Billionaire Ray Dalio's Former Hedge Fund Is Buying These 3 Top Dividend Stocks. Should You?

Core Insights - Bridgewater Associates, led by Ray Dalio, has recently invested in three major dividend stocks: ExxonMobil, Medtronic, and Microsoft, indicating a strategic focus on quality dividend-paying companies [1] ExxonMobil - ExxonMobil offers a dividend yield of 3.29% with a conservative payout ratio of 44.9% and has grown its dividend at an annual rate of 2.66% over the past decade [2] - The stock has a 10-year return of 16.5% excluding dividends, which increases to 80.1% when including reinvested dividends, although this still lags behind the S&P 500's total return of 231% [2] - The company is focusing on shareholder concerns by reducing spending, appointing new board members, and setting emission reduction targets, which could enhance cash margins [3] - Risks include potential stranded assets from long-term hydrocarbon projects and lower investment in low-carbon initiatives compared to peers [3] Medtronic - Medtronic has a dividend yield of 3.15% with a high payout ratio of 93.2% and has increased its dividend at a rate of 6.3% annually over the past decade [4] - The stock's 10-year return is 38.3% excluding dividends and 75.7% including reinvested dividends, both trailing the S&P 500 [4] - The company has strong market positions in heart devices, spinal products, and insulin pumps, with a robust pipeline for new treatments [5] - Challenges include increasing competition in the insulin pump market and potential impacts from Medicare reimbursement rates [6] Microsoft - Microsoft offers a lower dividend yield of 0.73% with a payout ratio of 24.8% and has grown its dividend at an impressive rate of 7.6% annually over the past decade [7] - The stock has delivered a remarkable 10-year return of 810% excluding dividends and 965% including reinvested dividends, significantly outperforming the S&P 500 [7] - Growth drivers include a strong position in the public cloud market with Azure and the success of Microsoft 365, which enhances customer willingness to pay for additional features [8] - Risks involve slowing momentum in subscription shifts, a lack of mobile presence, and not being the top player in key growth areas like Azure [8] Investment Consideration - The three stocks—ExxonMobil, Medtronic, and Microsoft—each present unique attributes for income-focused investors, with a commitment to regular dividend payments and strong market positions [9][10]