In this article, we reviewed 10 best dividend stocks for Roth IRA according to billionaire Ken Fisher’s $159 billion hedge fund. We picked these dividend stocks from Ken Fisher's Q1 portfolio. These stocks have a dividend yield of at least 4%. You can skip billionaire Ken Fisher's investment philosophy, and go directly to the 5 Best Dividend Stocks for Roth IRA.
Billionaire Ken Fisher believes investors can make decent gains by riding on the stunning tech and growth stocks bull run despite the fact that value stocks outshined growth stocks in the past two quarters. He says growth stocks will regain momentum, helping stock markets extend the last year's bull run. Fisher Asset Management founder has not only expressed his thoughts about 2021 bull run through his columns, but his portfolio management strategy also hints at the extension of bull run. He added to his high-growth tech, consumer discretionary, and communications stocks in the latest quarter.
However, his investing success that is spanning over two decades is backed by the strategy of maintaining a well-diversified stock portfolio. The founder of the $159 billion asset management firm seeks to hold stakes in all three forms of stocks: growth, value, and dividend. With $141 billion in 13F securities at the end of the first quarter, Ken Fisher held a position in 933 stocks and several of them have a high dividend-paying characteristic. Our focus in this article will be some of the best Roth IRA dividend stocks based on Fisher's portfolio. These stocks include Pfizer Inc. (NYSE: PFE), BP Plc. (NYSE: BP), BHP Group (NYSE: BBL), Chevron Corporation (NYSE: CVX) and Exxon Corporation (NYSE: XOM), among others.
As our readers are aware, for income investors we always recommend dividend stocks that have a strong history of dividend hikes. For example, Chevron Corporation (NYSE: CVX), one of the best dividend stocks in Fisher's portfolio, has increased its dividends consistently for the last 34 years. Chances of Chevron Corporation (NYSE: CVX) slashing or suspending its dividends in the future are quite low amid the reputation it has made over all these years.
Before moving on to billionaire Ken Fisher’s high dividend-yielding stocks, let's briefly review his stock portfolio and market outlook. In a YouTube video early this year, Fisher said that this year could turn out to be the last year of a ‘very long’ bull market.
He further elaborated his stance in his recent columns. He said tech stocks have led US stock markets to outperform the other global markets in the last ten decades. However, he believes forces backing the tech sector cannot stay forever, expecting sector leadership to rotate.
“Consider US sector returns for the 1990s, 2000s and 2010s. While Tech led all sectors in the 2010s and 1990s, it was the 2000s’ worst performer. (That wasn’t just the Tech bust, either. Its returns were lackluster in 2002 – 2007’s bull market.) Energy led in the 2000s. Before that, it was the 1990s’ third-worst performer. After, it was the 2010s’ worst. The biggest 1990s laggard, Utilities, roared to third-best in the 2000s. Using different start and end dates yields equally big shifts, giving no sector—hence no country—permanent superiority, regardless of its economic strength,” Ken Fisher said in his recent column.
Information technology stocks represented 26% of the overall Ken Fisher's portfolio weighting at the end of the first quarter, according to the latest filings. On the other hand, the billionaire Wall Street investor cut his financial sector positions and bought stakes in fast-growing sectors like communications and consumer discretionary.
10 Best Dividend Stocks for Roth IRA
Ken Fisher of Fisher Asset Management
While Ken Fisher’s reputation remains intact, the same can’t be said of the hedge fund industry as a whole, as its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let's start digging into the 10 best dividend stocks for Roth IRA. We used Fisher's 13F portfolio for the first quarter of 2021 for this analysis. These stocks are some of the best for retirement because of their dividends and share price gains.
Best Dividend Stocks for Roth IRA
10. Artisan Partners Asset Management Inc. (NYSE: APAM)
Number of Hedge Fund Holders: 21
Asset management firm Artisan Partners Asset Management Inc. (NYSE: APAM) is a member of billionaire Ken Fisher’s stock portfolio since 2015. At the end of the first quarter, the hedge fund held 1.49 million shares of Artisan Partners, accounting for 0.05% of the overall portfolio and valued at just over $78 million. Artisan Partners Asset Management Inc. (NYSE: APAM) offers a dividend yield of around 6.56%, with a quarterly dividend of $0.88 per share.
Artisan Partners Asset Management Inc. (NYSE: APAM) stock was in 21 hedge funds’ portfolios at the end of March, flat compared to the previous quarter.
The pharmaceutical giant Pfizer Inc. (NYSE: PFE) is the long-running stock holding of Fisher Asset Management. Pfizer Inc. (NYSE: PFE) held $90 million worth of stake in the pharmaceutical company. Pfizer Inc. (NYSE: PFE) offers a quarterly dividend of $0.39 per share, yielding above 4%. The company raised its dividends in the last ten successive years. In addition to dividend growth, its share price rallied close to 85% in the last ten years. Like BHP Group (NYSE: BBL) and Exxon Corporation (NYSE: XOM), Pfizer is one of the best dividend stocks for Roth IRA.
Pfizer Inc. (NYSE: PFE) stock was in 65 hedge funds’ portfolios at the end of March, compared to 63 hedge fund positions at the end of Q4.
Oil giant BP Plc. (NYSE: BP) is among the favorite dividend stocks of billionaire Ken Fisher. His hedge fund has been holding a position in BP since 2001. The firm raised its position in the oil company by 4% to 11.47 million shares at the end of the first quarter. BP Plc. (NYSE: BP) offers a dividend yield of 4.80%, with a quarterly dividend of $0.32 per share. In addition, its shares grew 28% since the beginning of this year, thanks to strong growth in oil prices. Like Pfizer Inc. (NYSE: PFE), BHP Group (NYSE: BBL), Chevron Corporation (NYSE: CVX) and Exxon Corporation (NYSE: XOM), BP is one of the best dividend stocks for Roth IRA.
BP Plc. (NYSE: BP) was in 29 hedge funds’ portfolios at the end of the first quarter of 2021, flat compared to the previous quarter. The all-time high for this statistic is 40.
Ken Fisher’s strategy of raising his stake in the mining company BHP Group (NYSE: BBL) worked in favor of his hedge fund. Fisher Asset Management held 7.1 million shares of BHP Group at the end of the first quarter, up 2% from the past quarter. BHP Group (NYSE: BBL) offers a semi-annual dividend of just over $2 a share, yielding around 6.65%. Moreover, its share price grew close to 12% year to date, extending the twelve-month gains to over 55%. Like Chevron Corporation (NYSE: CVX), Pfizer Inc. (NYSE: PFE), BP Plc. (NYSE: BP) and Exxon Corporation (NYSE: XOM), BBL is one of the best dividend stocks for Roth IRA.
BHP Group (NYSE: BBL) has experienced an increase in hedge fund sentiment recently. BHP Group was in 23 hedge funds’ portfolios at the end of the first quarter of 2021 compared to 18 positions in the previous quarter. The all-time high for this statistic is 24.
Ken Fisher is also bullish over the future fundamentals of Exxon Corporation (NYSE: XOM). This is reflected from his hedge funds strategy of lifting its stake in the oil giant by 3% to 8.05 million shares, accounting for 0.32% of the overall portfolio. Exxon Corporation (NYSE: XOM) offers one of the strongest dividends in the energy sector. The company currently offers a quarterly dividend of $0.87 per share, yielding close to 5.90%. Like Chevron Corporation (NYSE: CVX), Pfizer Inc. (NYSE: PFE), BP Plc. (NYSE: BP) and BHP Group (NYSE: BBL), XOM is one of the best dividend stocks for Roth IRA.
Harding Loevner, an investment management firm, mentioned a few stocks including Exxon Corporation in the first quarter investor letter. Here is what Harding Loevner stated:
“We felt that our remaining energy holding, Exxon Corporation (NYSE: XOM), with its stronger balance sheet, was in a better position to ride out the cyclical slump in oil demand and even perhaps take advantage of it by investing counter-cyclically. While ExxonMobil does plan to increase capital expenditure, we’ve been disappointed in its regrettable failure to address ongoing emission trends, which reflects poorly on management’s foresight. As a result, we sold our ExxonMobil holdings.”
