Billionaire Ken Fisher’s Top Dividend Stocks

Here's why these three high-dividend-paying stocks top Ken Fisher's fund.

Apr 24, 2014 at 4:44PM

Savvy investors like multibillion-dollar fund manager Ken Fisher know that dividends are a great way to obtain healthy doses of income. In today's low-interest-rate environment, these stocks are more important for income investors than ever. Here are three of his top dividend stocks.

HSBC Holdings (NYSE:HSBC) leverages its well-known brand in banking operations spanning more than 80 countries. Its global network enables the U.K.-based company to attract clients with cross-border banking needs. Many of HSBC's operations are in emerging markets, which offer the company growth potential as the trend toward globalization of the financial markets continues. HSBC has decided to focus its investment banking on a few select mature markets and emerging markets with growing populations and wealth, rather than trying to be a large player in all countries. HSBC's recent focus on the mass affluent market through its Premier brand should drive growth, as these customers generate significantly more revenue than the average account-holder. Unlike many of its banking peers, HSBC has paid a solid dividend during the past several years. Its stock currently yields 7.3%, and HSBC has raised its dividend by nearly 140% over the past five years.

General Electric (NYSE:GE) is in the process of revamping operations and getting back to its core business, most recently by trimming GE Capital, its financial-services business. Although GE's transformation to more of a focus on its industrial roots will take time, many benefits await. For example, when GE sells a new engine, it can also benefit by providing maintenance over the life of the equipment. Services and maintenance carry profit margins higher than those of new equipment, and GE's services now account for more than 30% of company revenue. During the most recent quarter, profit from the industrial businesses rose 12% on robust results in the aviation, oil and gas, and power and water divisions, which collectively bring in about 44% of company revenue. A key driver of growth and profit has been strength in emerging markets, such as China and India, which will likely continue as those countries build out infrastructure to handle an increasingly urbanized society. The conglomerate, which announced a 16% dividend increase last year, currently pays shareholders a 3.3% dividend yield.

McDonald's (NYSE:MCD) has undergone a refresh by placing renewed emphasis on brand imaging, launching premium products, offering healthier menu options, and remodeling restaurants. But none of those efforts helped the company side-step declining same-store sales. McDonald's posted negative same-store sales in late 2012, its first negative figure reported in nearly a decade. The fast-food king has since suffered even more sales declines. Slowing global economic growth has partly been to blame, as nearly 70% of company revenue is derived internationally. Yet McDonald's is a master of innovation and experimentation, and opportunities for long-term growth still exist internationally, especially in emerging markets like China. The Golden Arches will add roughly 300 new stores there this year, given the impressive growth potential in the market and the chain's improving brand position there. The company is also overhauling a number of its existing China-based locations, launching a new advertising campaign, and recruiting locals to operate its franchises in China. The typical Chinese consumer's increasing affluence, boosted by higher education and greater personal income, presents upside for the burger maker. McDonald's has raised its dividend every year since it paid its first one in 1976. The company raised its dividend by 5% last year and currently forks over a 3.2% dividend yield to shareholders.

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Nicole Seghetti owns shares of General Electric Company. Follow her on Twitter @NicoleSeghetti. The Motley Fool recommends McDonald's. The Motley Fool owns shares of General Electric Company and McDonald's. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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