Investment mogul and Shark Tank personality Kevin O’Leary isn’t shy about his fondness for cryptocurrencies.
Most recently, he highlighted the ‘“real” opportunity when it comes to fueling the rise of Bitcoin over the long term: sovereign funds in both Saudi Arabia and the United Arab Emirates.
“They have not allocated to crypto yet,” O’Leary said in an interview with Bitcoin bull Anthony Pompliano. “When that happens, you’ll see it reflected in the price of Bitcoin. There’s no question about it.”
O’Leary pegged the opportunity in the “billions and billions and billions” of dollars.
That said, O’Leary’s biggest investment fund, O’Shares U.S. Quality Dividend ETF, doesn’t invest in crypto at all — instead, it seeks businesses with strong profitability, balance sheets, and dividend growth.
While Bitcoin is certainly becoming mainstream, it’s still important to maintain ample diversification with income-producing stocks.
Let’s take a look at the top three holdings of O’Leary’s flagship fund. One (or all) of these dividend picks might be worth purchasing with your extra change.
Home Depot
Home Depot isn’t nearly as exciting as crypto, but it’s the top holding at OUSA, accounting for 6% of the fund’s weight.
The home improvement retail giant has around 2,300 stores, with each one averaging approximately 105,000 square feet of indoor retail space — a size that dwarfs most of its competitors.
One thing that makes Home Depot stand out is how well it performed during the pandemic.
Many brick-and-mortar retailers have struggled since the beginning of COVID-19. Yet Home Depot grew its sales nearly 20% in fiscal 2020 to $132.1 billion.
It even boosted its quarterly dividend by 10% earlier this year and now yields 1.6%.
Shares aren’t cheap, though.
After rallying more than 55% year to date, Home Depot trades at over $410 per share. But you can get a piece of the company using a popular stock trading app that allows you to buy fractions of shares with as much money as you are willing to spend.
Microsoft
Tech stocks aren’t known for their dividends, but software gorilla Microsoft is an exception.
The company announced an 11% increase to its quarterly dividend to 62 cents per share a few months ago. Over the past five years, its payout has grown by 59%.
So it shouldn’t come as a surprise that Microsoft is the second-largest holding in O’Leary’s OUSA.
Business has been booming of late, largely helped by the pandemic-fueled demand for its cloud-computing and video gaming offerings.
In the most recent quarter, Microsoft's total revenue grew 22% to $45.3 billion while net income surged 48% to $20.5 billion.
Year to date, Microsoft shares have returned a whopping 55%, easily topping other trillion-dollar tech giants like Apple (22%) and Amazon (13%).
Of course, if you’re on the fence about jumping into tech stocks near all-time highs, some investing apps might give you a free share of Apple just for signing up.
Johnson & Johnson
With deeply entrenched positions in consumer health, pharmaceuticals, and medical devices, Johnson & Johnson has been able to deliver remarkably consistent returns to investors through thick and thin.
Not only does Johnson & Johnson post recurring profits year in and year out, but it grows them consistently, as well: Over the last 20 years, Johnson & Johnson’s adjusted earnings have increased at an average annual rate of 8%.
That said, management is shaking things up to extract even more value for shareholders.
The company recently announced plans to spin off its consumer health segment into a separate company in order to unlock value. Once the split is complete, investors will be given shares in both companies and, in turn, receive dividend payments from both stocks.
With the spinoff looming and the shares currently offering a decent dividend yield of 2.6%, Johnson & Johnson looks like a particularly timely opportunity.
The company is the third-largest holding in OUSA with a weighting of 4.7%.
O’Leary’s other ‘fine’ asset
Gold, crypto, and common stocks aren’t the only things you’ll find in Mr. Wonderful’s portfolio.
He also utilizes a "private" way to diversify and to profit.
If you want to invest in something that has very little correlation with the violent swings of the stock and crypto market, consider this overlooked asset: fine art.
Investing in art used to be an option only for the ultra-rich like O’Leary. But with a new investing platform, you can take a stake in it, too.
According to the Citi Global Art Market chart, contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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