Some stock-trading platforms enable their users to automatically replicate the positions taken by experienced investors or other famous figures. Many investors might prefer to do their own research before buying shares of a company, but it's still a good idea to pay attention to some of the moves more experienced names on Wall Street make.
Take Ken Griffin, a successful money manager and the billionaire CEO of Citadel Advisors, the hedge fund he founded. During the first quarter, Griffin and his team made several moves that investors, including those seeking reliable dividend payers, should seriously consider copying. The hedge fund added shares of Medtronic (MDT 0.33%) and AbbVie (ABBV 1.48%).
Here's why these two are top options for dividend seekers.
Image source: Getty Images.
1. Medtronic
Medtronic checks several of the boxes that dividend investors look to find. Let's consider three of them. First, the company develops and markets medical devices. As a leader in a defensive industry, Medtronic tends to perform better than most even in challenging conditions. The business is highly unlikely to go under, which means there is less risk of payout cuts. Medtronic's shares have performed slightly better than the S&P 500 this year -- despite significant volatility and fears of a recession -- while it continues to generate steady revenue and profits. That's precisely what income seekers want.
Second, Medtronic has several important growth avenues. The company is inching closer to approval in the U.S. for its Hugo device, a robotic-assisted surgery (RAS) system, in urologic procedures. That will mark the device's grand commercial entrance into the U.S. market. Medtronic should seek label expansions for it in the future. The RAS industry appears to be significantly underpenetrated. As Medtronic pointed out two years ago, less than 5% of procedures that could be performed robotically currently are. The company's Hugo system will unlock massive long-term growth opportunities and help it continue delivering consistent financial results just as it has been doing.
Third, Medtronic has an impeccable dividend track record, having grown its payouts for 48 consecutive years. Its 3.4% forward yield is above the S&P 500's average of 1.3%. Medtronic currently faces some challenges, including the threat of tariffs. It expects a net tariff hit of between $200 million and $350 million during its fiscal year 2026 (which just started). However, Medtronic is looking for ways to mitigate the impact of tariffs. For its fiscal 2026, it projected revenue growth of 5% year over year and adjusted earnings-per-share (EPS) growth of 1% at the midpoint, including the impact of tariffs.
These trade developments will harm the company in the short term, but Medtronic should find ways to minimize the negative impact in the long term if these tariffs remain in place for an extended period, which is by no means certain. In my view, even with that threat, Medtronic remains a top stock to buy and hold for the long term, especially for dividend seekers.
2. AbbVie
AbbVie's shares fell off a cliff in November after an otherwise promising pipeline program flopped in a phase 2 study. The drugmaker is no stranger to clinical setbacks. No pharmaceutical giant is. However, AbbVie's underlying business still looks incredibly solid. The company's revenue and earnings are growing at a good clip largely thanks to its two immunology superstars, Skyrizi and Rinvoq. Management expects these medicines to hit $31 billion in combined sales by 2027 (versus $17.7 billion last year).
However, AbbVie's greatest strength isn't its current lineup of immunology medicines. It's the company's ability to overcome clinical setbacks and major patent cliffs by successfully developing newer and better medicines. Skyrizi and Rinvoq helped AbbVie move beyond Humira, its former top-selling medicine, which lost U.S. patent exclusivity in January 2023.
Skyrizi and Rinvoq overlap with many of Humira's indications, sometimes with greater efficacy. AbbVie's deep pipeline should enable it to develop successors to its current crop of drugs even if it has to endure setbacks along the way. AbbVie's business is impressive and so is its dividend history. The company has increased its payouts for 53 consecutive years -- making it a Dividend King -- and currently offers a forward yield of 3.6%.
AbbVie is an outstanding dividend stock despite the issues it has encountered in the past two years.
