Cathie Wood has recently become a household name as a rock star investor. Through her ARK Investment Management firm, she runs a number of ETFs.
These ETFs tend to heavily focus on innovation. The high-growth stocks that she often concentrates on can lead to huge home runs. But history has taught us that these big swings can also sometimes lead to strikeouts.
What if you could take on some of that Cathie Wood spirit without risking too many strikeouts?
What if you could take some doubles and triples instead, and also collect safe, growing passive dividend income along the way?
Well, some of Cathie Wood’s ETFs have inside of them the same kind of high-quality dividend growth stocks we regularly feature here. And we can selectively sort through some of these stocks to pick out the ones that make the most sense for our portfolios and investing objectives.
This could allow you to ride some of that ARK wave without taking on all of the risk. I want to share with you three high-quality dividend growth stocks that Cathie Wood has bet on.
Let’s dig in.
I’m using the information in this article based on three different ARK ETF holdings as of January 31, 2021. Those three ETFs are ARK Fintech Innovation ETF (ARKF), ARK Genomic Revolution Multi-Sector ETF (ARKG), and ARK Autonomous Technology & Robotics ETF (ARKQ).
Stock #1: Apple Inc (AAPL)
The first Cathie Wood ETF I want to explore with you is ARK Fintech Innovation ETF (ARKF).
This ETF contains within it one of the all-time best dividend growth stocks: Apple Inc (AAPL).
Apple offers one of the safest dividends out there. While the stock yields less than 1%, the dividend is growing at nearly a double-digit-rate. The company has increased its dividend for nine consecutive years. That dividend growth and safety is supported by the incredible economic output of one of the best businesses the world has ever seen.
We’ve done a number of videos on Apple highlighting what a fantastic long-term investment it’s been and will continue to be. The interesting thing about Apple is that owning this stock doesn’t just give you the chance to invest alongside Cathie Wood.
It also gives you the chance to invest alongside Warren Buffett, who’s arguably the greatest investor to ever live. Buffett has bet big on Apple, with his conglomerate holding company, Berkshire Hathaway, owning more than $100 billion in Apple stock.
I view Apple as a must-own stock for serious dividend growth investors.
Stock #2: Bristol-Myers Squibb Co (BMY)
The second Cathie Wood ETF I want to bring to your attention is ARK Genomic Revolution Multi-Sector ETF (ARKG).
This ETF sports an investment in Bristol-Myers Squibb Co (BMY).
Bristol-Myers Squibb is a great biopharmaceutical business, and the stock offers a market-beating 3.2% yield right now.
Also, the company recently increased its dividend by almost 9%, making for a great combination of yield and growth.
We put together a video on Bristol-Myers Squibb back in January highlighting what a long-term opportunity it is.
This remains an undervalued, higher-yielding, high-quality dividend growth stock. Yet again, this is both a Cathie Wood and Warren Buffett play. That’s like a buy-one-get-one-free deal. Both investors have scooped up shares in Bristol-Myers Squibb, with Buffett’s firm owning about $2 billion in stock.
If your portfolio has room for a biopharmaceutical company that has the blessing of both Wood and Buffett, make sure to take a look at Bristol-Myers Squibb.
Stock #3: Caterpillar Inc (CAT)
The third Cathie Wood ETF I want to talk about is ARK Autonomous Technology & Robotics ETF (ARKQ).
Through this fund, Cathie Wood has invested in Caterpillar Inc (CAT).
Caterpillar’s bread and butter is in heavy machinery, but don’t let that fool you. Those machines are quickly becoming more and more automated and robotic in their build and use, which obviously attracted the attention of Cathie Wood.
Caterpillar’s yield of 1.9% won’t knock you dead, but the dividend has grown for 27 consecutive years. Their most recent dividend increase came in at almost 20%. That’ll make a dividend growth investor smile. And I’m sure Cathie Wood is loving it, too. Even an investor usually going after high-flying growth stocks has to enjoy more passive cash flow. But it ain’t just cash flow – the stock’s a rocket.
This stock has been on an absolute tear. It’s up almost 50% over just the last six months.
Caterpillar certainly doesn’t look cheap here. But if you want a high-quality dividend growth stock that’s investing in automation and also has Cathie Wood on board, this could be just the name for you.
— 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.