Aditi Ganguly
·4 min read
U.S. equities are off to a shaky start in 2024, as concerns regarding delayed rate cuts and a global economic slowdown have been weighing on investors. With stronger-than-expected retail sales reported in December, traders give the chances that the Federal Reserve will reduce interest rates by March a 47% chance.
Nonetheless, billionaires have been piling onto dividend-paying stocks to boost their total portfolio income. Investing in stable, high-yield dividend stocks can allow investors to generate passive income without taking on too many risks. In addition, such blue-chip dividend-paying companies typically have significant cash reserves, allowing them to remain resilient in the event of a recession.
Below are some of the most popular dividend-paying stocks billionaires have bought recently.
AT&T Inc.
AT&T Inc. (NYSE:T), one of the largest telecom companies in the U.S., has been a top pick among billionaires. Ken Griffin, founder and CEO of hedge fund Citadel, holds 21.25 million shares of AT&T in his portfolio as of Sept. 30, accounting for 0.35% of Citadel's total portfolio. Griffin bought nearly 13.72 million shares of AT&T in the last reported quarter.
Ray Dalio, the founder and former co-chief investment officer of hedge fund Bridgewater Associates, holds 1.61 million shares of AT&T valued at $26.8 billion as of Sept. 30.
AT&T currently pays $1.11 in dividends annually, yielding 6.66% on the current stock price. AT&T was a Dividend Aristocrat stock as of 2020, having raised its annual dividend payouts for 35 consecutive years. However, the company's recent spinoff of its WarnerMedia business segment caused it to be dropped from the highly coveted dividend aristocrat list.
The company maintains strong cash flows and reserves, which could drive dividend payouts in the future. AT&T's free cash flow balance stood at $5.2 billion as of Sept. 30, while cash from operating activities increased by 2.4% year over year to $10.3 billion in the third quarter.
Oppenheimer & Co. Inc. has an Outperform rating on AT&T stock, with a price target of $21, indicating a potential upside of nearly 26%. Wells Fargo also has an Overweight rating on the company, with a price target of $20, indicating a potential upside of nearly 20%.
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Walgreens Boots Alliance Inc.
Walgreens Boots Alliance Inc. (NASDAQ:WBA), the second-largest pharmacy chain store in the U.S., slashed its quarterly dividends by 48% in a shocking move earlier this month. Before this, the company raised its annual dividend payouts for 47 consecutive years, making it one of the most popular Dividend Aristocrats.
Walgreens stock has plummeted by over 15% so far this year. However, its dominant market position and robust cash flow could make it a value pick. The company currently pays $1 in dividends annually, yielding 4.55% on the current price.
"We are evaluating all strategic options to drive sustainable long-term shareholder value, focusing on swift actions to right-size costs and increase cash flow, with a balanced approach to capital allocation priorities," Walgreens CEO Tim Wentworth in the company's latest earnings report.
Paul Tudor Jones, founder and chief investment officer of hedge fund Tudor Investment Corp., bought over 613,000 shares of Walgreens in the third quarter, bringing his investment in the company to $22.2 million.
Israel Englander, founder of Millennium Management with over $61 billion in assets under management, bought over 1.4 million shares of Walgreens in the third quarter.
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This article The High-Yield Dividend Stocks Creating Fortunes For The Elite originally appeared on Benzinga.com
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