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Ken Griffin, who founded Citadel in 1990, is widely regarded as a leading figure among today’s hedge fund managers. Citadel is one of the largest and most successful hedge funds in the world. Griffin’s net worth of approximately $38 billion places him at number 42 on the list of the world’s richest individuals.
Although Griffin doesn’t rely on income from his stock holdings, he significantly increased his investments in three dividend stocks in the first quarter of 2024.
Hess Corp. (NYSE:HES)
At the end of 2023, Citadel didn’t have Hess’s best stock. However, Griffin increased Citadel’s stake in Hess nearly 18 times, making it the hedge fund’s third-largest position. Hess has a dividend yield of less than 1.2%, but the company has increased its dividends by 75% since 2022.
Griffin’s decision to buy more shares of Hess contradicts sentiment on Wall Street. LSEG surveyed 21 analysts in May and 11 recommended keeping the company, while one analyst 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 the stock price for Hess owners.
Bank of America Corp (NYSE:BAC)
As far as Citadel’s banking stock investments go, Bank of America is a top pick. Griffin acquired more than 22.4 million shares in the first quarter, an increase of 389% compared to the previous quarter. Bank of America is known for its robust dividend program. Over the past five years, the dividend has grown by 60% and the current dividend yield is over 2.4%.
The stock has recovered since the 2023 banking disaster, but remains about 20% below its early 2022 peak. Still, Bank of America’s value is surpassing its current status. 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)
Of the pharmaceutical stocks in Citadel’s portfolio, Merck emerges as a standout performer. It rose by almost 20% in the first quarter, becoming the eighth largest holding company. Since 2011, Merck has increased its dividend every year, growing 40% over the past five years, resulting in a forward dividend yield of almost 2.4%.
In 2024, Merck shares performed well, up 20%. The company has secured new approvals for its best-selling drug, Keytruda, in the US and Europe. In addition, it also reported positive results from a late-stage pneumococcal conjugate vaccine V116 trial. In March, Merck completed its acquisition of Harpoon Therapeutics.
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This article Ken Griffin Buys These Dividend Stocks: Hess And 2 More originally appeared on Benzinga.com
