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In this article, we’ll take a look at the top 10 dividend-paying stocks of billionaire Cliff Asness. If you want to see more dividend-paying stocks from billionaire Cliff Asness, head straight to Billionaire Cliff Asness’ Top 5 Dividend Stocks.
Billionaire Cliff Asness is the founder of AQR Capital Management, one of the largest hedge funds in the world. In 1998, Asness, along with several of his Goldman Sachs colleagues, founded AQR Capital Management after managing $7 billion for Goldman Sachs Asset Management’s quantitative research group which achieved substantial success.
At AQR Capital Management, which stands for “Applied Quantitative Research Capital Management,” Asness and his colleagues have done similar things by taking substantial market data, processing it, and applying it to the markets. Given AQR Capital Management’s track record since inception, the fund now has a 13F portfolio worth over $41 billion as of the end of September.
Although the fund had a tough time from 2018 to 2020, the fund had a strong 2021. Looking to 2022, some of AQR’s most famous funds are up this year in April 2022.
2022 has been challenging given high inflation and central bank tightening. Given the rise in interest rates, yields on US Treasuries have risen significantly, and as a result many dividend-paying stocks are no longer as attractive to some investors as they once were.
Nevertheless, the October inflation data shows that inflation could peak. If inflation has peaked, interest rates may not rise much further and high-quality, blue-chip dividend-paying stocks could potentially be attractive over the long term given lower valuations.
Given the uncertainty, it might make sense for long-term investors to hold a diversified portfolio of stocks across many different sectors.
Cliff Asness of AQR Capital Management
Methodology
For our list of top 10 dividend-paying stocks from billionaire Cliff Asness, we’ve taken 10 stocks of Cliff Asness’ top AQR Capital Management holdings in his 13F portfolio at the end of Q3 2022 that were paying dividends and ranked them based on AQR Capital Management’s ownership interest in the stocks.
Billionaire Cliff Asness’s Top 10 Dividend Stocks
10. Johnson & Johnson (NYSE:JNJ)
Value of AQR Capital Management’s stake as of 09/30: $326,259,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.79%
Dividend yield on 17/11: 2.61%
Johnson & Johnson Inc (NYSE:JNJ) is a healthcare giant whose shares have risen 1.4% year-to-date. Because the company is well managed and has substantial pricing power, Johnson & Johnson (NYSE: JNJ) has been increasing its annual dividend for over 60 years. Despite the strong dollar and high inflation, the company’s recent results have been strong. For the third quarter, Johnson & Johnson (NYSE:JNJ) reported adjusted earnings of $2.55 per share on sales of $23.8 billion versus estimates of $2.48 on revenue of 23.4 billions of dollars. AQR Capital Management has a stake of more than $326 million in the giant as of the end of September.
Alongside Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), Johnson & Johnson (NYSE:JNJ) is a dividend-paying stock owned by billionaire Cliff Asness ‘AQR Capital Gestion at the end of Q3 2022.
9. Cisco Systems, Inc. (NASDAQ: CSCO)
Value of AQR Capital Management’s stake as of 09/30: $335,677,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.81%
Dividend yield on 17/11: 3.42%
Although shares are down 26.2% year-to-date, shares of Cisco Systems, Inc. (NASDAQ:CSCO) are up 11.5% in the past month on the back of the broader rally of the market. Shares of the computer network products maker also have a dividend yield of 3.42% as of 11/17. With a potential spike in inflation, it is hoped that interest rates will not rise as much as expected. If interest rates don’t rise as much, the valuations of big tech companies like Cisco Systems, Inc. (NASDAQ: CSCO) could benefit. AQR Capital Management owns more than $335 million in Cisco Systems, Inc. (NASDAQ: CSCO) at the end of the third quarter.
8. Merck & Co., Inc. (NYSE: MRK)
Value of AQR Capital Management’s stake as of 09/30: $338,191,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.82%
Dividend yield on 17/11: 2.76%
Merck & Co., Inc. (NYSE: MRK) has been one of the best performing large-cap stocks in 2022 with shares up 33% year-to-date. Additionally, Merck & Co., Inc. (NYSE: MRK) is also a dividend stock given its 2.76% yield as of 11/17. With a stake of over $338 million at the end of September 30, AQR Capital Management’s 13F portfolio likely benefited from Merck & Co., Inc.’s (NYSE:MRK) recent rise of $86.12. on September 30 at $102.31 on 11/17. One of the reasons for the rally could be higher expected earnings. According to Barron’s, analysts expect Merck & Co., Inc. (NYSE: MRK) to earn an average EPS of $7.37 for 2022, $7.53 for 2023 and $8.69 for 2024.
7. Gilead Sciences, Inc. (NASDAQ: GILD)
Value of AQR Capital Management’s stake as of 09/30: $340,112,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.82%
Dividend yield on 17/11: 3.52%
Like its counterpart Merck & Co., Inc. (NYSE: MRK), shares of Gilead Sciences, Inc. (NASDAQ: GILD) have performed well in 2022 with shares up 15.2% since the start of the year. With AQR Capital Management holding more than $340 million of Gilead Sciences, Inc. (NASDAQ:GILD) at the end of September 30, the fund likely benefited from the stock’s rise from $61.69 at the end of September to 83 $.62 as of November 17. In November, Argus’ Jasper Hellweg raised his price target from $70 to $100 and maintained a “Buy” rating on Gilead Sciences, Inc. (NASDAQ: GILD) citing pipeline and regulatory progress. As of 11/17, shares of Gilead Sciences, Inc. (NASDAQ: GILD) have a dividend yield of 3.52%.
6. CVS Health Corporation (NYSE:CVS)
Value of AQR Capital Management’s stake as of 09/30: $365,686,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.89%
Dividend yield on 17/11: 2.29%
CVS Health Corporation (NYSE:CVS) is a dividend stock given its 2.29% yield as of 11/17. As of September 30, AQR Capital Management was a significant holder of the shares with a stake value of over $365 million. For FY22, the company forecasts an Adjusted EPS guidance range of $8.55 to $8.65 and full year 2022 operating cash flow of $13.5 billion to $14.5 billion.
The Vltava Fund commented on CVS Health Corporation (NYSE:CVS) in a third quarter 2022 letter to investors,
“CVS is a leader in providing healthcare services in the United States. It has three main activities: a huge network of pharmacies, a health insurance company and “prescription benefit management”, which is a kind of intermediary between insurance companies and pharmacies. This is the result of significant acquisitions over the past 15 years – including Caremark (2007) and Aetna (2018). Markets deemed its acquisition of health insurer Aetna too expensive (and we agree), so CVS stock fell out of favor for a few years. We took advantage of this in the summer of 2020 and introduced the stock to our portfolio at a time when its price was further depressed by the coronavirus pandemic. CVS is a giant. Its turnover amounts to 300 billion dollars, which makes it one of the largest companies in the world. It is a relatively stable and highly profitable business with high free cash flow. Over the past few years, CVS has focused primarily on debt reduction. That’s already much lower than it was after the Aetna acquisition, and most of the money is now likely to go to shareholders through share buybacks or be used for smaller acquisitions to further expand the business. CVS trades at around 11 times annual earnings, which is a very attractive valuation given the expected future growth in profitability and the overall modest cyclicality of its business.
Along with CVS Health Corporation (NYSE:CVS), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) are among the billionaire’s top dividend-paying stocks Cliff Asness of AQR Capital Management. at the end of the third quarter of 2022.
Click to read on and see billionaire Cliff Asness’ top 5 dividend stocks.
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Disclosure: none. Billionaire Cliff Asness’s Top 10 Dividend Stocks is originally published on Insider Monkey.
