T - Billionaires Are Buying Up Beaten-Down AT&T Stock. Should Dividend-Seeking Investors Follow Their Lead?
2024-07-08 05:39:00 ET
Billionaire investors don't necessarily need quarterly payments from dividend stocks to cover their day-to-day expenses, but they buy them anyway. That's because businesses that distribute a portion of their profit to shareholders tend to outperform businesses that haven't made such a commitment.
History says buying dividend payers can help your portfolio outperform the broad market. Between 1973 and 2023, dividend-paying stocks in the benchmark S&P 500 index delivered a 9.17% average annual return. That's more than double the rate of return from non-dividend-payers in the same index.
With expectations of above-average returns, hedge funds run by billionaires are buying up AT&T (NYSE: T) stock left and right. In the first quarter, Steven Cohen's firm, Point72, added about 15.3 million shares of the stock to its portfolio. Jim Simons passed away in May, but the firm he managed, Renaissance Technologies, bought 3.9 million shares of AT&T in the first quarter.
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Billionaires Are Buying Up Beaten-Down AT&T Stock. Should Dividend-Seeking Investors Follow Their Lead?