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Ken Griffin, founder of Citadel in 1990, is widely considered a towering figure among contemporary hedge fund managers. Citadel stands as one of the largest and most successful hedge funds in the world. His net worth of approximately $38 billion places him 42nd on the list of the world’s richest individuals.
Although Griffin is not dependent on income from his equity holdings, he significantly increased his investments in three dividend stocks during the first quarter of 2024.
(NYSE:HE)
As of late 2023, Citadel has none of Hess’s best shares. However, Griffin increased Citadel’s stake in Hess nearly 18-fold, making it the hedge fund’s third-largest position. Hess has a forward dividend yield of less than 1.2%, but the company has increased its dividends by 75% since 2022.
Griffin’s decision to buy more Hess stock contradicts Wall Street sentiment. LSEG interviewed 21 analysts in May and 11 recommended holding the company, while one predicted it would “underperform”. Griffin may be banking on positive results from Chevron’s planned purchase of Hess, which could lead to a 13% increase in its stock price for Hess’ owners.
Bank of America Corp (NYSE:TAS)
Regarding Citadel bank stock investments, Bank of America is the best choice. Griffin acquired more than 22.4 million shares in the first quarter, marking a 389% increase from the previous quarter. Bank of America is known for its robust dividend program. Over the past five years, the dividend has grown 60% and the current future dividend yield is over 2.4%.
The stock has recovered since the banking disaster in 2023, but remains approximately 20% below its early 2022 peak. Despite this, Bank of America’s value exceeds its current position. Its forward price-to-earnings ratio is 12.2, lower than the S&P 500 banking sector average of 15.6.
Merck & Co Inc (NYSE:MRK)
Among the pharmaceutical stocks in Citadel’s portfolio, Merck emerges as a standout performer. It rose nearly 20% in the first quarter to become the eighth largest holding. Since 2011, Merck has increased its dividend every year, with growth of 40% over the past five years, resulting in a future dividend yield of almost 2.4%.
In 2024, Merck shares performed well, rising 20%. The company has secured new approvals for its best-selling drug, Keytruda, in the US and Europe. Additionally, it also reported positive results from a late-stage study of the V116 pneumococcal conjugate vaccine. In March, Merck completed its acquisition of Harpoon Therapeutics.
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This article Ken Griffin Is Snapping Up These Dividend Stocks: Hess & 2 More originally appeared in Benzinga.com
