Billionaire Ken Fisher Loves These 3 Under-the-Radar Dividend Stocks

Here's why these three underrated dividend stocks top Fisher's fund.

Apr 24, 2014 at 5:33PM

When it comes to dividend stocks, bigger isn't always better. Instead of focusing on yield alone, savvy investors find companies with the ability to both back and boost their dividends. Here are three under-the-radar dividend stocks at the top of Fisher's holdings.

Qualcomm (NASDAQ:QCOM) develops new technologies and then licenses the rights to use its patented technology. For example, networks being upgraded to 4G (fourth generation) are based on a technology developed by Qualcomm. By holding the patents, Qualcomm collects royalties from smartphone and tablet makers that use it. Also, as Android-based devices (commonly run on Qualcomm's Snapdragon chip) continue to snatch market share, Qualcomm will likely benefit. And China presents a major opportunity for the San Diego-based company as consumers upgrade to smartphones and China Mobile, the world's biggest carrier, rolls out its 4G network with technology that Qualcomm dominates.

Qualcomm's dividend yields 2.1%, but the real power in its dividend is its growth story. The tech company recently raised its payout by more than 20% and has increased it by 147% over the past five years. Better yet, the payout ratio for Qualcomm's dividend now stands at 33%, indicating that the company has plenty of room to further grow its dividend.

Comcast (NASDAQ:CMCSA) is the largest cable operator in the United States. The company acquired full ownership of NBC Universal last year. Comcast recently reported a very strong quarter, with NBC Universal driving both revenue and earnings. Watch for Comcast to deliver further improved operating margins at NBC Universal as it integrates operations going forward. In addition, owning content somewhat insulates Comcast from rising content costs. Also, Comcast's interconnection pact with Netflix could enhance both companies' content-distribution and marketing abilities.

The telecom behemoth's dividend yields 1.8% and has been increased by 233% in five years. Its 30% dividend payout ratio gives the company leeway to raise the payout, which is well-supported by strong cash flow and earnings. As Comcast's margins grow, the company will have even more room to increase its dividend.

Disney's (NYSE:DIS) massive empire, which includes a world-renowned brand, theme parks, television, and movies, gives the company a diversified stream of revenue. Its sometimes overlooked cable networks account for almost half of company revenues and two-thirds of operating profit. Disney's successful Lucasfilm, Marvel, and Pixar acquisitions are generating seemingly endless billion-dollar movie franchises and assets that will likely create shareholder value for years to come. And Disney's recent $1 billion investment in FastPass+ ride reservation technology will make it a smarter -- and likely even more profitable -- company in the future.

Disney's dividend yields a mere 1.1%, but its payout ratio is a healthy 24%, which leaves lots of room for further growth. The company increased its dividend 15% last year and nearly 146% over the past five years. Not only do your grandkids and Fisher love Disney, but our Motley Fool CAPS community crowns it a 5-star (out of 5) stock.

Foolish takeaway
Savvy investors like Fisher don't ignore companies with a lower initial dividend. By overlooking companies that pay smaller yields, you may be missing out on the best dividend growth stocks of the coming decade.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Nicole Seghetti owns shares of Comcast and Walt Disney. Follow her on Twitter @NicoleSeghetti. The Motley Fool recommends Netflix and Walt Disney. The Motley Fool owns shares of China Mobile, Netflix, Qualcomm, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers