Are These 2 High-Yield Dividend Stocks Billionaires Are Snapping Up Worth Buying in July?

Should You Follow Billionaires and Invest in Pfizer and Annaly Capital?

Key Points

1.Regulatory Reporting: In the U.S., managers of large investment portfolios must report their trades to regulators every quarter.

2.Billionaire Investments: In the first quarter of 2024, Pfizer and Annaly Capital saw investments from several billionaire investors.

3.High Yields: Pfizer offers a 6% yield, while Annaly Capital offers a yield more than double that of Pfizer’s.

Learn from Billionaire Investors

If you’re not managing billions but still want to boost your passive income, keeping an eye on the trading activities of top investors can be beneficial. Every quarter, portfolio managers handling $100 million or more disclose their trades to the Securities and Exchange Commission (SEC). Recent disclosures reveal that billionaire investors have been buying shares in two high-yield dividend stocks: Pfizer (PFE) and Annaly Capital (NLY). Both stocks offer yields significantly higher than the average stock in the S&P 500.

Annaly Capital Management

Annaly Capital is a real estate investment trust (REIT) that focuses on mortgage-backed securities (MBS) rather than physical real estate. It profits from the spread between short-term borrowing costs and the interest earned from its MBS holdings. Recently, Annaly’s shares have offered an impressive 13.6% yield, attracting investments from billionaire-run funds like Citadel Advisors (Ken Griffin) and Millennium Management (Israel Englander).

However, it's important to note that Annaly's dividend has been reduced by 45.8% since 2019. Additionally, the REIT's need to use its MBS portfolio as collateral for loans means it can face liquidity issues if the value of its MBS drops, forcing it to sell assets at reduced prices. Despite these risks, long-term investors might still see gains, but the volatility and dividend uncertainty make it less ideal for those seeking stable income.

Pfizer Inc.

In the first quarter of 2024, John Overdeck and David Siegel of Two Sigma purchased 18.9 million shares of Pfizer. The stock has declined by more than 50% since its peak in late 2021, largely due to a faster-than-expected drop in sales of COVID-19 products. Despite this, Pfizer raised its dividend for the 15th consecutive year last December, now offering a 6.2% yield.

Pfizer’s current stock price reflects about 11.6 times its forward-looking earnings, a reasonable valuation given its expected growth rate. Excluding COVID-19-related sales and currency impacts, Pfizer's first-quarter sales rose 11% year-over-year. The company has a robust pipeline of innovative drugs, with nine new FDA approvals in 2023 poised to drive future growth. For income-seeking investors, adding Pfizer to a diversified portfolio could be a relatively safe way to enhance passive income.

Seize This Opportunity

If you’ve ever felt like you missed out on the biggest stock opportunities, now is the time to pay attention. Occasionally, expert analysts issue “Double Down” recommendations for stocks they believe are about to see significant gains. Here are some examples:

- Nvidia: A $1,000 investment in 2009 would be worth $320,292 today.

- Apple: A $1,000 investment in 2008 would be worth $39,798 today.

- Netflix: A $1,000 investment in 2004 would be worth $363,957 today.

Currently, there are “Double Down” alerts for three exceptional companies. If you missed out on the rise of industry giants like Apple and Microsoft, now could be your chance to invest in the next big opportunity in artificial intelligence and technology.

Conclusion

Following the lead of billionaire investors can provide valuable insights, especially when it comes to high-yield dividend stocks like Pfizer and Annaly Capital. While Annaly Capital offers a higher yield, its dividend reliability is less certain. On the other hand, Pfizer presents a solid investment with a strong pipeline of new drugs and consistent dividend growth. For those looking to enhance their passive income, both stocks are worth considering as part of a diversified investment strategy. Don’t miss this chance to potentially capitalize on lucrative market opportunities.