The other day, I revealed why Warren Buffett is so success. So, if you want to emulate Buffett’s successful, just buy companies that pay dividends and buy back their stock. Did you know financials almost make up 50% of Berkshire Hathaway’s portfolio. So if you really want to emulate Buffett’s success, just buy financial stocks.
Berkshire’s 8 biggest
positions in financial stocks going back to the third quarter were:
Bank of America Corp.
(BAC), $25 billion,
American Express Co.
(AXP), $19 billon,
Wells Fargo & Co.
(WFC), $18 billion,
U.S. Bancorp (USB), $6.7
JPMorgan Chase & Co.
(JPM), $6.2 billion,
Goldman Sachs Group Inc.
(GS), $3.6 billion,
Bank of New York Mellon
Corp. (BK), $3.4 billion,
Moody’s Corp. (MCO), $5.1
The word “dividend” tends
to have this calm, soothing effect on investors because you know the company
offering dividend has a profitable and viable business model so in good times
and bad times, you can sleep better at night and dividends act like compound
interests if reinvested to grow ones portfolio exponentially. For example, Wells Fargo and Bank of America
are set to bring in more than $1.5 billion in dividend income for Buffett over
the next year. That $1.5 billion is almost
2% of his net worth.
Because I’m on this dividend
discovery journey, highest dividend yielding companies within Buffett’s
portfolio are the following:
Corporation (8.32% yield), together with its subsidiaries, engages in the
acquisition, exploration, and development of oil and gas properties in the
United States and internationally. The company operates through three segments:
Oil and Gas, Chemical, and Midstream and Marketing.
The Kraft Heinz Company (5.16%
forward yield) manufactures and markets food and beverage products in the
United States, Canada, Europe, the Middle East, and Africa. Its products
include condiments and sauces, cheese and dairy, meals, meats, refreshment
beverages, coffee, and other grocery products, as well as infant and nutrition
General Motors Company (4.30%
forward yield) designs, builds, and sells cars, trucks, crossovers, and
automobile parts worldwide. The company operates through GM North America, GM
International, GM Cruise, and GM Financial. It markets its vehicles primarily
under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, Jiefang, and Wuling
Suncor Energy Inc (4.07% forward
yield). operates as an integrated energy company. The company primarily focuses
on developing petroleum resource basins in Canada’s Athabasca oil sands;
explores, acquires, develops, produces, and markets crude oil and natural gas
in Canada and internationally; transports and refines crude oil; markets
petroleum and petrochemical products primarily in Canada.
Wells Fargo & Company
(3.83% forward yield), a diversified financial services company, provides
retail, commercial, and corporate banking services to individuals, businesses,
and institutions. It operates through three segments: Community Banking,
Wholesale Banking, and Wealth and Investment Management.
STORE Capital Corporation
(3.50% forward yield) is an internally managed net-lease real estate investment
trust, or REIT, that is the leader in the acquisition, investment and
management of Single Tenant Operational Real Estate
United Parcel Service,
Inc (3.34% forward yield) provides letter and package delivery, specialized
transportation, logistics, and financial services. It operates through three
segments: U.S. Domestic Package, International Package, and Supply Chain &
Phillips 66 (3.20%
forward yield) operates as an energy manufacturing and logistics company. It
operates through four segments: Midstream, Chemicals, Refining, and Marketing
and Specialties (M&S).
Restaurant Brands International
Inc (3.05% forward yield). owns, operates, and franchises quick service
restaurants under the Tim Hortons (TH), Burger King (BK), and Popeyes (PLK)
The PNC Financial
Services Group, Inc (3.02% forward yield). operates as a diversified financial
services company in the United States. The Retail Banking segment offers
deposit, lending, brokerage, insurance, and investment and cash management
services to consumer and small business customers through a network of branches. The Corporate & Institutional Banking
segment provides secured and unsecured loans, letters of credit, equipment
leases, global trade services, as well as foreign exchange, derivative, etc.
The Coca-Cola Company (2.95%
forward yield)., a beverage company, manufactures and distributes various
nonalcoholic beverages worldwide. The company provides sparkling soft drinks;
water, enhanced water, and sports drinks; juice, dairy, and plant based
beverages; teas and coffees; and energy drinks.
Dividend stocks offer a number of advantages to investors, but I would say the number one reason is best said by Buffett himself.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.