Updated on August 23rd, 2023 by Bob Ciura
Kevin O’Leary is Chairman of O’Shares Investment Advisors, but you probably know him as “Mr. Wonderful”.
He can be seen on CNBC as well as the television show Shark Tank. Investors who have seen him on TV have likely heard him discuss his investment philosophy.
Mr. Wonderful looks for stocks that exhibit three main characteristics:
- First, they must be quality companies with strong financial performance and solid balance sheets.
- Second, he believes a portfolio should be diversified across different market sectors.
- Third, and perhaps most important, he demands income—he insists the stocks he invests in pay dividends to shareholders.
You can download the complete list of all of O’Shares Investment Advisors stock holdings by clicking the link below:
OUSA owns stocks that display a mix of all three qualities. They are market leaders with strong profits, diversified business models, and they pay dividends to shareholders. The list of OUSA portfolio holdings is an interesting source of quality dividend growth stocks.
This article analyzes the fund’s largest holdings in detail.
Table of Contents
The top 10 holdings from the O’Shares FTSE U.S. Quality Dividend ETF are listed in order of their weighting in the fund, from lowest to highest.
- Pfizer Inc. (PFE)
- T. Rowe Price Group (TROW)
- McDonald’s Corporation (MCD)
- Merck & Company (MRK)
- Johnson & Johnson (JNJ)
- Apple Inc. (AAPL)
- Marsh & McLennan Companies (MMC)
- S&P Global (SPGI)
- Microsoft Corporation (MSFT)
- Home Depot (HD)
- Final Thoughts
- Additional Resources
No. 10: Pfizer Inc. (PFE)
Dividend Yield: 4.5%
Percentage of OUSA Portfolio: 2.98%
Pfizer Inc. is a global pharmaceutical company that focuses on prescription drugs and vaccines. Pfizer’s top products are Eliquis, Ibrance, Prevnar, Enebrel (international), Sutent, Xtandi, Vyndaqel/ Vyndamax, Inlyta, Xeljanz, Plaxlovid, and Comiranty.
Pfizer reported Q2 2023 results on August 1st, 2023.
Source: Investor Presentation
Companywide revenue fell (-53%) to $12.73 billion and adjusted diluted earnings per share dropped (-67%) to $0.67 versus $2.04 on a year-over-year basis because of declining COVID-19 vaccine and anti-viral drug sales. Diluted GAAP earnings per share fell (-77%) to $0.41 from $1.73 in comparable quarters.
Click here to download our most recent Sure Analysis report on Pfizer (preview of page 1 of 3 shown below):
No. 9: T. Rowe Price Group (TROW)
Dividend Yield: 4.5%
Percentage of OUSA Portfolio: 3.22%
T. Rowe Price Group, founded in 1937 and headquartered in Baltimore, MD, is one of the largest publicly traded asset managers. The company provides a broad array of mutual funds, sub-advisory services, and separate account management for individual and institutional investors, retirement plans and financial intermediaries.
On July 28th, 2023, T. Rowe Price announced second quarter results for the period ending June 30th, 2023.
Source: Investor Presentation
For the quarter, revenue grew 6.6% to $1.61 billion, beating estimates by $20 million. Adjusted earnings-per-share of $2.02 compared to $1.79 in the prior year, which was $0.29 higher than expected.
During the quarter, assets under management (AUM) increased 6.8% to $1.399 trillion. Market appreciation of $57.7 billion more than offset $20 billion of net client outflows. Operating expenses of $1.077 billion was a 27.5% increase year-over-year, but were higher by just 2.3% from the first quarter of 2023.
Click here to download our most recent Sure Analysis report on TROW (preview of page 1 of 3 shown below):
No. 8: McDonald’s Corporation (MCD)
Dividend Yield: 2.2%
Percentage of OUSA Portfolio: 3.25%
McDonald’s is the world’s leading global foodservice retailer with nearly 40,000 locations in over 100 countries. Approximately 93% of the stores are independently owned and operated. The company has raised its dividend every year since paying its first dividend in 1976, qualifying it as a Dividend Aristocrat.
On July 27th, 2023, McDonald’s reported Q2 2023 results. Total revenue came in at $6,497.5M, a +14% increase from $5,718.4M compared to Q2 2022 on a 12% rise in system-wide sales adjusting for currency headwinds. Revenue climbed 18% at company-owned stores, while revenue increased 12% at franchised restaurants. Diluted earnings surged 97% to $3.15 per share compared to $1.60 per share in comparable periods on lower operating costs.
Click here to download our most recent Sure Analysis report on MCD (preview of page 1 of 3 shown below):
No. 7: Merck & Company (MRK)
Dividend Yield: 2.6%
Percentage of OUSA Portfolio: 3.74%
Merck & Company is one of the largest healthcare companies in the world. Merck manufactures prescription medicines, vaccines, biologic therapies, and animal health products. Merck generates annual revenues of ~$59 billion.
On July 16th, 2023, Merck completed its previously announced purchase of clinical-stage biotech company Prometheus (RXDX) for $10.8 billion in cash.
On August 1st, 2023, Merck announced second quarter results for the period ending June 30th, 2023. Results were led by strong growth of the flagship product Keytruda.
Source: Investor Presentation
For the quarter, revenue improved 3% to $15 billion, beating estimates by $560 million. Currency exchange was a 4% headwind to results. Adjusted earnings-per-share was a -$2.06, primarily due to the charge taken for the acquisition of Prometheus.
Click here to download our most recent Sure Analysis report on Merck (preview of page 1 of 3 shown below):
No. 6: Johnson & Johnson (JNJ)
Dividend Yield: 2.9%
Percentage of OUSA Portfolio: 3.98%
Johnson & Johnson is a global healthcare giant. The company currently operates three segments: Consumer, Pharmaceutical, and Medical Devices & Diagnostics. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries.
On July 20th, 2023, Johnson & Johnson announced results for the second quarter for the period ending June 30th, 2023.
Source: Investor Presentation
For the quarter, revenue grew 6.4% to $25.5 billion, which was $860 million more than expected. Adjusted earnings-pershare of $2.80 compared favorably to $2.59 in the prior year and was $0.18 more than anticipated. Excluding unfavorable currency exchange, revenue grew 7.5%. Pharmaceutical revenues grew 3.1% on a reported basis (up 7.2% excluding currency exchange).
The company has increased its dividend for over 60 consecutive years, making it a Dividend King.
Click here to download our most recent Sure Analysis report on JNJ (preview of page 1 of 3 shown below):
No. 5: Apple (AAPL)
Dividend Yield: 0.53%
Percentage of OUSA Portfolio: 4.08%
Apple designs, manufactures and sells technology products such as iPhones, iPads, Mac, Apple Watch and Apple TV. Apple also has a services business that sells music, apps, and subscriptions.
Apple stock is the #1 holding of Berkshire Hathaway (BRK.B), making the technology giant one of the top Warren Buffett stocks.
On August 3rd, 2023, Apple reported Q3 fiscal year 2023 results for the period ending July 1st, 2023. (Apple’s fiscal year ends the last Saturday in September). For the quarter, Apple generated revenue of $81.8 billion, a -1.4% decline compared to Q3 2022.
Product sales were down -5.7%, driven by a -19.8% decline in iPad sales. The iPhone segment (48% of total sales) was down -2.4%. Service sales increased 8.2% to $21.2 billion and made up 25.9% of all sales in the quarter. Net income equaled $19.88 billion or $1.26 per share compared to $19.44 billion or $1.20 per share in Q2 2022.
Click here to download our most recent Sure Analysis report on AAPL (preview of page 1 of 3 shown below):
No. 4: Marsh & McLennan Companies (MMC)
Dividend Yield: 1.5%
Percentage of OUSA Portfolio: 4.18%
Marsh McLennan is a global professional services holding company which is active in risk, strategy, and people. The four main global businesses of the corporation are Marsh (insurance broker and risk management), Guy Carpenter (reinsurance and capital strategies), Mercer (human resources and consulting) and Oliver Wyman (strategy, economic and brand consulting).
On July 11th, 2023, Marsh McLennan declared a 20.3% quarterly dividend increase to $0.71 per share.
Marsh McLennan reported second quarter 2023 results on July 20th, 2023. Consolidated revenue for the quarter increased 9% year-over-year to $5.9 billion. Adjusted operating income increased 17% year-over-year to $1.5 billion, and adjusted EPS rose 16% to $2.20 for the quarter, compared to $1.89 in Q2 2022.
Click here to download our most recent Sure Analysis report on MMC (preview of page 1 of 3 shown below):
No. 3: S&P Global (SPGI)
Dividend Yield: 0.92%
Percentage of Portfolio: 4.27%
S&P Global is a worldwide provider of financial services and business information with a market capitalization of $113 billion and revenue of about $12 billion. Through its various segments, it provides credit ratings, benchmarks and indices, analytics, and other data to commodity market participants, capital markets, and automotive markets.
S&P Global has paid dividends continuously since 1937 and has increased its payout for 50 consecutive years.
S&P posted second quarter earnings on July 27th, 2023, and results were somewhat mixed. Adjusted earnings-per-share came to $3.12, which was a penny light against expectations. Revenue was up 3.7% to $3.1 billion, which was ahead of estimates by $40 million. Revenue gained due to broad strength across the business, which included an 8% gain in subscription products.
Click here to download our most recent Sure Analysis report on SPGI (preview of page 1 of 3 shown below):
No. 2: Microsoft Corporation (MSFT)
Dividend Yield: 0.83%
Percentage of OUSA Portfolio: 4.84%
Microsoft Corporation, founded in 1975 and headquartered in Redmond, WA, develops, manufactures and sells both software and hardware to businesses and consumers.
Its offerings include operating systems, business software, software development tools, video games and gaming hardware, and cloud services.
In late July, Microsoft reported (7/25/23) financial results for the fourth quarter of fiscal 2023 (its fiscal year ends June 30th). The company grew its revenue 8% over last year’s quarter. Growth came from Intelligent Cloud and Productivity & Business Processes, which grew 15% and 10%, respectively.
Sales of Azure, Microsoft’s high-growth cloud platform, grew 26%. As a result, earnings-per-share grew 21%, from $2.23 to $2.69, and exceeded the analysts’ consensus by $0.14.
Click here to download our most recent Sure Analysis report on Microsoft (preview of page 1 of 3 shown below):
No. 1: Home Depot (HD)
Dividend Yield: 2.6%
Percentage of OUSA Portfolio: 5.14%
Home Depot was founded in 1978, and since that time has grown into the leading home improvement retailer with almost 2,300 stores in the U.S., Canada, and Mexico. In all, Home Depot generates annual revenue of approximately $130 billion.
Home Depot reported second quarter 2023 results on August 15th, 2023. The company reported second quarter sales of $42.9 billion, down 2.0% year-over-year. Comparable sales in the quarter also decreased 2.0%. Net earnings equaled $4.7 billion, or $4.65 per share, compared to $5.2 billion, or $5.05 per share in Q2 2022.
Click here to download our most recent Sure Analysis report on HD (preview of page 1 of 3 shown below):
Final Thoughts
Kevin O’Leary has become a household name due to his appearances on the TV show Shark Tank. But he is also a well-known asset manager, and his investment philosophy largely aligns with Sure Dividend’s. Specifically, Mr. Wonderful typically invests in stocks with large and profitable businesses, with strong balance sheets and consistent dividend growth every year.
Not all of these stocks are currently rated as buys in the Sure Analysis Research Database, which ranks stocks based on expected total return due to a combination of earnings per share growth, dividends, and changes in the price-to-earnings multiple.
However, several of these 10 stocks are valuable holdings for a long-term dividend growth portfolio.
Additional Resources
See the articles below for analysis on other major investment firms/asset managers/gurus:
If you are interested in finding more high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:
- The 20 Highest Yielding Dividend Aristocrats
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 48 stocks with 50+ years of consecutive dividend increases.
- The 20 Highest Yielding Dividend Kings
- The Dividend Achievers List: a group of stocks with 10+ years of consecutive dividend increases.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500. - The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Monthly Dividend Stocks List: contains stocks that pay dividends each month, for 12 payments per year.
- The 20 Highest Yielding Monthly Dividend Stocks
- The High Dividend Stocks List: high dividend stocks are suited for investors that need income now (as opposed to growth later) by listing stocks with 5%+ dividend yields.
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: