Pfizer Inc. (PFE) & Johnson & Johnson (JNJ) In Billionaire David Shaw’s Top Dividend Picks

D.E. Shaw added shares of McDonald’s Corporation (NYSE:MCD) last quarter, closing June with 2.2 million shares in its portfolio. The market leading quick service restaurant is a common defensive pick, featuring a beta of 0.2 and an annual yield of 3.2%. With challenges from peers offering more premium products, growth has been limited recently (revenue and earnings were up less than 4% each in the second quarter of 2013 versus a year earlier) yet with markets generally optimistic among QSRs the trailing and forward P/Es are 17 and 16 respectively. While it offers little exposure to the overall economy, this combination of valuation and growth doesn’t seem too appealing.

The 13F revealed a stake of 7.4 million shares in Vodafone Group Plc (ADR) (NASDAQ:VOD), which some analysts have speculated may sell its minority stake in Verizon Wireless to Verizon. While the company’s dividend payments tend to fluctuate in dollar terms, they have generally been on the rise for the past few years. If we use dividend payments over the last twelve months and the current stock price, we get an annual yield of 5.2%, competitive with many other large telecoms. However, many bears believe that Vodafone Group Plc (ADR) (NASDAQ:VOD)’s non-VZW assets are poorly managed and merit a discount to the company’s peers in the absence of a Verizon deal.

Disclosure: I own no shares of any stocks mentioned in this article.