5 Best Dividend Stocks to Buy According to Cathie Wood

1. Novartis AG (NYSE: NVS)

Number of Hedge Fund Holders: 19 

Dividend Yield: 3.59%    

Novartis AG (NYSE: NVS) is a Switzerland-based company that markets health products. It was founded in 1996 and is ranked first on our list of 10 best dividend stocks to buy according to Cathie Wood. Novartis stock has returned more than 3.3% to investors over the past twelve months. ARK Investment holds more than 7.2 million shares in the healthcare firm worth over $618 million, representing more than 1.2% of their investment portfolio. Novartis markets biotechnology and pharmaceutical products. 

Back in February, Novartis AG (NYSE: NVS) stock was downgraded to Market Perform from Outperform by investment advisory Cowen with a revised price target of $105 from $110 on the back of new pressures to the latest drug offering from the biotech firm. 

At the end of the first quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in Novartis AG (NYSE: NVS), down from 23 the preceding quarter worth $1.6 billion.

In its Q4 2020 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Novartis AG (NYSE: NVS) was one of them. Here is what the fund said:

“Novartis is one of Europe’s largest pharmaceutical companies and possesses a highly diversified portfolio of innovative products. Its share price underperformed both the broader market and its pharma peers during 2020, largely due to a few disappointing late-stage trials and the company’s lack of Covid-19-related therapeutics or vaccines. These short-term issues provided us with an attractive entry point to invest in a leading pharmaceutical franchise with compelling economics. We estimate that the market is currently ascribing almost no value to Novartis’ pipeline despite the company’s excellent track record in new drug development. We expect that Novartis will deliver mid-single-digit, top-line growth and expand margins over the next five years as a result of its cost-savings plan. The company possesses one of the most diversified product portfolios in the pharma industry with 15 $1b+ compounds, which reduces its reliance on any single compound.”

You can also take a peek at Eagle Capital’s Top 10 Stock Picks and Billionaire David Siegel’s Top 10 Stock Picks.

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