3 “All-In” Stocks If You’re Not Diversified

Let me clear something up right at the start at this article.

I’m biased. I fully believe in having a portfolio that’s broadly diversified. I’m talking dozens of high-quality stocks at a minimum. Preferably hundreds.

In my mind, broad diversification is something that easily passes a cost-benefit analysis. That said, it’s an individual call. And a lot of investors out there simply like the idea of being concentrated, no matter what I say.

Well, what if you could have it both ways? What if you could be both concentrated and diversified?

There are some “all-in” high-quality dividend growth stocks out there that can give you this. They provide some yield and the safe, growing passive dividend income we’re all after. And they’re “world beaters” that cater to nearly all aspects of their respective industries.

These companies are so big and so diversified, they’re almost like index funds all by themselves.

Today, I want to tell you about three all-in dividend growth stocks that can allow for both concentration and diversification.

Ready? Let’s dig in.

The first all-in dividend growth stock I want to tell you about is Apple (AAPL). Apple is a massive and dominant tech company that touches just about every facet of technology.

Hardware. Software. Smartphones. Computers. Tablets. Wearables. Payments. Health. Music. Games. Streaming. I could go on and on. If it’s tech, Apple is probably involved. And when Apple does get involved, they end up doing it better than just about anyone else.

Apple is so diversified and big, it’s almost like its own tech fund.

We’re talking about a market cap of $2.4 trillion dollars for Apple. That’s bigger than the market cap of the entire ASX – the Australian Securities Exchange. It’s tough to come up with superlatives that properly describe Apple. But it’s kind of gone beyond a simple company at this point. Their annual revenue, which recently eclipsed $300 billion, is greater than the GDP of a lot of countries out there.

Holding Apple is holding a major part of the S&P 500.

If you were to buy the S&P 500, you’d be, to a large extent, buying Apple. The S&P 500 is market-cap weighted. Apple is the largest stock in the entire index, comprising about 6% of it. Apple’s yield of 0.6% isn’t super impressive, but this is a dividend growth stock – and its dividend continues to grow like clockwork. So if you want an all-in stock that gives you broad product, service, and geographic diversification, which is almost like owning a fund in and of itself, and that gives you a safe, growing dividend that you can sleep well at night with, it’s hard to think of anything that beats Apple.

The second all-in dividend growth stock I want to mention is Johnson & Johnson (JNJ). Johnson & Johnson is a huge and broadly diversified healthcare conglomerate.

Most healthcare companies do one thing well. Johnson & Johnson does multiple things. And they do all of them exceptionally well. They have three very large businesses that, if they were split up, you’d be left with three of the biggest healthcare companies out there. These three businesses are pharmaceuticals, medical devices, and consumer products. Healthcare is a great industry to be in because of the secular growth and non-discretionary demand.

If you want instantaneous healthcare exposure and diversification, all in one stock, Johnson & Johnson is it.

This is a company with a market cap of nearly $450 billion. It’s absolutely titanic. There’s practically no element of healthcare they don’t touch. They sell products in over 170 countries. And the company estimates that they connect with more than a billion people per day. So you’re touching a good chunk of the planet here.

This isn’t just diversification. It’s also quality.

With its AAA-rated credit rating from Standard & Poor’s, this company has a higher rating than the US government – a government that literally prints its own money. They’ve increased their dividend for 59 consecutive years. And the stock even yields a market-beating 2.5%, giving you income to along with that diversification, quality, and growth. I’ve said it before. I’ll say it again. This is my favorite dividend growth stock of all. It’s just such a well-balanced business.

The third all-in dividend growth stock is Procter & Gamble (PG). Procter & Gamble is a consumer staples behemoth.

Think about all of the stuff you use every day. Toothpaste. Tissue paper. Soap. Razors. Shampoo. You name it, Procter & Gamble probably makes it and sells it to you. Apple gives you tech. Johnson & Johnson gives you healthcare. Well, Procter & Gamble gives you consumer products on a silver platter. That platter, by the way, is going to be branded. Because Procter & Gamble controls some of the biggest brands on the planet – think Tide, Charmin, and Downy. Procter & Gamble controls more than 20 billion-dollar brands. Each brand could be their own large company.

If you want to bet on consumers continuing to use everyday products, it’s easy to bet on Procter & Gamble.

There’s nothing difficult here. Nothing to scratch your head about. If you look around your house, you’ll probably find Procter & Gamble products. It’s such a simple-to-understand business model and investment thesis. And because of the recurring demand for these products that get used up routinely, Procter & Gamble’s been able to build a business that just steadily grows larger. That steady growth adds up. Big time. This company’s market cap is $335 billion.

As long as consumers continue to demand basic products, Procter & Gamble should thrive.

This stock gives you one of the safest 2.5% yields you could possibly find. How safe? Well, they’ve not only paid a dividend for decades. They’ve increased this dividend every year for 65 consecutive years. If one were to own only Apple, Johnson & Johnson, and Procter & Gamble, they’d be exposed to and diversified across three huge swaths of the global economy.

I wouldn’t recommend only owning a few stocks. But these are all-in stocks that can provide instantaneous quality and diversification, along with safe, growing dividends and some yield to boot. I regard all of them as some of the very best dividend growth stocks you could possibly have in your portfolio, be it a broadly diversified portfolio or not.

— Jason Fieber

P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.