Billionaire Ken Fisher's Top Dividend Stocks

Warren Buffett's right-hand man and business partner, Charlie Munger, offers this advice for successful investing: "Carefully look at what other great investors have done." Luckily for us, great investors are required to divulge changes they make to their portfolios on a quarterly basis. These SEC 13-F filings allow us to peek into the stock comings-and-goings of money pros, including multibillion-dollar hedge fund manager Ken Fisher.

Fisher's top dividend holdings include Royal Bank of Canada (NYSE: RY  ) , Philip Morris (NYSE: PM  ) , General Electric (NYSE: GE  ) , Pfizer (NYSE: PFE  ) , and McDonald's (NYSE: MCD  ) . All five stocks pay between a 3% and 4% dividend yield, but how they've grown their dividends differs greatly. Royal Bank of Canada and McDonald's have increased their respective dividends more than 5% and 15% annually over the past five years. Meanwhile, Pfizer and GE have both cut their dividends by 8% and 13%, respectively, each year during this same time.  

Philip Morris is undergoing a huge share buyback program, signaling that the company thinks its stock is undervalued. The company possesses solid long-term international growth prospects, specifically the potential to tap into fast-growing emerging markets. Over the long term, GE will also probably benefit from emerging-market growth, but it'll be a tough climb given the company's recent challenges, namely competition in key markets such as wind turbines. 

Another of Fisher's top dividend picks is Royal Bank of Canada. Canadian banks are more heavily regulated than U.S. banks, and as a result, the country boasts a relatively sound banking system. Royal Bank of Canada's stock price is up nearly 22% over the past year. Pfizer stock is also up roughly 22% in the past 12 months. Pfizer has spent a great deal of money on share buybacks and has refocused on its core pharma business by selling or spinning off some non-pharma divisions. Many investors think this strategy will allow the company's drug pipeline to have a greater impact on Pfizer's growth. 

McDonald's posted negative same-store sales late last year, its first negative figure reported in almost a decade. Slowing global economic growth was to blame, as 70% of company revenues are derived internationally. But a strengthening global economy -- coupled with McDonald's renewed emphasis on brand imaging -- shows potential.

Foolish bottom line
Cloning a billionaire hedge fund manager's portfolio isn't wise. But learning lessons from successful investors is. If you're interested in dividends and like what you see in these stocks, do some research before you dive in. We have plenty of Foolish resources to help you do just that.

For GE, the recent financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE, and you'll receive continuing updates as major events unfold during the year. To get started, click here now.


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  • Report this Comment On January 25, 2013, at 9:37 AM, Erbjl wrote:

    As a vetran investor in GE stock, I find these statements about the stock and company extreemly misleading and uninformed. Sure, GE had a great debacle in 2008 when its divident was cut by almost 70% and its stock price droped similarly. However, such statements completely ignore the 90% rise in dividend over the last 3 1/2 years and the nearly 300% increase in stock price over that same period. (Hopefully this will become apparent to the casual observer next year when the 5 year numbers will not be burdened down with the disasterous 2008 numbers!)

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