Many celebrities were affected by the fall of the FTX cryptocurrency exchange. That includes Kevin O’Leary – star of CNBC’s Shark Tank program – who was a spokesperson and investor in the exchange.
Renowned economist Nouriel Roubini is calling it.
“Kevin O’Leary is a paid hack for FTX,” Roubini said at Abu Dhabi Finance Week. “I hope CNBC gets rid of it.”
To be sure, O’Leary is one of the biggest proponents of cryptocurrency, but that’s not his entire investment strategy – far from it.
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Mr. Wonderful is a believer in investing in dividend stocks.
“When I started doing some research I discovered one interesting fact that changed my investment philosophy forever,” he said in an interview with Forbes. “Over the past 40 years, 71% of market returns have come from dividends, not capital appreciation.”
“So one rule for me is that I will never have stuff that doesn’t pay a dividend. ever.”
If you feel the same way, here are the top three holdings of O’Leary’s flagship ETF – ALPS O’Shares U.S. Quality Dividend ETF (OUSA).
Home Depot (NYSE:HD)
Home Depot may not seem as exciting as a crypto, but it is the top holding at OUSA, accounting for 5.08% of the fund’s weight.
The home improvement retail giant has about 2,300 stores, each averaging about 105,000 square feet of indoor retail space, dwarfing many competitors.
While many brick-and-mortar retailers have collapsed during the pandemic, Home Depot grew its sales nearly 20% in fiscal 2020 to $132.1 billion.
And the company continued its momentum as the economy reopened.
In Q3 of Home Depot’s fiscal 2022, sales increased 5.6% year over year and earnings per share improved 8.2%.
The company also raised its quarterly dividend by 15.2% to $1.90 per share earlier this year. At the current share price, it yields 2.4%.
Tech stocks aren’t known for their dividends, but software gorilla Microsoft is an exception.
The company announced a 10% increase in its quarterly dividend to 68 cents per share in September. Over the past five years, his quarterly payout has increased by 62%.
So it shouldn’t surprise me that OUSA O’Leary’s second largest holding is Microsoft.
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Of course, 2022 wasn’t pretty for tech stocks, and Microsoft was also caught in the selloff. Year to date, shares are down 27%.
But business is on the right track. In the September quarter, revenue increased 11% from a year ago to $50.1 billion. On a constant currency basis, revenue growth was a more impressive 16%.
In particular, revenue from Microsoft’s Intelligent Cloud segment rose 20% year over year to $20.3 billion.
Given the downturn in its share price, Microsoft could give contrarian investors something to think about.
Johnson & Johnson (NYSE:JNJ)
With deeply entrenched positions in the consumer health, pharmaceutical and medical device markets, healthcare giant Johnson & Johnson has delivered consistent returns to investors throughout economic cycles.
Many of the company’s consumer health brands—such as Tylenol, Band-Aid, and Listerine—are household names. In total, JNJ has 29 products each capable of generating over $1 billion in annual sales.
Johnson & Johnson not only makes recurring annual profits, but also grows them consistently: Over the past 20 years, Johnson & Johnson’s adjusted earnings have grown at an average annual rate of 8%.
JNJ announced its 60th consecutive annual dividend increase in April and now yields 2.6%.
The stock is also showing its resilience in this ugly market: while the S&P 500 is down double-digits in the year to date, JNJ shares are up 1% during the same period.
The company is currently the third largest holding in OUSA with a weighting of 4.25%.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.