We recently published a list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. Since Cardinal Health Inc (NYSE:CAH) ranks 2nd 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).
Cardinal Health Inc (NYSE:CAH)
Billionaire Paul Tudor Jones Q1’2024 Stake: $59,463,101
Cardinal Health Inc (NYSE:CAH) has increased its dividends for 37 consecutive years. Billionaire Tudor Jones upped his hold in the company by 165% in the first quarter, ending the period with a $59 million stake in Cardinal Health Inc (NYSE:CAH). Last month Cardinal Health Inc (NYSE:CAH) posted fiscal Q3 results. Adjusted EPS in the quarter came in at $2.08, beating estimates by $0.13. Revenue in the period jumped 8.7% year over year to $54.9 billion, missing estimates by $1.21 billion. Overall, analysts have given a positive outlook for the healthcare sector this year, attributing this to ongoing transformations driven by advancements in AI and evolving patient requirements. In its most recent quarter, the company achieved widespread growth, showing significant profit increases in both its Pharmaceutical and Specialty Solutions segments, building on an already strong performance from the previous year. CAH ranks second on our list of the best dividend stocks to buy according to Paul Tudor Jones.
Cardinal Health management talked about guidance during the latest earnings call in May:
“With another solid quarter from Pharmaceutical and Specialty Solutions, we are raising and narrowing our segment profit guidance for the full year to 8.5% to 9.5% growth, which at the midpoint implies continued mid-single digit profit growth in the fourth quarter. We are reiterating our guide for GMPD segment profit of approximately $65 million for fiscal year ’24. We continue to expect to address the impact of inflation as we exit fiscal ’24, along with continued Cardinal Health brand volume growth and benefits from our continued cost savings initiatives. Additionally, we anticipate a positive impact from seasonality in Q4 compared to Q3. We are also reiterating our segment profit guide for the Other businesses, 6% to 8% segment profit growth for the full year, given that we expect a strong Q4 for those businesses.”
Cardinal Health’s forward P/E 13.07, much lower than the industry median of 19.57. Over the next five years the company’s earnings are expected to rise by 11.03% on a per-annum basis.
Overall, Cardinal Health Inc (NYSE:CAH) ranks 2nd 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 Cardinal Health Inc (NYSE:CAH), 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 Cardinal Health Inc (NYSE:CAH) 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.
