In a surprising trend, billionaire investors have been gravitating towards ultra-high-yield dividend stocks, as revealed in the recently filed Form 13F reports. These select businesses, with market-crushing yields ranging from 6% to 15.1%, have caught the attention of prominent money managers.

Dividend stocks have consistently outperformed non-dividend paying companies over the past 50 years. A study conducted by Hartford Funds found that dividend stocks more than doubled the average annual return of non-payers between 1973 and 2023. This impressive outperformance has not gone unnoticed by the smartest minds on Wall Street.

During the first quarter, three ultra-high-yield dividend stocks garnered significant interest from billionaire investors. Telecom giant Verizon Communications, with a nearly 6.6% yield, saw shares being snapped up by three billionaires. This telecom company's ability to provide wireless access and broadband services as essential needs, combined with the growth opportunities presented by the 5G revolution, has attracted investor attention.

Pharmaceutical juggernaut Pfizer, another high-yield dividend stock, also attracted five billionaires during the first quarter. Despite recent underperformance, Pfizer's successful COVID-19 vaccines and strong non-COVID sales growth have positioned the company favorably. Additionally, Pfizer's acquisition of cancer-drug developer Seagen has added to the excitement surrounding the stock.

Mortgage real estate investment trust (REIT) AGNC Investment, supporting a jaw-dropping 15% yield, joined the list of ultra-high-yield dividend stocks favored by billionaires. The mortgage REIT industry, which has faced criticism in recent years, may see a turnaround with the expected normalization of the yield curve. Historical data suggests that patience may pay off for investors in mortgage REITs, as interest rates are bound to change. Furthermore, AGNC Investment's investment portfolio, consisting mainly of liquid agency assets, provides added security to sustain its high-octane dividend.

It is worth noting that billionaire investors have been drawn to these high-yield dividend stocks despite market volatility and uncertainties. The attractive yields, combined with the stability and growth potential of these established businesses, are seen as compelling investment opportunities.

While this trend does not guarantee success for individual investors, it does highlight the growing appeal and long-term potential of high-yield dividend stocks. As always, investors should conduct thorough research and consider their own financial goals and risk tolerance before making any investment decisions.

Disclaimer: The opinions expressed in this article are solely those of the author and should not be regarded as investment advice. Investors are advised to consult with a certified financial advisor before making any investment decisions.