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Dividend stocks

O’Leary is a believer in investing in dividend stocks.

“When I started to do some research I found out one interesting fact that changed my investment philosophy forever,” he said in a Forbes interview. “Over the last 40 years, 71% of the market returns came from dividends, not capital appreciation.”

“So rule one for me is I’ll never own stuff that doesn’t pay a dividend. Ever.”

If you share the same view, here’s a look at the top two holdings at O’Leary’s flagship ETF — ALPS O’Shares U.S. Quality Dividend ETF (OUSA).


Tech stocks aren’t known for their dividends, but software gorilla Microsoft (MSFT)​ is an exception.

The company announced a 10% increase to its quarterly dividend to 68 cents per share in September 2022. Over the past five years, its quarterly payout has grown by 62%.

At the current share price, Microsoft provides an annual dividend yield of just over 1%.

The yield may not seem like much, but Microsoft is the currently largest holding in O’Leary’s OUSA with a weighting of 5.26%.

2022 wasn’t nice to tech stocks, and Microsoft was caught in the sell-off as well. Over the past 12 months, shares have fallen by 9.8%.

But business is on the right track. In the December quarter, revenue increased 2% from a year ago to $52.7 billion. On a constant currency basis, revenue growth was a more impressive 7%.

Given the pullback in its share price, Microsoft could give contrarian investors something to think about.

Home Depot

Home Depot (HD) is the second-largest holding at OUSA, accounting for 4.82% 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, dwarfing many competitors.

While many brick-and-mortar retailers floundered 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 Home Depot’s fiscal 2022, sales increased 4.1% year over year while earnings per share improved by 7.5%.

Last month, the company raised its quarterly dividend by 10% to $2.09 per share. At the current share price, it yields 2.9%.

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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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