased stakes worth $120 million. During Q2 2022, the fund owned over 4.4 million XOM shares, after increasing its position by 52% in the company. Its total XOM stake stood at $377.6 million, representing 0.85% of billionaire Cliff Asness’ portfolio.
Exxon Mobil Corporation (NYSE:XOM) pays a quarterly dividend of $0.88 per share for a yield of 3.61%, as recorded on September 12. The company has sustained its annual dividend growth for 39 years in a row.
Of the 895 hedge funds tracked by Insider Monkey, 72 funds had investments in Exxon Mobil Corporation (NYSE:XOM) in Q2 2022, compared with 83 in the previous quarter. The total value of these investments came in at over $7.4 billion.
First Eagle Investments mentioned Exxon Mobil Corporation (NYSE:XOM) in its Q2 2022 investor letter. Here is what the firm has to say:
“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”
2. Pfizer Inc. (NYSE:PFE)
AQR Capital’s Stake Value: $553,911,000
Percent of AQR Capital’s 13F Portfolio: 1.25%
Dividend Yield as of September 12: 3.35%
Number of Hedge Fund Holders: 70
Pfizer Inc. (NYSE:PFE) is a New York-based multinational biotech and pharmaceutical company that develops medicines and vaccines for various diseases. The company was a part of 70 hedge fund portfolios in Q2 2022, down from 79 in the previous quarter. The stakes owned by these hedge funds hold a collective value of over $2.8 billion.
AQR Capital has been investing in Pfizer Inc. (NYSE:PFE) for over a decade now and never sold its entire stake in the company over these years. The hedge fund first invested $37.6 million in the company during the fourth quarter of 2010. At the end of Q2 2022, the fund owned over 10.5 million PFE shares, worth roughly $554 million. The company made up 1.25% of billionaire Cliff Asness’ portfolio.
In June, Pfizer Inc. (NYSE:PFE) declared a quarterly dividend of $0.23 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past 12 years and its free cash flow generation signals future growth as well. As of September 12, the stock has a yield of 3.35%.
ClearBridge Investments mentioned Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter. Here is what the firm had to say:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks. (Click here for the full text)
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
AQR Capital’s Stake Value: $557,382,000
Percent of AQR Capital’s 13F Portfolio: 1.25%
Dividend Yield as of September 12: 2.89%
Number of Hedge Fund Holders: 72
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwan-based semiconductor company that deals in the manufacturing and design of semiconductors and related products. The company was the fourth-largest holding of AQR Capital in Q2 2022. The hedge fund owned over 6.8 million shares in the company with a total value of over $557.3 million. The company represented 1.25% of billionaire Cliff Asness’ portfolio.
Though Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) does not hold any dividend growth track records, the company has raised its dividends at a CAGR of 10.83% in the past five years. It currently offers NT$2.75 per share in quarterly dividends, with a dividend yield of 2.89%, as of September 12.
In June, Loop Capital initiated its coverage of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) with a Buy rating and a NT$600 price target, calling the company an industry leader due to its long-term structural growth.
Given how difficult leading edge semiconductor manufacturing is, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is considered as one of the world’s most high tech companies. The company does face competition from Intel Corporation (NASDAQ:INTC) and Samsung, however, and any tension between Taiwan and China would be a headwind.
At the end of June 2022, 72 hedge funds tracked by Insider Monkey had over $9.2 billion invested in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). In the previous quarter, 83 hedge funds owned stakes in the semiconductor company, worth over $10.1 billion. With over $2.1 billion worth of TSM shares, Fisher Asset Management owned the largest position in the company in Q2.
Baron Funds mentioned Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2022 investor letter. Here is what the firm has to say:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted in the second quarter due to macroeconomic uncertainties and softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver strong revenue growth over the next several years.”
You can also take a look at 10 High Dividend Stocks to Shore Up Your Cash Position Before Recession Begins and 10 Dividend Stocks to Buy According to Steve Cohen’s Point72 Asset Management
Follow Insider Monkey on Twitter
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.
