The Wealthy Owl's Dividend Growth Portfolio
Companies
Hosted on Stock Card
JP Morgan
NYSE: JPM
Powerhouse banker investing substantially in AI
Bought 15 shares on 1/10/2025 at $239.87
JP Morgan is a powerhouse in the U.S. banking industry, leading the way across investment banking, commercial banking, credit cards, retail banking, and asset and wealth management - setting the standard for dominance in every category.
JPM is transforming the financial services industry:
-
Tech & AI Pioneer: They're not just dabbling in technology and AI - they're leading the charge with significant investments and a head start
-
Future Growth: The operational enhancements and business expansion driven by AI will boost their cash flow, likely setting the stage for faster dividend growth
Read JP Morgan deep dive from the Wealthy Owl
Taiwan Semiconductor Corp.
NYSE: TSM
Invest in the most important product of our time
Bought 40 shares on 2/25/2022 at $112.33
Taiwan Semiconductor Manufacturing Co. (TSMC) provides investors with a rare combination of growth and dividend income that itself should grow over the years. There are lots of tailwinds as the world's insatiable appetite for chips will only grow as our world becomes more and more digital. There is no company better positioned to ride this wave than TSMC, their process power, wide moat and deep relationships with the world's most important technology companies solidifies their number one position in this market oligopoly. TSMC has paid a dividend each year from its first distribution in 2004. Their annual dividend per share has increased for six consecutive years, growing at an annualized rate of 13% over the last five.
Read the TSM deep dive from the Wealthy Owl.
Read TSMC deep dive from the Wealthy Owl
Houlihan Lokey Inc.
NYSE: HLI
Generous investment bank has raised its dividend consistently since going public
Bought 50 shares on 2/25/2022 at $102.96
One of the oldest independent investment banks in the market, Houlihan Lokey (HLI) has a much shorter history as a public company. While the company only went public in 2015, all its key numbers have grown. They've grown revenues 17% per year and net income by 28% for the last five years. It’s amazing performance since going public seems to be a continuation of its steady growth over its 50-year existence. The company has demonstrated its resilience over the years, where some of their competitors were sunk due to several economic crises over this period, not HLI. It has flourished over the years as a result of its quality, long-tenured management team, integrity, and industry leading expertise. HLI has been recognized as the Top U.S. Mergers & Acquisitions Advisor and Top Global Restructuring Advisor, among other awards over the years. They beat out competitors such as Goldman Sachs, JP Morgan and Morgan Stanley for these accolades. Their stock has also outperformed, beating the investment bank industry annualized return over five years by 13% pts. This relatively unknown investment bank has delivered big time for its investors since it went public seven years ago. Don’t let their shorter public history dissuade you from what is a very well managed and long tenured business that pays an aggressively growing dividend.
Read HLI deep dive from the Wealthy Owl
ABB
OTCPK:ABBNY
Fusing dividend growth with AI and robotics innovation
Bought 150 shares on 04/05/2024 at $46.37
ABB was founded 130 years ago to take advantage of a new technology called electricity. Today, we stand on the cusp of a similar technological revolution with Generative Artificial Intelligence (GenAI).One of the downstream sectors that GenAI will likely reshape is a big part of my investing thesis for ABB, its extensive robotics and automation product portfolio. The optionality on ABB's business that GenAI creates is not exclusive to its robotics and automation business. ABB runs a diversified business that includes a line of electrification products, solutions and services ($14.6B revenue) and portfolio of drives, electric motors, generators, and motion controls ($7.8B revenue). ABB stands to benefit from applying GenAI across all business lines to grow revenue and expand margins. While this optionality is exciting, don't expect premium revenue growth from ABB. The main course of the ABB investing thesis is its commitment to returning capital to shareholders. The GenAI optionality will give ABB fuel over the next decade to continue on its longstanding tradition of taking care of its shareholders through buybacks and dividends.
Read ABB deep dive from the Wealthy Owl
Lowe's
NYSE: LOW
Lowe's wins with retail and tech excellence
Bought 15 shares on 1/10/2025 at $247.90
Lowe's ranks as the world's second-largest home improvement retailer. By consistently emphasizing core retail principles—such as excellence in merchandising, operational efficiency, supply chain enhancements, and customer engagement—Lowe's has effectively managed expenses while preserving its low-cost status. The company keeps a portion of the cost savings it realizes and shares the remainder with its customers by offering everyday low prices.
Read Lowe's deep dive from the Wealthy Owl
Abbvie
NYSE: ABBV
Faced with top drug falling off patent cliff, Abbvie readies its arsenal to find a replacement
Bought 30 shares on 2/25/2022 at $149.54
AbbVie is a biopharmaceutical company that originated as a spin-off from Abbot in 2013. The company focuses on both life-threatening diseases and chronic conditions such as cancer and rheumatoid arthritis. The company's top drug, Humira, represents half of the company's profits and its patent is set to expire.
The company has several emerging drugs that could replace Humira as its top drug, its next-generation immunology drugs, potential cancer blockbuster drug Imbruvica and several other late-stage cancer drugs that are showing promise. However, it is still too early in the game for these upcoming drugs. There is risk that their potential will not fully materialize, leaving the company facing the prospect that the drug responsible for more than 50% of their profits will be falling off its patent cliff soon with no adequate replacement. They are not sitting on their hands, and with its generous dividend yield and clear commitment to increasing its dividend, AbbVie offers some stock price upside and growing dividend income.
Blackstone
NYSE: BX
Proven performer that prioritizes shareholder return
Bought 35 shares on 2/25/2022 at $128.78
Blackstone is the world’s largest alternative asset management, known as the "go-to firm" for institutional and high-net-worth investors looking for exposure to unconventional asset classes. The firm uses its investing process, scale and the ability to easily move pools of funds from one asset class to another opportunistically.
Blackstone has built an amazing business over the last 36 years, innovating from its start up days as purely a private equity investment firm to new asset specialties such as real estate, hedge funds, credit, secondary funds of funds, and multi-asset class strategies. The firm’s unique culture built by founder CEO and investing legend Stephen Schwarzman, scale and steady inflow of capital puts it in a unique position to deliver market beating returns for customers. Blackstone’s investment track record has built a nice virtuous cycle that reinforces its strengths, which should continue well into the future.
Nextera Energy Inc.
NYSE: NEE
Energy provider well positioned for AI boom
Bought 40 shares on 1/10/2025 at $67.38
Nextera Energy is good for retail investors seeking exposure to the growing renewable energy sector, as the company is well-positioned for growth with its world-leading renewable energy generation business and its regulated utility business that benefits from constructive regulation in Florida.
Nextera Energy is investing in a diversified portfolio of energy solutions to capitalize on the increasing electricity needs of data centers - They have a 300 GW pipeline of renewable projects, with data centers accounting for 18% of their backlog. - They are doing it quickly - They successfully deployed over 1 GW of co-located battery storage in California to meet the needs of data centers within a short timeframe of approximately 24 months.
Read Nextera Energy deep dive from the Wealthy Owl
Equinix
NASDAQ: EQIX
A Smart Dividend Play in the AI Era
Bought 10 shares on 5/24/2024 at $766.12
With the global economy rapidly adopting generative AI (GenAI), the demand for robust digital infrastructure is set to soar. Equinix (NASDAQ:EQIX), a global provider of data center and digital infrastructure solutions, is set to play a pivotal role in supporting the rollout and scaling of GenAI technology. The Real Estate Investment Trust's (REIT) positioning in the growing AI ecosystem as a picks and shovels provider not only promises significant growth potential but also offers investors the appeal of a sustainable and fast growing dividend.
Equinix is well positioned to shine in both phases of GenAI model training and inference. The company's large-scale xScale data centers are ideal for the intensive computational needs of AI training. For the inference phase, Equinix’s IBX retail data centers are optimally located near end-users, while also providing the necessary robust connectivity services.
Equinix represents a compelling investment opportunity due to its strategic role in supporting the expansive growth of generative AI technology, a robust infrastructure that enables rapid scaling and efficiency, and a solid financial foundation promising sustained dividend growth amidst AI-driven market demands.
Read more about the Wealthy Owl's take on Equinix
Caterpillar
NYSE: CAT
Strong brand and extensive dealer network solidifies iconic status for world's largest heavy equipment manufacturer
Bought 30 shares on 2/25/2022 at $187.06
The iconic Caterpillar is the world’s largest heavy equipment manufacturers with over 15% market share as of 2020. Caterpillar is poised to benefit from the $1.2 trillion infrastructure bill recently passed by U.S. lawmakers for roads, bridges and other major infrastructure projects.
The company’s strategy focuses on operational excellence, expanded offerings and growing services thru digital-enabled solutions that help deepen relationships with customers.
While not as mature as other heavy equipment manufacturer pick John Deere, Caterpillar is building its digital muscle. More than 1 million of its assets are connected to its digital platform (out of 2 million assets in the field). This install base is the foundation for future services growth, which they project to double to $28B by 2026.
The strength of its brand and extensive dealer network has helped solidified Caterpillar as the market leader for heavy machinery equipment. Caterpillar revenue ebbs and flows with demand from the construction, mining, and energy markets, leading to volatile revenue and operating profits over the years. Its operational focus and emerging recurring service revenue growth should help smooth out the volatility of future results.
Texas Instruments
NASDAQ: TXN
Free cash flow zealot dominating unsexy sub-sector of semiconductor industry
Bought 25 shares on 01/30/2023 at $173.49
Texas Instruments (TI) is a global semiconductor company that designs, manufactures, and sells analog and embedded processing chips mainly to industrial, automotive and personal electronics customers. With a 70+ year history of innovation, TI were pioneers in the transition of the electronics industry from vacuum tubes to transistors and now to integrated circuits.
Despite the ubiquitous digital chip stealing all the headlines because of their processing power and use in everything from fridges to phones to airplanes, analog chips are a growing opportunity. Given analog chips represent 77% of TI’s total revenue, this is a good thing. In addition to signal processing use cases, every electronic product requires analog chips to provide the power to run. Every time a new phone gets built or a new “thing” gets electrified so it can connect to the Internet, you better believe it contains analog chips.
TI has built their enviable market position thru vertical integration, ultra low cost 300 mm silicon wafter manufacturing, scale, direct to consumer (DTC) muscle (in 2019 one-third of TI business was DTC, in 2021 this rose to 70%), and diversification of products (TI has over 80,000 SKUs available for 100,000+ customers). TI, and its shareholders, enjoy the benefits of a very attractive market. The analog industry features low risk of inventory obsolescence due to long product lifecycles, lower capital requirements as the manufacturing equipment lasts for decades, high switching costs for customers who have designed chips into their devices, pricing power retained by suppliers, and lower R&D costs than digital chip manufacturers. The result is expanding gross margins that reached 67.5% in 2021 from 52% in 2013, and 12% annual growth of free cash flow per share from 2004-2021.
As the leader of the attractive analog chip industry and its religious focus on growing free cash flow for shareholders, Texas Instruments (TI) is a dependable dividend payer. TI appears to be in a great position to continue to deliver for shareholders, just like it has in the past. TI has an annualized total return of 13.5% for shareholders.
Read more about the Wealthy Owl's take on Texas Instruments
Deere & Co.
NYSE: DE
The Apple of the agriculture business
Bought 15 shares on 03/01/2022 at $346.98
Founded in the mid-19th century, the original John Deere built the steel plow and transformed farming. Over 180 years later, the company bearing his name is now undergoing a digital transformation that is revolutionizing the same industry. Deere is the world’s leading manufacturer of agricultural equipment.
John Deere has built a platform business, much like Apple achieved with the iPhone, but for the agriculture business. They have an integrated offering of world class hardware and software, locking customers into the Deere ecosystem with a consistent user interface and new software advances such as AI, computer vision and autonomous. John Deere can also unlock the value of their customer’s farm related data by using machine learning and other analytical technologies to offer insights and custom guidance, such as recommendations for new fertilizer seed and chemical treatments. To create network effects around their platform, Deere has invited 3rd parties to build on its platform to better serve customers with agriculture related apps and services. To continue the Apple analogy, its like an Appstore for the agriculture industry.
In addition to their technology advantages Deere has other ways to differentiate in an oligopoly-based market, including being one of the world’s most valuable brands and its vast worldwide dealer network.
John Deere has close to a two centuries worth innovation track record. With a lower yield and inconsistent annual dividend raises, John Deere is closer to a growth stock than dividend grower. However, the combination of growth and a steady dividend make it attractive.
Blackrock
NYSE: BLK
Product diversification helps protect Blackrock from broad market risk
Bought 1 shares on 03/01/2022 at $750.87
BlackRock is one of the world’s largest asset managers with $7.8 trillion in Assets Under Management (AUM). BlackRock generates half of its annual revenue from passive investing products like Exchange Traded Funds (ETF). BlackRock is the company behind the popular iShares brand of ETFs. BlackRock offers both passive and active investing products, in equities, fixed income, currency, and commodity, among others. This diversification helps protect BlackRock more from broad market risks, relative to its peers. Although it’s expected asset management firms face headwinds in terms of a likely stock market stagnation on the horizon (reducing assets under management fees), BlackRock is best positioned to weather any future storms. Blackrock has raised its dividend for 18 consecutive years, growing it 13% over the last 5 years.