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Up to date on August twenty third, 2023 by Bob Ciura
Kevin O’Leary is Chairman of O’Shares Funding Advisors, however you in all probability know him as “Mr. Great”.
He could be seen on CNBC in addition to the tv present Shark Tank. Traders who’ve seen him on TV have probably heard him talk about his funding philosophy.
Mr. Great appears for shares that exhibit three fundamental traits:
First, they have to be high quality corporations with sturdy monetary efficiency and stable steadiness sheets.
Second, he believes a portfolio must be diversified throughout totally different market sectors.
Third, and maybe most vital, he calls for earnings—he insists the shares he invests in pay dividends to shareholders.
You possibly can obtain the whole checklist of all of O’Shares Funding Advisors inventory holdings by clicking the hyperlink beneath:
OUSA owns shares that show a mixture of all three qualities. They’re market leaders with sturdy income, diversified enterprise fashions, they usually pay dividends to shareholders. The checklist of OUSA portfolio holdings is an attention-grabbing supply of high quality dividend development shares.
This text analyzes the fund’s largest holdings intimately.
Desk of Contents
The highest 10 holdings from the O’Shares FTSE U.S. High quality Dividend ETF are listed so as of their weighting within the fund, from lowest to highest.
No. 10: Pfizer Inc. (PFE)
Dividend Yield: 4.5%
Share of OUSA Portfolio: 2.98%
Pfizer Inc. is a worldwide pharmaceutical firm that focuses on prescribed drugs and vaccines. Pfizer’s high merchandise are Eliquis, Ibrance, Prevnar, Enebrel (worldwide), Sutent, Xtandi, Vyndaqel/ Vyndamax, Inlyta, Xeljanz, Plaxlovid, and Comiranty.
Pfizer reported Q2 2023 outcomes on August 1st, 2023.
Supply: Investor Presentation
Companywide income 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 foundation due to declining COVID-19 vaccine and anti-viral drug gross sales. Diluted GAAP earnings per share fell (-77%) to $0.41 from $1.73 in comparable quarters.
Click on right here to obtain our most up-to-date Certain Evaluation report on Pfizer (preview of web page 1 of three proven beneath):
No. 9: T. Rowe Value Group (TROW)
Dividend Yield: 4.5%
Share of OUSA Portfolio: 3.22%
T. Rowe Value Group, based in 1937 and headquartered in Baltimore, MD, is without doubt one of the largest publicly traded asset managers. The corporate offers a broad array of mutual funds, sub-advisory companies, and separate account administration for particular person and institutional buyers, retirement plans and monetary intermediaries.
On July twenty eighth, 2023, T. Rowe Value introduced second quarter outcomes for the interval ending June thirtieth, 2023.
Supply: Investor Presentation
For the quarter, income grew 6.6% to $1.61 billion, beating estimates by $20 million. Adjusted earnings-per-share of $2.02 in comparison with $1.79 within the prior yr, which was $0.29 greater than anticipated.
Throughout the quarter, belongings below administration (AUM) elevated 6.8% to $1.399 trillion. Market appreciation of $57.7 billion greater than offset $20 billion of internet shopper outflows. Working bills of $1.077 billion was a 27.5% enhance year-over-year, however had been greater by simply 2.3% from the primary quarter of 2023.
Click on right here to obtain our most up-to-date Certain Evaluation report on TROW (preview of web page 1 of three proven beneath):
No. 8: McDonald’s Company (MCD)
Dividend Yield: 2.2%
Share of OUSA Portfolio: 3.25%
McDonald’s is the world’s main world foodservice retailer with almost 40,000 areas in over 100 international locations. Roughly 93% of the shops are independently owned and operated. The corporate has raised its dividend yearly since paying its first dividend in 1976, qualifying it as a Dividend Aristocrat.
On July twenty seventh, 2023, McDonald’s reported Q2 2023 outcomes. Complete income got here in at $6,497.5M, a +14% enhance from $5,718.4M in comparison with Q2 2022 on a 12% rise in system-wide gross sales adjusting for forex headwinds. Income climbed 18% at company-owned shops, whereas income elevated 12% at franchised eating places. Diluted earnings surged 97% to $3.15 per share in comparison with $1.60 per share in comparable intervals on decrease working prices.
Click on right here to obtain our most up-to-date Certain Evaluation report on MCD (preview of web page 1 of three proven beneath):
No. 7: Merck & Firm (MRK)
Dividend Yield: 2.6%
Share of OUSA Portfolio: 3.74%
Merck & Firm is without doubt one of the largest healthcare corporations on this planet. Merck manufactures prescription medicines, vaccines, biologic therapies, and animal well being merchandise. Merck generates annual revenues of ~$59 billion.
On July sixteenth, 2023, Merck accomplished its beforehand introduced buy of clinical-stage biotech firm Prometheus (RXDX) for $10.8 billion in money.
On August 1st, 2023, Merck introduced second quarter outcomes for the interval ending June thirtieth, 2023. Outcomes had been led by sturdy development of the flagship product Keytruda.
Supply: Investor Presentation
For the quarter, income improved 3% to $15 billion, beating estimates by $560 million. Forex change was a 4% headwind to outcomes. Adjusted earnings-per-share was a -$2.06, primarily because of the cost taken for the acquisition of Prometheus.
Click on right here to obtain our most up-to-date Certain Evaluation report on Merck (preview of web page 1 of three proven beneath):
No. 6: Johnson & Johnson (JNJ)
Dividend Yield: 2.9%
Share of OUSA Portfolio: 3.98%
Johnson & Johnson is a worldwide healthcare big. The corporate presently operates three segments: Client, Pharmaceutical, and Medical Units & Diagnostics. The company consists of some 250 subsidiary corporations with operations in 60 international locations and merchandise offered in over 175 international locations.
On July twentieth, 2023, Johnson & Johnson introduced outcomes for the second quarter for the interval ending June thirtieth, 2023.
Supply: Investor Presentation
For the quarter, income grew 6.4% to $25.5 billion, which was $860 million greater than anticipated. Adjusted earnings-pershare of $2.80 in contrast favorably to $2.59 within the prior yr and was $0.18 greater than anticipated. Excluding unfavorable forex change, income grew 7.5%. Pharmaceutical revenues grew 3.1% on a reported foundation (up 7.2% excluding forex change).
The corporate has elevated its dividend for over 60 consecutive years, making it a Dividend King.
Click on right here to obtain our most up-to-date Certain Evaluation report on JNJ (preview of web page 1 of three proven beneath):
No. 5: Apple (AAPL)
Dividend Yield: 0.53%
Share of OUSA Portfolio: 4.08%
Apple designs, manufactures and sells expertise merchandise akin to iPhones, iPads, Mac, Apple Watch and Apple TV. Apple additionally has a companies enterprise that sells music, apps, and subscriptions.
Apple is the #1 holding of Berkshire Hathaway (BRK.B), making the expertise big one of many high Warren Buffett shares.
On August third, 2023, Apple reported Q3 fiscal yr 2023 outcomes for the interval ending July 1st, 2023. (Apple’s fiscal yr ends the final Saturday in September). For the quarter, Apple generated income of $81.8 billion, a -1.4% decline in comparison with Q3 2022.
Product gross sales had been down -5.7%, pushed by a -19.8% decline in iPad gross sales. The iPhone section (48% of whole gross sales) was down -2.4%. Service gross sales elevated 8.2% to $21.2 billion and made up 25.9% of all gross sales within the quarter. Internet earnings equaled $19.88 billion or $1.26 per share in comparison with $19.44 billion or $1.20 per share in Q2 2022.
Click on right here to obtain our most up-to-date Certain Evaluation report on AAPL (preview of web page 1 of three proven beneath):
No. 4: Marsh & McLennan Firms (MMC)
Dividend Yield: 1.5%
Share of OUSA Portfolio: 4.18%
Marsh McLennan is a worldwide skilled companies holding firm which is lively in danger, technique, and other people. The 4 fundamental world companies of the company are Marsh (insurance coverage dealer and danger administration), Man Carpenter (reinsurance and capital methods), Mercer (human assets and consulting) and Oliver Wyman (technique, financial and model consulting).
On July eleventh, 2023, Marsh McLennan declared a 20.3% quarterly dividend enhance to $0.71 per share.
Marsh McLennan reported second quarter 2023 outcomes on July twentieth, 2023. Consolidated income for the quarter elevated 9% year-over-year to $5.9 billion. Adjusted working earnings elevated 17% year-over-year to $1.5 billion, and adjusted EPS rose 16% to $2.20 for the quarter, in comparison with $1.89 in Q2 2022.
Click on right here to obtain our most up-to-date Certain Evaluation report on MMC (preview of web page 1 of three proven beneath):
No. 3: S&P World (SPGI)
Dividend Yield: 0.92%
Share of Portfolio: 4.27%
S&P World is a worldwide supplier of monetary companies and enterprise info with a market capitalization of $113 billion and income of about $12 billion. By means of its numerous segments, it offers credit score scores, benchmarks and indices, analytics, and different information to commodity market individuals, capital markets, and automotive markets.
S&P World has paid dividends constantly since 1937 and has elevated its payout for 50 consecutive years.
S&P posted second quarter earnings on July twenty seventh, 2023, and outcomes had been considerably combined. Adjusted earnings-per-share got here to $3.12, which was a penny mild in opposition to expectations. Income was up 3.7% to $3.1 billion, which was forward of estimates by $40 million. Income gained as a result of broad energy throughout the enterprise, which included an 8% achieve in subscription merchandise.
Click on right here to obtain our most up-to-date Certain Evaluation report on SPGI (preview of web page 1 of three proven beneath):
No. 2: Microsoft Company (MSFT)
Dividend Yield: 0.83%
Share of OUSA Portfolio: 4.84%
Microsoft Company, based in 1975 and headquartered in Redmond, WA, develops, manufactures and sells each software program and {hardware} to companies and customers.
Its choices embrace working methods, enterprise software program, software program growth instruments, video video games and gaming {hardware}, and cloud companies.
In late July, Microsoft reported (7/25/23) monetary outcomes for the fourth quarter of fiscal 2023 (its fiscal yr ends June thirtieth). The corporate grew its income 8% over final yr’s quarter. Progress got here from Clever Cloud and Productiveness & Enterprise Processes, which grew 15% and 10%, respectively.
Gross sales of Azure, Microsoft’s high-growth cloud platform, grew 26%. In consequence, earnings-per-share grew 21%, from $2.23 to $2.69, and exceeded the analysts’ consensus by $0.14.
Click on right here to obtain our most up-to-date Certain Evaluation report on Microsoft (preview of web page 1 of three proven beneath):
No. 1: Residence Depot (HD)
Dividend Yield: 2.6%
Share of OUSA Portfolio: 5.14%
Residence Depot was based in 1978, and since that point has grown into the main residence enchancment retailer with virtually 2,300 shops within the U.S., Canada, and Mexico. In all, Residence Depot generates annual income of roughly $130 billion.
Residence Depot reported second quarter 2023 outcomes on August fifteenth, 2023. The corporate reported second quarter gross sales of $42.9 billion, down 2.0% year-over-year. Comparable gross sales within the quarter additionally decreased 2.0%. Internet earnings equaled $4.7 billion, or $4.65 per share, in comparison with $5.2 billion, or $5.05 per share in Q2 2022.
Click on right here to obtain our most up-to-date Certain Evaluation report on HD (preview of web page 1 of three proven beneath):
Ultimate Ideas
Kevin O’Leary has change into a family identify as a result of his appearances on the TV present Shark Tank. However he’s additionally a widely known asset supervisor, and his funding philosophy largely aligns with Certain Dividend’s. Particularly, Mr. Great usually invests in shares with massive and worthwhile companies, with sturdy steadiness sheets and constant dividend development yearly.
Not all of those shares are presently rated as buys within the Certain Evaluation Analysis Database, which ranks shares primarily based on anticipated whole return as a result of a mix of earnings per share development, dividends, and adjustments within the price-to-earnings a number of.
Nonetheless, a number of of those 10 shares are precious holdings for a long-term dividend development portfolio.
Extra Sources
See the articles beneath for evaluation on different main funding corporations/asset managers/gurus:
If you’re interested by discovering extra high-quality dividend development shares appropriate for long-term funding, the next Certain Dividend databases will likely be helpful:
The main home inventory market indices are one other stable useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month:
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to [email protected].
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