In this article, we discuss the 5 best dividend stocks to buy according to billionaire Cliff Asness. If you want to read our detailed analysis of Asness’ history and hedge fund performance, go directly to the 10 Best Dividend Stocks to Buy According to Billionaire Cliff Asness.
5. Cisco Systems, Inc. (NASDAQ: CSCO)
Asness’s Stake Value: $520,654,000
Percentage of Cliff Asness’s 13F Portfolio: 0.85%
Number of Hedge Fund Holders: 59
Dividend yield: 2.73%
Cisco Systems, Inc. (NASDAQ: CSCO) is a technology and communications equipment company that sells internet protocol-based networking and other products as part of the communications and information technology industry. The company operates in the US, Europe, the Middle East, Asia Pacific, Africa, Japan, and China. Cisco Systems, Inc. (NASDAQ: CSCO) ranks 5th on our list of the best dividend stocks to buy according to billionaire Cliff Asness.
On June 14th, Cisco Systems, Inc. (NASDAQ: CSCO) got a $1.18 billion contract for the brand name Cisco Smart Net Total Care and Software Support Services for users in the Department of Defense. The company’s new dividend of $0.37 per share is also recent, as it was announced in May and will be payable on July 28th. In its first-quarter 2021 report, Cisco Systems, Inc. (NASDAQ: CSCO) revealed its revenue to be $12.88 billion, significantly higher than the previous quarter’s $11.96 billion revenue. Its earnings for the first quarter were announced to stand at $2.86 billion. Cisco Systems, Inc. (NASDAQ: CSCO) also beat EPS estimates for the quarter by $0.01 with its $0.83 EPS. The company gained 21.13% in the past 6 months and 23.23% year to date and has a forward PE ratio of 16.86.
In the first quarter of 2021, 59 hedge funds held stakes in Cisco Systems, Inc. (NASDAQ: CSCO) worth over $5.19 billion. While the number of hedge fund holders has decreased by 1 between the fourth quarter of 2020 and the first quarter of 2021, the stake value has increased since in Q4’20 it was $4.97 billion. AQR Capital holds over 10 million shares in the company worth over $520 million.
Like PepsiCo, Inc. (NASDAQ: PEP), The Procter and Gamble Company (NYSE: PG), and Johnson and Johnson (NYSE: JNJ), Cisco Systems, Inc. (NASDAQ: CSCO) is a dividend stock worth investing in.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Cisco Systems, Inc. (NASDAQ: CSCO). Here is what ClearBridge Investments has to say about Cisco Systems, Inc. in its letter:
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
4. PepsiCo, Inc. (NASDAQ: PEP)
Asness’s Stake Value: $343,850,000
Percentage of Cliff Asness’ 13F Portfolio: 0.56%
Number of Hedge Fund Holders: 61
Dividend yield: 2.89%
PepsiCo, Inc. (NASDAQ: PEP) is a multinational food and beverage company with some of its most famous brands including Doritos, Cheetos, Lay’s, and Aunt Jemima. The company serves wholesale and other distributors, foodservice customers, grocery and drug stores, and a range of other consumers worldwide. PepsiCo, Inc. (NASDAQ: PEP) ranks 4th on our list of the best dividend stocks to buy according to billionaire Cliff Asness.
In the first quarter of this year, PepsiCo, Inc. (NASDAQ: PEP) raised its dividend by 5% to $1.075 per share, a rise from its previous $1.02 dividend. The new dividend will be payable on June 30th. In its first-quarter report, the company also reported its revenue to be $14.82 billion and earnings to be $1.71 billion. In the first quarter, PepsiCo, Inc. (NASDAQ: PEP) also again managed to beat EPS estimates by $0.09 with its $1.21 EPS. The stock also gained 2.62% in the past 6 months and 2.98% year to date and has a forward PE ratio of 24.43.
By the end of the first quarter of 2021, PepsiCo, Inc. (NASDAQ: PEP) had 61 hedge fund holders having stakes in the company worth over $4.88 billion, significantly up from Q420 numbers of 56 hedge fund holders with stakes worth $4.28 billion. AQR Capital is one such holder in PepsiCo, Inc. (NASDAQ: PEP) with over 2.4 million shares in the company worth over $343 million.
3. Newmont Corporation (NYSE: NEM)
Asness’s Stake Value: $293,056,000
Percentage of Cliff Asness’s 13F Portfolio: 0.47%
Number of Hedge Fund Holders: 43
Dividend yield: 3.15%
Newmont Corporation (NYSE: NEM) is a basic materials company working in the gold industry and produces and explores gold. It also explores copper, silver, zinc, and lead, and has operations and assets in several countries including the US and Canada. Newmont Corporation (NYSE: NEM) ranks 3rd on our list of the best dividend stocks to buy according to billionaire Cliff Asness.
Newmont Corporation (NYSE: NEM) had revenue of $2.87 billion for the first quarter of 2021, demonstrating an 11.2% growth year over year. Newmont Corporation (NYSE: NEM) also generated $841 million in cash from continuing operations and had a $442 million free cash flow in the first quarter, while also announcing a $0.55 dividend per share. Newmont Corporation (NYSE: NEM) also reported $559 million in earnings. In May, the company closed the acquisition of the remaining 85% of GT Gold Corp, a $325 million deal. Newmont Corporation (NYSE: NEM) gained 18.28% in the past 6 months and 10.58% year to date and has a forward PE ratio of 19.41.
In the first quarter of 2021, 43 hedge funds held stakes in Newmont Corporation (NYSE: NEM) worth over $994 million, down from that 50 hedge fund holders with stakes worth over $1.21 billion in Q420. AQR Capital holds over 4.9 million shares in the company worth over $293 million.
Like PepsiCo, Inc. (NASDAQ: PEP), The Procter and Gamble Company (NYSE: PG), and Johnson and Johnson (NYSE: JNJ), Newmont Corporation (NYSE: NEM) is a dividend stock worth investing in.
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.
“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.”
1. Verizon Communications Inc. (NYSE: VZ)
Asness’s Stake Value: $317,372,000
Percentage of Cliff Asness’s 13F Portfolio: 0.51%
Number of Hedge Fund Holders: 69
Dividend yield: 4.39%
Verizon Communications Inc. (NYSE: VZ) is a telecommunications services company offering communications, technology, information, and entertainment products and services. As of December 21, 2020, the company had almost 27 million wireless retail postpaid connections and 482,000 broadband connections. Verizon Communications Inc. (NYSE: VZ) ranks 1st on our list of the best dividend stocks to buy according to billionaire Cliff Asness.
Verizon Communications Inc. (NYSE: VZ) declared a $0.6275 per share quarterly dividend on June 2nd, which will be payable on August 2nd. The stock has also been upgraded to Buy by Tigress Financial, MoffettNathanson, and JP Morgan as of March 2021, December 2020, and November 2020, respectively. Verizon Communications Inc. (NYSE: VZ) revealed in its first-quarter report that its revenue stood at $32.87 billion while it had earnings of $5.25 billion, and it also beat EPS estimates for the quarter by $0.02. The stock has consistently beat EPS estimates for the past four quarters with its current EPS being $1.31. Verizon Communications Inc. (NYSE: VZ) also has a forward PE ratio of 11.23.
As of the end of the first quarter of 2021, 69 hedge funds held stakes in the company worth over $11.38 billion, up from the 67 hedge funds holding shares in the company worth $10.5 billion. AQR Capital holds approximately 5.5 million shares in Verizon Communications Inc. (NYSE: VZ) worth over $317 million.
You can also take a peek at 15 Best Long-Term Stocks To Buy Now and 10 Best Stocks To Buy For 2021.
