3 Dividend Aristocrats Billionaires Continue to Buy In Bulk

It should be no surprise to many long-term investors that billionaire investors continue to focus on finding value in today’s volatile and uncertain environment. While growth stocks have outperformed their value counterparts in recent decades, it does appear to be the case that (at least in the U.S. markets), there’s a growing interest particularly among those investors who are looking to preserve their wealth as much as grow their portfolios over time to consider adding exposure to what many investors would consider value or dividend-oriented names.

Dividend aristocrats, or those companies that have raised their dividends for decades on end, are typically considered to be more stable options for investors with a long-term time horizon. That’s due mainly to the fact that in order for companies to pay out dividends to begin with, they ought to be cash flow positive (with earnings growth on the horizon), and have the balance sheet capacity to continue to increase their dividends over time.

Given that the following three dividend aristocrats have increased their dividend distributions for decades, these are companies I think retail investors would do well to follow billionaires into. 

Realty Income (O)

A leading real estate investment trust focused on retail real estate with rock-solid tenants, Realty Income (NYSE:O) has just recently been included in the S&P 500 Dividend Aristocrats listing. This REIT is perhaps best known by most investors for its focus on providing monthly dividends, which can be highly sought-after by those who require monthly income streams in retirement or as a way to fund their lifestyle.

Given the fund’s focus on recession-resistant sectors within the retail real estate world, I’d put Realty Income relatively high on the list of REITs I’d consider as long-term holdings. Recent reports from a number of 13-F filings have noted a number of top investing firms (hedge funds) and billionaires continue to pile into Realty Income, for a range of reasons that likely include this REIT’s focus on monthly distributions as well as its relatively defensive positioning. 

I’m of the view that Realty Income’s forward dividend prospects remain strong, given this company’s focus on a triple-net least structure. This structure ensures cash flow stability for its more than 15,000 properties spread across the country. In other words, no matter how tax, insurance or maintenance changes in specific markets, Realty Income is set to produce very stable and consistent earnings growth which will be passed onto investors of all sizes.

Procter & Gamble (PG)

Another top dividend aristocrat billionaires continue to pile into is Procter & Gamble (NYSE:PG). The consumer staples giant has an impressive track record of 68 years of consecutive dividend increases, making this one of the most stable and consistent payers on this front. As a global supplier of a number of the top household brands consumers buy on a weekly basis, the company passes what many call the “toothbrush test” – does a given company provide a product or service that will remain ongoing, or used frequently, over time?

Procter & Gamble’s status as a provider of these key staples insulates the company from volatility in the market, with consumers having little choice in whether or not to purchase such products (particularly in sectors where brand matters). P&G’s impressive brand portfolio has ensured stable market share in the U.S. and abroad, with consumers still opting for brand-name goods they can trust for their everyday purchases. 

It is worth noting that PG stock does provide a dividend yield of only 2.6%, which may not necessarily be enough to get some investors out of bed. However, the company’s dividend track record and its valuation do price in a defensive premium. I think this is a company that will likely retain this premium over the long-term, and is one I think retail investors would do well to consider as a single-stock option right now. 

Coca-Cola (KO)

Last, but certainly not least, let’s dive into one of the greatest brands of all time – Coca-Cola (NYSE:KO). Held by Warren Buffett for decades, and a key holding of a plethora of other billionaires due to the company’s market share and standing in the carbonated beverages and snack markets, Coca-Cola continues to be a top pick of mine for presumably the same reasons these billionaires continue to hold this dividend aristocrat. 

Coca-Cola’s highly diversified product portfolio which truly spans the entire globe positions the company well to benefit from what has historically been very reliable sector-wide growth in the key product segments the company operates in. The company’s recent year-over-year revenue growth of more than 6% and double-digit earnings growth are a testament to the company’s ability to grow even at scale. Over the long-term, assuming these growth trends remain in place, KO stock still looks favorably valued to me at a forward price-earnings ratio around 24-times. 

In other words, Coca-Cola’s status as a dividend aristocrat is really the icing on the cake for this name. For long-term investors, there are few better options in the market right now, in my view. 

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