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3 Overlooked Dividend Stocks That Top Managers Like

These wide-moat firms are currently undervalued.

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Each quarter, we take a look at the recent transactions of some of the top money managers around today--who we call our Ultimate Stock-Pickers. Today we're focusing on dividend-paying stocks that are owned by seven or more of these top managers. We're zeroing in on those names that have wide economic moats and that are undervalued according to our metrics. 

First up is Philip Morris. We have thought for years that the cigarette portfolio alone--which skews to the premium segment and contains Marlboro, the world's largest cigarette brand--made Philip Morris the quality pick of the tobacco group. Philip Morris possesses a formidable franchise in the tobacco industry, and tight government regulations have made barriers to entry almost insurmountable and have kept market shares stable. Plus, the success of the firm's reduced-risk products, or RRPs, has given Philip Morris even stronger competitive advantages. It has invested about $8 billion in RRP since 2008, and today the RRP portfolio accounts for 24% of total revenue. Rivals have failed to build an RRP business anywhere close to that.

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