Warren Buffett, recognized as one of the world’s greatest investors, has consistently demonstrated his ability to identify and invest in companies with long-term growth potential. He is renowned for his commitment to high-value stocks and holding them for the long term.Thank you for reading this post, don't forget to subscribe!
On this point, Buffett once said, “Forget what you know about buying reasonable businesses at wonderful prices; instead, buy wonderful businesses at reasonable prices”.
among Berkshire Hathaway’s (NYSE:BRK) Holdings, two giants stand out: Apple Inc. (NASDAQ: AAPL) and Coca-Cola Company (NYSE:KO). These two iconic companies have not only provided significant capital appreciation to Berkshire Hathaway, but are also a huge source of annual dividend income, contributing $1.6 billion to Berkshire Hathaway’s coffers every year.
Apple Inc: a useful investment
Berkshire Hathaway’s investment in Apple is a testament to Buffett’s ability to recognize enduring value. In 2016, Berkshire Hathaway initiated a stake in Apple, and it has since become one of the group’s largest holdings.
And it’s not like it was cheap. Berkshire has sunk $36 billion into its Apple investment over the past few years, but it’s certainly paid off. The value of the company’s stake today is more than $162 billion.
People know Apple for its visionary products, but it’s also a dividend-paying company. The technology giant has a history of rewarding its shareholders with consistent dividend payments. Berkshire Hathaway’s substantial ownership stake in Apple means dividends of just $900 million per year.
Coca-Cola: The Classic Dividend Dynamo
Coca-Cola is another cornerstone of Berkshire Hathaway’s investment portfolio. The beverage giant has a tradition of paying strong dividends. Buffett held an important position in Coca-Cola for years, which has contributed significantly to its annual dividend income. The steady cash flow from Coca-Cola’s dividends adds stability to Berkshire Hathaway’s investment portfolio.
Today, Berkshire’s 400 million shares are worth more than $21 billion and provide dividends worth $736 million.
These two investments, combined with 3 other dividend powerhouses – Occidental Petroleum (NYSE:OXY), beam (NYSE:CVX), and Bank of America (NYSE:BAC) – Provide a whopping $4.31 billion a year in dividends for Berkshire Hathaway. It’s clear that dividends can and should be an important part of any investment portfolio.
However, not all dividend stocks are created equal and choosing the right stock is a difficult task for many retail investors. One option is to invest in dividend-focused funds like Innovative Portfolio. Dividend Performer ETF (BATS:IPDP). By choosing to go with ETFs, investors leave the challenging analysis and market research to fund managers and their teams of experts.
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This article Warren Buffett’s Billion-Dollar Dividend Pair: Apple and Coca-Cola’s Berkshire Hathaway Earn More Than $1.6 Billion in Annual Income was originally published on Benzinga.com.
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