Billionaire Ken Griffin Just Increased His Position In This Dividend Stock By 5.848%. Here's Why Now Could Be A Good Time To Buy.

Ken Griffin is a billionaire hedge fund manager and serves as CEO of Citadel Advisors. According to Citadel's most recent 13F filing, the company purchased 18,736,591 shares of Kenvue (NYSE: KVUE) shares during the second quarter, increasing the position by 5,848%.

Below I'll explain why now could be a lucrative time to pick up shares of Kenvue. More importantly, I'll assess the full picture of the company and make the case for why this consumer health company could be a great long-term buy for the right investor.

While you may not know Kenvue by name, I suspect you are well aware of the company's leading health brands. Kenvue is the company behind brands like Aveeno, Listerine, Zyrtec, Tylenol, Motrin, Benadryl, Neosporin, Neutrogena, Nicorette, Band-Aid and many more.

As flu season approaches, Kenvue may witness a seasonally high demand for over-the-counter allergy and cold treatments.

A person at a pharmacy. — Image source: Getty Images.

Kenvue is a spin-off from Johnson & Johnson and has only been trading as an independent entity for just over a year. Despite the limited trading activity, I think the table below, which outlines Citadel's position in Kenvue over the past year, could shed light on some key themes.

Category	Q2 2023	Q3 2023	Q4 2023	Q1 2024	Q2 2024
Shares owned	6.6 million	2.6 million	2.4 million	320,000	19.1 million

Data source: Hedge Follow.

According to public documents, Citadel bought 6.6 million shares of Kenvue around the time of its IPO. But until the second quarter of this year, Griffin and his team had been net sellers of Kenvue stock.

What could inspire such a huge purchase after several consecutive sales periods?

For starters, Kenvue stock is down about 15% since its IPO and is currently trading at a price-to-earnings (P/E) ratio that is below the stock's. S&P500. It's possible that Citadel views Kenvue as a mispriced opportunity and thinks the market is overlooking a potential post-flu season rise in its stock price. With that in mind, I wouldn't be surprised if Citadel views Kenvue more as a trading activity and not a long-term conviction position.

But to be fair, Citadel also bought shares in several other consumer staples or healthcare-related opportunities in the second quarter. For example, the fund has increased positions in Pfizer, UnitedHealth Group, CloroxAnd Human.

It's entirely possible that Citadel bought Kenvue as a hedge against other opportunities in its diverse portfolio.

While I can't say for certain what factors influenced Citadel to build a large position in Kenvue stock, I do know why I would own the stock.

First, Kenvue offers a juicy dividend yield of 3.8% – about triple the average yield of the S&P 500. To me, Kenvue is an attractive opportunity regardless of the season because the company sells products that are always in demand to varying degrees . This nuance is important to realize, because few companies in the consumer sector can boast of such a luxury. I think this makes Kenvue particularly attractive to passive income investors, as the company appears well positioned to maintain or even increase its dividend.

While Kenvue isn't a traditional growth stock, I wouldn't underestimate the company's long-term potential. Kenvue is uniquely positioned as both a defensive and insular company – one that can boast a degree of resilience regardless of economic conditions or seasonal trends among shoppers.

For all these reasons, I consider Kenvue stock a no-brainer and think now is a good time to buy shares with a plan to hold them for the long term.

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Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has and recommends positions in Kenvue and Pfizer. The Motley Fool recommends Johnson & Johnson and UnitedHealth Group and recommends the following options: Long January 2026 $13 calls on Kenvue. The Motley Fool has a disclosure policy.

Billionaire Ken Griffin just increased his position in this dividend stock by 5.848%. Here's why now could be a good time to buy. was originally published by The Motley Fool