Why Hedge Funds Are Piling In These 2 High Yielding Stocks

Zinger Key Points
  • In the second quarter of 2022, Merck's global sales were at $14.6 billion, an increase of 28% from the second quarter of 2021.
  • As of the second quarter of 2022, Wells Fargo saw period-end loans of $944 billion, up 11% from the previous year's second quarter.
Why Hedge Funds Are Piling In These 2 High Yielding Stocks

As we move further into the second half of the year, many investors will find themselves repositioning to better allocate their investments to mitigate risks. Some investors prefer to take positions in equities that hedge funds are buying, as large institutional ownership can create more demand for shares.

Whether you are following your favorite hedge fund manager or activist investor, it can be worthwhile to find out the top owners of a stock. For instance, Wells Fargo's two largest hedge fund shareholders are Eagle Capital Management and Pzena Investment Manager, accounting for a value of $709 million and $666 million, respectively, per Hedge Follow.

While Merck & Co’s two largest shareholders by hedge fund are Barrow Hanley Mewhinney Strauss Holdings and Renaissance Technologies, with a total value of $996 million and $617 million, respectively. These two dividend stocks are hedge funds favorites as we head into the back half of the year.

Wells Fargo & Co. WFC is offering a dividend yield of 2.76% or $1.20 per share annually, making quarterly payments, with a decent track record of increasing its dividends for two years. Wells Fargo is one of the largest banks in the United States, with approximately $1.9 trillion in balance sheet assets, as of 2021.

As of the second quarter of 2022, Wells Fargo saw period-end loans of $944 billion, up 11% from the previous year's second quarter and up 4% from the first quarter of 2022.

“Looking ahead, our results should continue to benefit from the rising interest rate environment with growth in net interest income expected to more than offset any further near-term pressure on non-interest income. We do expect credit losses to increase from these incredibly low levels, but we have yet to see any meaningful deterioration in either our consumer or commercial portfolios”, said Chief Executive Officer Charlie Scharf.

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Merck & Co. Inc MRK is offering a dividend yield of 3.12% or $2.76 per share annually, utilizing quarterly payments, with a strong track record of increasing its dividends for 11 consecutive years. Merck & Co. makes pharmaceutical products to treat several conditions in a number of therapeutic areas, including cardiometabolic disease, cancer, and infections.

In the second quarter of 2022, global sales were at $14.6 billion, an increase of 28% from the second quarter of 2021.

“Our strategy is working and our future is bright. I am very confident that we are well-positioned to achieve our near- and long-term goals, anchored by our commitment to deliver innovative medicines and vaccines to patients and value to all of our stakeholders, including shareholders”, Robert M. Davis, chief executive officer and president commented.

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