Home Depot (NYSE:HD)

Home Depot may not seem as exciting as crypto, but it’s the top holding at OUSA, accounting for 5.08% 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 Q3 of Home Depot’s fiscal 2022, sales increased 5.6% year over year while earnings per share improved by 8.2%.

The company also raised its quarterly dividend by 15.2% to $1.90 per share earlier this year. At the current share price, it yields 2.4%.

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Microsoft (NASDAQ:MSFT)

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

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

So it shouldn’t come as a surprise that Microsoft is the second-largest holding in O’Leary’s OUSA.

Of course, 2022 hasn’t been nice to tech stocks, and Microsoft was caught in the sell-off as well. Year-to-date, shares have fallen by 27%.

But business is on the right track. In the September quarter, revenue increased 11% from a year ago to $50.1 billion. On a constant currency basis, revenue growth was a more impressive 16%.

Notably, revenue from Microsoft’s Intelligent Cloud segment rose 20% year over year to $20.3 billion.

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

Johnson & Johnson (NYSE:JNJ)

With deeply entrenched positions in consumer health, pharmaceuticals and medical devices markets, healthcare giant Johnson & Johnson has delivered consistent returns to investors throughout economic cycles.

Many of the company’s consumer health brands — such as Tylenol, Band-Aid, and Listerine — are household names. In total, JNJ has 29 products each capable of generating over $1 billion in annual sales.

Not only does Johnson & Johnson post recurring annual profits, but it also grows them consistently: Over the past 20 years, Johnson & Johnson’s adjusted earnings have increased at an average annual rate of 8%.

JNJ announced its 60th consecutive annual dividend increase in April and now yields 2.6%.

The stock is also demonstrating its resilience in this ugly market: while the S&P 500 is down double digits year to date, JNJ shares are actually up 1% during the same period.

The company is currently the third-largest holding in OUSA with a weighting of 4.25%.

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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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