We recently published a list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. Since Abbott Laboratories (NYSE:ABT) ranks 4th in the list, it deserves a deeper look.
Billionaire Paul Tudor Jones recently made headlines after he participated in the Robin Hood foundation’s fundraising event dressed as Neo from the movie “The Matrix.” The event raised $68.5 million. The billionaire, who founded Tudor Investment Corporation in 1980, couldn’t help himself but talk about investing during the event, and highlighted the importance of “Warren Buffett-style compounding.”
“Somewhere, somehow the multiplicative power of compound put you in this seat,” Tudor Jones said.
Paul Tudor Jones’ Recession Prediction
During an interview last year, the billionaire had predicted that a recession was expected to start in the first quarter of 2024. He said at the time that the US was in its “weakest position” since World War II. However, the market rally fueled by AI proved the prediction wrong. Earlier this year, Jones said in another interview that the financial markets represent people’s ideas and what they make of the economic situation. Paul Tudor Jones said that there’s a chance the stock market would be “here or lower” in the next five to ten years. However, the billionaire also said it’s possible that the markets would go higher from here if the next President of the US devises a better “policy response” next year.
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He’s been vocal about AI lately and sharing his thoughts about the impact of technology on our society. He thinks AI could be the “knight on the horse that rides and saves us.”
But AI-related threats worry Paul Tudor Jones. In an interview in January he referred to a survey where close to 3,000 AI experts were asked whether they believe AI would end humanity. According to Jones, a whopping 58% of the experts said yes. The billionaire said US policymakers will have to decide how to tackle this problem. Jones believes AI is growing at an “unbridled pace” since there’s so much money to be made in the domain but the biggest problem for policymakers would be to balance the benefits and threats of AI to make it sustainable.
For this article we scanned billionaire Paul Tudor Jones’ Q1 portfolio and chose his top dividend stock picks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Abbott Laboratories (NYSE:ABT)
Billionaire Paul Tudor Jones Q1’2024 Stake: $56,040,063
With 52 straight years of consistent dividend increases, Abbott Laboratories (NYSE:ABT) is one of the best dividend stocks to buy according to billionaire Paul Tudor Jones. Jones’ fund owns a $56 million stake in Abbott Laboratories (NYSE:ABT) as of the end of Q1.
Abbott Laboratories (NYSE:ABT) specializes in a wide range of products and services which reduces its dependency on any single market and helps it to generate revenue from multiple channels. Wall Street analysts are especially bullish on the company’s growth catalysts in the medical devices segment. The industry is expected to grow by 6.3% annually from $518.5 billion in 2023 revenue to reach $886.8 billion by 2032. During the first quarter, Abbott’s organic sales growth came in at 10.8% YoY, marking its fifth consecutive quarter of double-digit growth.
Abbott’s forward P/E ratio of 23.52 is a bit higher than the industry median of 19, but justified given Wall Street expectations of a 11.00% earnings growth in 2025. Average analyst estimate for ABT is $113.57, which presents a 16% upside potential from the current levels.
Polen Focus Growth Strategy stated the following regarding Abbott Laboratories (NYSE:ABT) in its first quarter 2024 investor letter:
“We increased our positions in ThermoFisher Scientific, Visa, Zoetis, Nike, and Abbott Laboratories (NYSE:ABT). Each of these companies is durable and available at attractive valuations, in our view, for the growth we see ahead. In fact, in the case of ThermoFisher, Nike, and Abbott Labs, we expect accelerating earnings growth in the back half of 2024 after more difficult earnings growth periods pass for each of these companies. ThermoFisher and Abbott will finally wind down most of their COVID-19 testing and vaccine-related efforts due to a lack of demand, so these should no longer be revenue growth headwinds.”
Overall, Abbott Laboratories (NYSE:ABT) ranks 4th in Insider Monkey’s list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. You can visit Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones to see other stock picks of Billionaire Paul Tudor Jones. While we acknowledge the potential of Abbott Laboratories (NYSE:ABT), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Abbott Laboratories (NYSE:ABT) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.