Kevin O’Leary sees ‘trillions’ coming to crypto — but he still loves these income stocks
“For the first time ever, my crypto exposure is greater than gold.”
That’s what investment mogul and Shark Tank personality Kevin O’Leary told Stansberry Research in an interview earlier this month.
In fact, Mr. Wonderful plans to double his crypto holdings to 7% of his portfolio by the end of this year, largely because he sees “trillions of dollars” of interest coming into the space.
That said, O’Leary’s largest investment fund, O’Shares U.S. Quality Dividend ETF (OUSA), 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 spare change.
Home Depot
Home Depot (NYSE:HD) isn’t nearly as exciting as crypto, but it’s the top holding at OUSA, accounting for 5.3% 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 1.9%.
Shares aren’t cheap, though.
After rallying more than 30% year to date, Home Depot trades at over $350 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 **(Nasdaq:MSFT) is an exception.
The company announced an 11% increase to its quarterly dividend to 62 cents per share last month. 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
In the fiscal year ended June 30, 2021, Microsoft’s revenue grew 18% to $168.1 billion while adjusted EPS surged 38% to $7.97.
Year to date, Microsoft shares have returned a whopping 40%, easily topping other trillion-dollar tech giants like Apple (11.8%) and Amazon (7%).
Of course, if you’re on the fence about jumping into tech stocks near all-time highs, some investing apps will give you a free share of Apple just for signing up.
Johnson & Johnson
Healthcare is known as a recession-proof industry.
With deeply entrenched positions in consumer health, pharmaceuticals, and medical devices, Johnson & Johnson (NYSE:JNJ) 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%.
Things are even better on the dividend front — the healthcare giant has raised its payout to shareholders for 59 consecutive years.
Not many companies have that kind of track record.
Year to date, shares are up just 3%. But for long-term investors, Johnson & Johnson is a name that should not be ignored.
The company is the third-largest holding in OUSA with a weighting of 4.9%.
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 fine art by the likes of Banksy and Andy Warhol used to be an option only for the ultra-rich like O’Leary.
But with a new investing platform, you can invest in iconic artworks too, just like Jeff Bezos and Peggy Guggenheim.
According to the Citi Global Art Market chart, contemporary artwork has offered a return of 14% per year over the past 25 years, easily topping the 9.5% annual return from the S&P 500.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
