In this article, we discuss the 10 companies to consider in the portfolio of Kevin O’Leary. If you want to read about some more companies in the stock portfolio of Kevin O’Leary, go directly to Kevin O’Leary’s Stock Portfolio: 5 Stock Picks for 2023.
Kevin O’Leary, one of the most well-known finance personalities on television, has made a number of significant stock investments over the years. As the Chairman of O’Shares Investment Advisors, O’Leary contends that stocks in your portfolio should be high-quality businesses with sound balance sheets and great financial performance. Secondly, he believes that a portfolio should be diversified so as to include a variety of market sectors. The last factor, and perhaps the most important, is the need for dividend payments by the firms he is considering investing in.
With that being said, the economic crisis heightened by the coronavirus contagion during the last two years and the spillover effects of it across the globe has led to financial markets being more volatile in 2023 compared to pre-pandemic years. Obviously rising interest rates contribute to this as well. Because it is unclear how the economy will respond to increasing interest rates, stocks are falling. However, O’Leary, in an interview with CNBC, said he firmly believes in retaining stocks during a time of rising interest rates.
“Even as rates go up, equities are the place to be because fixed income gets hurt a lot more,” he said. This is greatly evident in the kinds of stocks he invests in. According to the investment mogul, businesses that have control over their prices provide good investment opportunities. In light of the current situation, O’Leary seeks out businesses that may raise prices without facing too much opposition from consumers.
“Where you want to be in equities, particularly when rates start taking up, is in companies that have pricing power,” O’Leary added. “In other words, their goods and services are necessities for people, so they are willing to take a small increase in price, sometimes a larger one, as rates go up.” The companies that satisfy this criterion are the ones that belong to the healthcare sector.
“Right now, healthcare looks really good and also consumer cyclicals look very good,” he said. O’Leary further suggests that in times of inflation, investors should focus on businesses that provide goods and services that people still need, particularly “what they eat” and “what they drive.”
Another area in which O’Leary thinks people can retain stocks is the energy sector. During the ongoing period of high inflation, the costs of fueling your car, and heating your office or home have become all the pricier. Subsequently, for the past couple of years energy stocks have generated above-average gains. Therefore, the energy sector, O’Leary maintains, is a stable market to invest your stocks in, despite the recent drop in oil prices.
Our Methodology
Here is a quick look at Kevin O’Leary’s top 10 picks for stock investments in 2023 that describe not only his philosophy but also provides valuable information on asset management. O’Leary often typically invests in equities of large, successful companies with solid balance sheets and yearly dividend increases that are consistent. The holdings listed below were picked from the ALPS O’Shares U.S. Quality Dividend ETF Shares (BATS:OUSA).
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Kevin O’Leary’s Stock Portfolio: Stock Picks for 2023
10. McDonald’s Corporation (NYSE:MCD)
McDonald’s Corporation (NYSE:MCD) is a fairly resilient business. Its large global footprint, extensive restaurant network, well-reputed brand image, and real estate holdings provide it a competitive advantage. In fact, the company’s success has been demonstrated by its superior track record compared to a wide range of rivals.
With approximately 40,000 stores across more than 100 countries, McDonald’s Corporation (NYSE:MCD) is the top global retailer of food service. Around 93% of the stores are independently owned and run. The business is considered a Dividend Aristocrat since it has increased its dividend every year since it paid its first dividend in 1976.
McDonald’s Corporation (NYSE:MCD) released its full-year 2022 results and Q4 2022 results on January 31st, 2023. A 5% increase in system-wide sales was offset by currency headwinds to result in total revenue for the quarter of $5,926.5 million, a (1%) decline from $6,009.1 million compared to Q4 2021. In contrast to restaurants with franchises, company-owned stores had a decline in revenue (13%). In comparison to comparable periods, operating costs were lower, resulting in a 19% increase in earnings to $2.59 per share.
Geographically, revenues rose by 10.3% in the US, 12.6% internationally, and 16.5% internationally in markets with developmental licenses. Due to COVID-19 restrictions, growth was robust in the UK, France, Germany, Japan, and Brazil and weak in China. Diluted GAAP earnings per share fell to $8.33 for the entire year, and revenue decreased to $23.18 billion.
Because of its value proposition, McDonald’s Corporation (NYSE:MCD) is doing better than many of its competitors during a period of rising inflation. COVID-19 in China, the conflict in Ukraine, and inflation are obstacles, nevertheless. It is due to such reasons that Kevin O’Leary has made investments in the company.
9. T. Rowe Price Group, Inc. (NADAQ:TROW)
One of the biggest publicly traded asset managers is T. Rowe Price Group, Inc. (NADAQ:TROW), which was established in 1937 and has its headquarters in Baltimore, Maryland. For individual and institutional investors, retirement plans, and financial intermediaries, the organization offers a wide selection of mutual funds, sub-advisory services, and separate account administration.
T. Rowe Price Group, Inc. (NADAQ:TROW) released its fourth quarter and annual results for the period ending December 31, 2022, on January 26th, 2023. Revenue decreased by 22.4% to $1.52 billion for the quarter, $10 million less than analysts had predicted. Adjusted earnings-per-share of $1.74 was $0.03 more than expectations while being down from $3.17 in the previous year. Revenue decreased by 15.4% to $6.5 billion for the year, while adjusted earnings-per-share decreased to $8.02 from $12.75 in 2021.
Assets under management (AUM) fell 12.6% for the quarter to $1.27 trillion. Net client outflows of $17.1 billion, net payouts of $2.5 billion not reinvested, client transfers of $2.1 billion, and market depreciation were the causes of this decline. Operational costs reached $1.3 billion, up 15.6% annually and 25.4% sequentially.
For many years, T. Rowe Price Group, Inc. (NADAQ:TROW) has been a fantastic company with excellent operating metrics. The company’s performance throughout the quarter was once again impacted by market volatility. However, the sector as a whole continues to be hampered by the emphasis on lower fees.
8. Apple Inc. (NASDAQ:AAPL)
Apple Inc. (NASDAQ:AAPL) has been one of the pioneers of revolutionizing the way technology operates ever since it launched the Macintosh in 1984. The tech corporation currently creates, produces, and markets goods like iPhones, iPads, Macs, Apple Watches, and Apple TVs. Apple also operates a services division that offers subscriptions, apps, and music.
The company released its Q1 fiscal year 2023 results on February 2, 2023, covering the period ending December 31, 2022 (Apple’s fiscal year concludes on the last Saturday in September). Apple’s revenue for the period was $117.154 billion, a 5.5% decrease as compared to Q1 2022.
The metrics indicate that product sales decreased by 7.7%, with an 8.2% drop in iPhone sales accounting for 56% of all sales. Services accounted for 17.7% of total revenues in the quarter, up 6.4% to $20.8 billion. Compared to $34.630 billion or $2.10 per share in Q1 2022, net income was $29.998 billion, or $1.88 per share.
7. Pfizer Inc. (NYSE:PFE)
One of the biggest global pharmaceutical companies, Pfizer Inc. (NYSE:PFE) focuses on immunizations and prescription medications. Among the most-selling drugs produced by the company are Eliquis, Ibrance, Prevnar, Enebrel (international), Sutent, Xtandi, Vyndaqel/Vyndamax, Inlyta, Xeljanz, Plaxlovid, and Comiranty.
Pfizer released its fourth-quarter results on January 31, 2023, along with its full-year results. On a yearly basis, overall revenue increased by 2% to $24,290M from $23,838M, and adjusted diluted profits per share increased by 45% to $1.14 from $0.79. In comparison quarters, diluted GAAP earnings per share increased by 48% to $0.87 from $0.59.
Because of considerable R&D and acquisitions, Pfizer’s present product range is anticipated to deliver top line and bottom-line growth through 2028. Inlyta (renal cell cancer), Prevnar family (pneumococcal vaccine), Comirnaty (COVID-19 vaccine), Vyndaqel/Vyndamax (transthyretin stabilizers), Eliquis (cardiovascular), Ibrance (oncology), Xtandi (oncology), Hospital Products, and Biosimilars are all reporting strong sales growth. Paxlovid, a recently released antiviral, is expanding quickly.
Increased sales for approved indications, extensions, R&D, and bolt-on acquisitions will all contribute to future growth. Revenue from COVID will decrease in 2023. However, Pfizer Inc. (NYSE:PFE) wisely boosted its pipeline by increasing R&D and acquisitions. This high-quality stock may appeal to investors, and the business is rich with cash.
6. Marsh & McLennan Companies, Inc. (NYSE:MMC)
A multinational holding firm for professional services, Marsh & McLennan Companies, Inc. (NYSE:MMC) is involved in risk, strategy, and human resources. Marsh (insurance broker and risk management), Guy Carpenter (reinsurance and capital strategies), Mercer (human resources and consulting), and Oliver Wyman are the company’s four primary global operations (strategy, economic, and brand consulting).
Almost 130 nations have customers for the company, and there are 86,000 employees worldwide. The company’s yearly revenue is close to $20 billion.
On January 26th, 2023, Marsh & McLennan Companies, Inc. (NYSE:MMC) released its fourth quarter and full year 2022 results. The quarter’s total sales fell by 2% from the prior year to $5.0 billion. Adjusted EPS grew to $1.47 for the quarter from $1.36 in Q4 2021, and adjusted operating income improved 13% year over year to $1.0 billion.
Marsh & McLennan’s total revenue for 2022 increased by 5% from 2021 to $20.7 billion. Adjusted operating income increased by 11% to $4.8 billion for 2022, while adjusted EPS increased by 11% to $6.85 from $6.17 for 2021. In 2022, the business spent $1.9 billion on the repurchase of about 12.2 million shares of common stock. MMC had $1.4 billion in cash and cash equivalents at the end of the quarter.
Going forward, it is anticipated that Marsh & McLennan Companies, Inc. (NYSE:MMC) will generate annualized total returns of 7.1% by 2028. The firm is expected to keep expanding.
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Disclosure. None. Kevin O’Leary’s Stock Portfolio: 10 Stock Picks for 2023 is originally published on Insider Monkey.
