Money manager Ken Fisher runs Fisher Asset Management, a multi-billion dollar fund. Billionaires like Fisher, and other savvy investors, know that dividends are a great way to receive healthy doses of income, especially in today's low interest-rate environment. Four of the Fisher Asset Management funds' top 20 individual stock holdings pay a 3% dividend yield or greater, including HSBC Holdings (HSBC 0.21%), Pfizer (PFE 0.55%), General Electric (GE 0.68%), and Procter & Gamble (PG -0.78%).
Let's take a closer look at each of these top dividend stocks.
Fisher's top dividend-paying stock is HSBC Holdings, which currently rewards shareholders with a 3.6% dividend yield. Even though HSBC was fined nearly $2 billion for money laundering late last year, the company leverages its well-known brand in operations spanning more than 80 countries. The company's global network enables it to draw clients with cross-border banking needs. Many of HSBC's operations are in emerging markets, offering the company growth potential as the trend toward globalization of the financial markets continues.
After making a number of acquisitions during the past several years, Pfizer has become a very large organization. Many of its acquisitions benefited Pfizer, but several also came with divisions that were unrelated to its core pharmaceutical business. As a result, Pfizer has refocused on its core business by selling or spinning off some non-pharma divisions, most recently, animal health company Zoetis. Many investors feel this strategy will allow Pfizer's robust drug pipeline to have a greater impact on company growth and profitability. The drugmaker pays shareholders a 3.3% dividend yield.
Like Pfizer, General Electric is also in the process of revamping operations, most recently by trimming GE Capital, its financial services business. The division is still a significant portion of operating earnings, and the company's transformation to more of an industrial focus will take time. Over the long-term, General Electric's industrial business will likely benefit from emerging market growth, even given the company's recent challenges in key markets like wind and solar. GE pays shareholders a 3.2% dividend yield.
Shake-ups have also been noteworthy at Procter & Gamble. Yet, despite recent management changes, the company continually delivers innovation that consumers have come to expect. The household goods giant boasts 25 brands, each bringing in more than $1 billion in annual sales. Its Tide brand, including Tide Pods, has been deemed a Pacesetter industry benchmark new product award every year since 2005. Although criticized for being late to enter emerging nations, P&G's presence in faster-growing international markets continues to increase, with roughly 40% of sales now coming from developing markets.
Foolish bottom line
With a 3% dividend yield, P&G pays shareholders the least of Fisher's top four dividend-paying stocks. However, Procter & Gamble has grown its dividend by more than 9% on average annually during the past five years. Meanwhile, HSBC, Pfizer, and GE have actually shrunk their dividends on average each year in the same period, proving that stocks that pay high dividend yields aren't necessarily those growing their yields, too.
