Given her focus on high-growth areas of the market, you might be shocked to know that some of her picks actually have impressive dividend yields too.
Below, we’ll look at two of these high-dividend holdings to see why they are so appealing to both growth investors and income investors.
AbbVie (NYSE:ABBV) is maybe the most well-known dividend paying stock inside the funds of Cathie Wood. The pharmaceutical firm is a Dividend Titan, as it has continued to increase its annual dividends to shareholders since it spun off from Abbott Laboratories (NYSE:ABT) in the 2010s. Abbott itself has a long record stretching back to around half a century.
AbbVie is not a big holding for Wood, but her ARK Genomic Revolution Fund (NYSEMKT:ARKG) has around $60 million in the company. That’s about 0.66% of its total assets.
With a market cap of $200 billion, AbbVie is large enough to do strategic acquisitions of companies in vital areas that Wood sees as having higher growth potential. Those include genomic sequencing, multi-cancer screens, and gene and cell therapies. AbbVie has already completed research and development on new cancer drugs using genomic analysis, and good results suggest they will make even more of a drive to move in that area. Meanwhile, investors get the benefit from a dividend yield reaching 4.5%.
Novartis (NYSE:NVS) also looks good to income and growth investors both. The stock has a dividend yield at 3.5%, but like AbbVie, the pharmaceutical firm is researching new therapies that it believes it can use to develop generations of new treatments to keep their sales going up over the long term.
Novartis is also a pick that Wood seems to be more convinced about. You’ll see its shares in both her Genomics ETF and in her flagship Innovation Fund, with overall holdings reaching almost $380 million in the Swiss drugmaker. It’s a top-10 investment in the Genomics ETF, making up over 3% of all assets.
Novartis has done great work in the drug discovery area, by working to create a digital data science platform. That means the company is a broad play for Wood, as products that Novartis creates might end up being useful to the other companies inside her ETFs.
Author: Scott Dowdy