Billionaire Ken Fisher’s Favorite Dividend Stocks

Apple Inc. (NASDAQ:AAPL) represents Fisher’s third-largest holding, with the fund owning 11.21 million shares worth $1.90 billion as of the end of 2017. During the fourth quarter, the fund boosted its stake in the company by 2%. In addition being a leading tech company with tens of billions in quarterly sales, Apple Inc. (NASDAQ:AAPL) is also appreciated by value investors for its focus on increasing shareholder value through dividends and stock buybacks. The company is currently expected to repatriate its cash hoard of $285 billion and it is highly likely that a big portion of those funds will go to shareholders through higher dividends and more stock buybacks. Apple Inc. (NASDAQ:AAPL)’s dividend yield of 1.50% is not particularly high, but investors should not forget that the company’s dividend is very safe as it generates lots of free cash flow every year and in the last couple of years, Apple Inc. (NASDAQ:AAPL) has raised its dividend by around 10% per year on average. Combine this with the popular opinion on the Street that Apple Inc. (NASDAQ:AAPL) is undervalued, trading at 17.30 times earnings (vs the S&P 500 average of 24), and you get a great stock that should be added to an income portfolio. Aside from Fisher, there are 106 other funds that we track at Insider Monkey that are long Apple Inc. (NASDAQ:AAPL) and they hold in aggregate $41.26 billion worth of stock as of the end of 2017.

In Johnson & Johnson (NYSE:JNJ), Fisher Asset Management inched up its position by 2% to 12.13 million shares worth $1.69 billion during the last three months of 2017. Johnson & Johnson (NYSE:JNJ), whose stock has a dividend yield of 2.70%, is the only healthcare stock among dividend kings, a group of 25 S&P 500 components that have been increasing their dividend consecutively for at least 50 years. As the world’s largest and most diverse drug manufacturer, Johnson & Johnson (NYSE:JNJ) has a broad portfolio of products and should enjoy solid growth in years to come. Lately, the company has been focusing on divestitures and sale of some businesses that are not part of its core portfolio. Last year, the company sold its Codman Neurosurgery unit to Integra Lifesciences, and its Cilag GmbH and Janssen Pharmaceutica businesses sold a portfolio of European over-the-counter products to Trimb Healthcare AB. Last month, Johnson & Johnson (NYSE:JNJ) received an offer for its LifeScan glucose monitoring business from private equity firm Platinum Equity. If the $2.1 billion binding offer is accepted (the deadline is June 15) then the deal should be completed by the end of the year. Overall, among the funds in our database, 74 investors disclosed holding shares of Johnson & Johnson (NYSE:JNJ) as of the end of 2017, down by one over the quarter.

Then there is Microsoft Corporation (NASDAQ:MSFT), which ranks on the ninth spot in Fisher’s equity portfolio, with the fund holding 16.95 million shares (up by 3% on the quarter) worth $1.45 billion. While Microsoft Corporation (NASDAQ:MSFT)’s dividend yield of 1.80% is not the highest among well-established tech giants, investors can be certain that the company’s dividend is secure, since Microsoft Corporation (NASDAQ:MSFT) is a veritable cash cow as its Windows and Office products remain very popular on the PC market, while its Azure cloud business is gaining steam and is one of the market leaders alongside Amazon.com, Inc. (NASDAQ:AMZN)’s AWS. Microsoft Corporation (NASDAQ:MSFT) has also been growing its dividend over the past decade, so investors can get a positive picture regarding the future of the company and its dividend payments. In addition, Microsoft Corporation (NASDAQ:MSFT) is one of the most popular stocks among the hedge funds we track, with 142 investors bullish on the company at the end of 2017, compared to 137 funds a quarter earlier.

Fisher Asset Management also disclosed a $1.35 billion position in Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM), which contains 33.99 million shares. Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) is the largest dedicated chip foundry in the world, with a market share of over 50% and its stock sports a dividend yield of 2.73%. The company has been consistently increasing its annual dividend over the past several years from less than $0.10 per share in 2005 to $1.15 per share last year. One of the company’s top clients is Apple Inc. (NASDAQ:AAPL), for which Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) will reportedly produce smaller MicroLED panels that could be for a future Apple Watch model and for an “AR wearable device”. Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) saw 33 funds long the stock heading into 2018, up by five funds over the quarter.

In Pfizer Inc. (NYSE:PFE), Fisher Asset Management increased its position by 1.25 million shares during the fourth quarter and reported ownership of 36.37 million shares valued at $1.32 billion in its last 13F filing. Pfizer Inc. (NYSE:PFE) is one of the largest pharmaceutical companies in the world, whose stock has a dividend yield of 2.92%. Pfizer Inc. (NYSE:PFE) has lately been exploring strategic alternatives for its consumer products unit, Pfizer Consumer Healthcare, and CNBC has reported earlier this month that Procter & Gamble is in talks with Pfizer Inc. (NYSE:PFE) regarding a potential acquisition of the business or a joint venture deal. Moreover, Pfizer Inc. (NYSE:PFE) is expected to make a big acquisition this year in order to boost its growth, although Barclays analysts have recently downgraded the stock to ‘Neutral’ and cut the price target to $38 citing a lower probability that the company will pursue a major acquisition. At the end of 2017, there were 73 funds in our database that held shares of Pfizer Inc. (NYSE:PFE).

Disclosure: none