5 Best Dividend Stocks to Buy According to Billionaire Cliff Asness

2. Merck & Co., Inc. (NYSE: MRK)

Asness’s Stake Value: $495,118,000
Percentage of Cliff Asness’s 13F Portfolio: 0.8%
Number of Hedge Fund Holders: 79
Dividend yield: 3.45%

Merck & Co., Inc. (NYSE: MRK) is a multinational healthcare company operating through its pharmaceuticals and animal health segments. The company collaborates with AstraZeneca PLC, Bayer AG, Eisai Co., Ltd., and Ridgeback Biotherapeutics. Merck & Co., Inc. (NYSE: MRK) ranks 2nd on our list of the best dividend stocks to buy according to billionaire Cliff Asness.

On June 9th, the company secured a $1.21 billion US Army contract for treatment courses of an oral antiviral. They will be providing 1,696,629 courses of the oral antiviral MK-4482. According to Merck & Co., Inc.’s (NYSE: MRK) first-quarter report, their revenue for the quarter was $12.08 billion while earnings valued at $3.18 billion. Merck & Co., Inc. (NYSE: MRK) also had an EPS of $1.4. The company has a forward PE ratio of 12.5.

In the first quarter of 2021, 79 hedge funds held stakes in the company worth over $6.49 billion, down from the 82 hedge fund holders with stakes worth over $7.17 billion in Q420. AQR Capital has over 6.45 million shares in Merck & Co., Inc. (NYSE: MRK) worth $495 million.

Artisan Partners, in its Q1 2021 investor letter, mentioned Merck & Co., Inc. (NYSE: MRK). Here is what Artisan Partners has to say about Merck & Co., Inc. in its letter:
“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future
partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”