5 Best ETFs to Diversify Your Portfolio and Avoid Risks

4. iShares Core Dividend Growth ETF (NYSE:DGRO)

iShares Core Dividend Growth ETF (NYSE:DGRO) invests in companies that have a history of sustained dividend growth and belong to diversified industries. The fund seeks to track the performance of the Morningstar US Dividend Growth Index. iShares Core Dividend Growth ETF (NYSE:DGRO) has 413 stocks in its portfolio, and offers a 30 day SEC yield of 2.30% as of August 31. The ETF is relatively affordable, with an expense ratio of 0.08%. 

Johnson & Johnson (NYSE:JNJ) is one of the top holdings of iShares Core Dividend Growth ETF (NYSE:DGRO). Johnson & Johnson (NYSE:JNJ), the American multinational healthcare giant, announced on September 14 that its board has authorized repurchasing up to $5 billion worth of common stock, citing robust cash flow and lowest level of net debt in five years. 

According to Insider Monkey’s Q2 data, Johnson & Johnson (NYSE:JNJ) was part of 83 hedge fund portfolios, with collective stakes worth $6.7 billion. Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with 6.5 million shares worth $1.16 billion. 

Here is what Mayar Capital has to say about Johnson & Johnson (NYSE:JNJ) in its Q2 2022 investor letter:

“J&J is currently our largest position and a long-standing holding. The majority of the group’s sales comes from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.

Here’s how JNJ makes and spends a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics.

To make that dollar, however, JNJ typically spends about 25 cents to make the products themselves and another 27 cents on marketing and general administrative functions. This leaves JNJ with about 48 cents on the dollar in profit…” (Click here to see the full text)