In the first quarter of 2024, billionaire money managers made significant purchases of high-yield healthcare stocks, particularly in Pfizer and Walgreens Boots Alliance. These investments caught the attention of investors, as they sought to learn from the strategies employed by these successful individuals.

Two Sigma Investments' John Overdeck and David Siegel acquired more than 8 million shares of Pfizer, while other billionaires also expressed interest in the pharmaceutical giant. Despite facing sales challenges with its COVID-19 vaccines and treatments, Pfizer's stock has become a target for bargain hunters.

Pfizer's stock, which has decreased by about half since its peak in 2021, currently offers a tempting 5.8% dividend yield. The company has consistently raised its dividends since 2009, and investors can expect another increase this December. Furthermore, with adjusted earnings projected to exceed the annual dividend commitment, Pfizer presents an attractive investment opportunity.

Walgreens Boots Alliance, on the other hand, experienced a rough start to the year. The company reduced its dividend payout from $0.48 to $0.25 per share, causing concern among investors. Despite this setback, several billionaire investors showed interest in Walgreens, including Renaissance Technologies and its recently deceased founder, Jim Simons.

While Walgreens had been considered a reliable dividend stock in the past, its attempts to expand into healthcare services have faced significant challenges. The company's integration of VillageMD resulted in the closure of 160 clinics and a $5.8 billion impairment. This, coupled with the increasing competition posed by online pharmacies, indicates a lack of growth potential in Walgreens' retail pharmacy segment.

Despite the interest from billionaire investors, it may be wise for other investors to exercise caution when considering Walgreens as an investment option. Without evidence of successful vertical integration in a related business, it might be best to steer clear of the stock for now.

Overall, the investments made by billionaire money managers in Pfizer and Walgreens Boots Alliance reflect their confidence in the long-term potential of these dividend stocks. While Pfizer offers promising growth prospects and consistent dividend raises, investors should approach Walgreens cautiously due to its challenges in diversifying its business. As always, it is important for individuals to conduct their own research and analysis before making any investment decisions.