5 Dividend Stocks to Buy According to Billionaire Ken Fisher

In this article, we will discuss the 5 dividend stocks to buy according to billionaire Ken Fisher. If you want to explore some of Ken Fisher’s top dividend stock picks, you can go to 12 Dividend Stocks to Buy According to Billionaire Ken Fisher.

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

Fisher Asset Management’s Stake Value: $1,351,347,000

Percentage of Fisher Asset Management’s 13F Portfolio: 0.91%

Dividend Yield as of February 6: 2.73%

On January 24, Merck & Co., Inc. (NYSE:MRK) declared a quarterly cash dividend of $0.73 per common share. The dividend is payable on April 10 to shareholders of record at the close of business on March 15. As of February 6, Merck & Co., Inc. (NYSE:MRK) is offering a forward dividend yield of 2.73% and has gained 17.56% over the past six months.

This February, Truist analyst Robyn Karnauskas raised his price target on Merck & Co., Inc. (NYSE:MRK) to $118 from $106 and reiterated a Buy rating on the shares.

At the end of Q4 2022, Fisher Asset Management held a stake worth $1.35 billion in Merck & Co., Inc. (NYSE:MRK). The investment covers 0.91% of Ken Fisher’s 13F portfolio and the stock is one of Fisher’s top dividend stocks to buy now.

Here is what Baron Funds had to say about Merck & Co., Inc. (NYSE:MRK) in its Q4 2022 investor letter:

“Merck & Co., Inc. (NYSE:MRK) is a large-cap pharmaceutical company with a deep heritage in drug discovery. Share gains were led by the continued growth of key asset Keytruda, the leading immune oncology agent used to treat a variety of cancers. Shares also benefited from increased investor interest as Merck proves its ability to scale its Gardasil vaccine that had previously been constrained by supply issues. We retain long-term conviction, as we expect Keytruda to solidify its position as the best-selling biopharmaceutical drug of all time.”

4. TotalEnergies SE (NYSE:TTE)

Fisher Asset Management’s Stake Value: $1,448,248,000

Percentage of Fisher Asset Management’s 13F Portfolio: 0.97%

Dividend Yield as of February 6: 4.86%

On January 19, JPMorgan analyst Christyan Malek raised his price target on TotalEnergies SE (NYSE:TTE) to EUR 73 from EUR 68 and maintained an Overweight rating on the shares.

In addition to offering a hefty dividend yield of 4.86%, as of February 6, TotalEnergies SE (NYSE:TTE) is also trading at a compelling valuation and has a trailing twelve-month PE ratio of 6.89. Moreover, the stock has gained 18.81% over the past six months, as of February 6. TotalEnergies SE (NYSE:TTE) is ranked among the best dividend stocks to buy according to billionaire Ken Fisher.

As of Q4 2022, Fisher Asset Management owns over 23.3 million shares of TotalEnergies SE (NYSE:TTE) which amounts to a stake of $1.44 billion. The investment makes up for 0.97% of Ken Fisher’s 13F portfolio.

Here is what Artisan Partners had to say about TotalEnergies SE (NYSE:TTE) in its Q3 2022 investor letter:

“We added one new position this quarter, TotalEnergies SE (NYSE:TTE). TTE is one of the world’s largest energy companies. It develops and produces oil and gas, produces and sells refined products, is one of the largest producers and traders of LNG, and owns a large portfolio of renewable power generating assets. TTE has one of the lowest cost portfolios of oil and gas assets and therefore one of the lowest breakeven points in the industry. It also has one of the best balance sheets in the industry. We estimate it will reach a net cash position sometime in 2023.

The valuation of TTE—and that of Shell—is fascinating. TTE sells at approximately 4X earnings and has a 5% dividend yield. With its current buyback program and a recently announced special dividend, the owners yield is more than 10%. The valuation and owners yield are not dissimilar to those of Shell, which we also own and which trades at just under 5X earnings. To say that a discount is attached to European oil companies relative to US peers is an understatement. ExxonMobil sells at 8X earnings, Chevron 9X and Conoco 8X. If TTE and Shell redomiciled to the US, their share prices would probably double.

We have a few theories for the valuation anomaly. First, as mentioned above, Europe generally trades at a big discount to the US. In the case of TTE and Shell, this makes no economic sense. The oil and gas business is a global one, and TTE and Shell have attractive assets. The main explanation, we believe, is that large sections of the European asset management industry will not invest in oil and gas because of ESG restrictions. Yet if the recent war in Ukraine and the current energy crisis have shown us nothing else, the supply of energy is an enormous social good. Indeed, it is an existential good. Moreover, it is companies such as TTE that will invest billions to supply the LNG that Europe desperately needs to restore its economy and reduce the crushing cost burden on families who must now choose between heating their homes and eating. Finally, TTE is also investing billions per year in renewable power generating assets such as wind and solar. Such assets will likely never replace clean burning natural gas and nuclear as base power suppliers, but they are a valuable and clean adjunct to modern grids. We believe TTE’s renewable portfolio is worth between $25 billion and $35 billion and is moving from almost no profit contribution toward meaningful levels of profit over the next few years. We wonder how it makes sense for investors to disinvest from these kinds of assets on ethical grounds.”

3. Morgan Stanley (NYSE:MS)

Fisher Asset Management’s Stake Value: $1,613,107,000

Percentage of Fisher Asset Management’s 13F Portfolio: 1.09%

Dividend Yield as of February 6: 3.12%

At the close of the fourth quarter of 2022, Ken Fisher’s hedge fund held a stake worth $1.61 billion in Morgan Stanley (NYSE:MS). The investment covers 1.09% of Fisher Asset Management’s 13F portfolio.

This January, Credit Suisse analyst Susan Roth Katzke updated his price target on Morgan Stanley (NYSE:MS) to $102 from $97 and maintained an Outperform rating on the shares.

On January 17, Morgan Stanley (NYSE:MS) declared a quarterly cash dividend of $0.775 per common share. The dividend is payable on February 15 to investors of record on January 31. As of February 6, the stock is offering a forward dividend yield of 3.12% and has returned 15% to investors over the past six months.

Here is what Madison Funds had to say about Morgan Stanley (NYSE:MS) in its Q3 2022 investor letter:

“This quarter we are highlighting Morgan Stanley (NYSE:MS) as a relative yield example in the Financial sector. MS is a leading investment bank and wealth management firm with approximately $5 trillion of client assets under management. It merged Citigroup’s Smith Barney business into its own wealth management business after the 2008 recession/financial crisis, which resulted in a more stable business model. Recent acquisitions of asset manager Eaton Vance and E-Trade provide additional stability and higher returns on capital. We believe MS has a sustainable competitive advantage due to its size and scale, global reach, strong reputation, and financial distribution capabilities. Importantly for a financial institution, it is in good financial health as key leverage ratios including common equity Tier 1 ratio, Tier 1 capital ratio, Tier 1 leverage ratio, and supplementary leverage ratio were all well above required minimums at the end of 2021.

Our thesis on MS is that its wealth management business will continue to become a larger part of the overall company, which will increase overall margins and return on equity (ROE). Wealth management and asset management are less cyclical than investment banking, and often generate higher margins and provide better stability of financial results. For example, the addition of Smith Barney added significant scale and boosted wealth management operating margins from below 10% into the mid-20%s over the past several years while also increasing returns on equity. Looking ahead, we believe the company will benefit from rising asset prices and higher interest rates, should they happen over time…read more

2. Goldman Sachs Group, Inc. (NYSE:GS)

Fisher Asset Management’s Stake Value: $1,682,710,000

Percentage of Fisher Asset Management’s 13F Portfolio: 1.13%

Dividend Yield as of February 6: 2.70%

On January 17, Goldman Sachs Group, Inc. (NYSE:GS) declared a quarterly dividend of $2.50 per common share. The dividend is payable on March 30 to stockholders of record at the close of business on March 2. As of February 6, Goldman Sachs Group, Inc. (NYSE:GS) is offering a forward dividend yield of 2.70% and is trading at a PE multiple of 12x.

On January 18, Wells Fargo analyst Mike Mayo revised his price target on Goldman Sachs Group, Inc. (NYSE:GS) to $390 from $400 and maintained an Overweight rating on the shares.

As of the end of Q4 2022, Fisher Asset Management owns 4.9 million shares of Goldman Sachs Group, Inc. (NYSE:GS). The fund’s stake in the company is valued at $1.68 billion and the stock is among Ken Fisher’s top holdings, making up 1.13% of his hedge fund’s portfolio.

Here is what Manole Capital Management had to say about The Goldman Sachs Group, Inc. (NYSE:GS) in its Q3 2022 investor letter:

“Back in 2019, The Goldman Sachs Group, Inc. (NYSE:GS) made a splash in the card industry by working with Apple and MasterCard on a credit card. The actual card is fairly sleek (as you can see below), as customers names are etched into an Apple titanium card. The no-fee card generated a lot of hype, as many early users were quick to post their latest card on various social media sites.

The initial goal of Marcus (back in 2016) was to leverage Goldman’s wonderful name brand and build a full-service digital bank. This card was a large piece of GS’s ambitions to grow its retail banking franchise called Marcus. After 5 years, Marcus now has 14 million customers and $16 billion in loan balances. Surprisingly, Marcus now represents nearly 20% of the firm’s total revenue.

We thought it would be interesting to look how the Apple Card is doing in terms of loans and exposures. With over $100 billion in assets, this has been a successful source of cheap deposits for GS. Despite having an institutional / “white shoe” brand in the investment banking and trading world, GS’s Apple Card has been a disappointment.” (Click here to read the full text)

1. The Home Depot, Inc. (NYSE:HD)

Fisher Asset Management’s Stake Value: $2,617,777,000

Percentage of Fisher Asset Management’s 13F Portfolio: 1.76%

Dividend Yield as of February 6: 2.32%

The Home Depot, Inc. (NYSE:HD) is among the top ten holdings of Ken Fisher’s Fisher Asset Management. As of December 31, 2022, the fund owns over 8.28 million shares of The Home Depot, Inc. (NYSE:HD), which amounts to a stake of $2.61 billion. The investment covers 1.76% of Ken Fisher’s 13F portfolio.

As of December 13, Cowen analyst Max Rakhlenko has a $379 price target and an Outperform rating on The Home Depot, Inc. (NYSE:HD).

The Home Depot, Inc. (NYSE:HD) is a cash behemoth. According to the company’s balance sheet, The Home Depot, Inc. (NYSE:HD) has free cash flows of $10.16 billion. The stock is one of Ken Fisher’s best dividend stocks to buy and, as of February 6, is offering a forward dividend yield of 2.32%.

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