5 ‘Strong Buy’ Blue Chip Dividend Stocks Still Make Up a Stunning 72% of Warren Buffett’s Portfolio
If any investor has stood the proverbial test of time, it’s Warren Buffett, and with good reason. For years the “Oracle of Omaha” has had a rock star-like presence in the investing world, and his annual Berkshire Hathaway shareholders meeting draws literally thousands of loyal fans that are investors. Known for his long buy-and-hold strategies, and his massive portfolio of public and private holdings, he remains one of the preeminent investors in the entire world.
One of the reasons for Berkshire Hathaway’s stunning success over the years is that Warren Buffett and his right-hand man Charlie Munger have always tried to stay with stock ideas they understand, and that has proven to be a winning hand. In addition, many of the companies in the Berkshire Hathaway portfolio pay solid and reliable dividends.
Long-time investors and Buffett mavens are familiar with his quote that “Our favorite holding period [for an S&P 500 stock] is forever”, so it’s not really surprising to report that for all of the success and stature Berkshire Hathaway has in the investment world, that 5 top companies make up well over 70% of the fund’s total holdings. While much more concentrated than most portfolio managers would ever consider, the strategy has worked for Berkshire Hathaway investors for years, and likely will in the future.
All five of these top companies are rated Buy, and all pay reliable dividends. With that noted, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
American Express
This stock has backed up recently and is offering the best entry point since late last year despite posting solid second-quarter results. American Express Company (NYSE: AXP) provides charge and credit payment card products, and travel-related services worldwide.
The company operates through three segments: Global Consumer Services Group, Global Commercial Services, and Global Merchant and Network Services. Its products and services include payment and financing products; network services; accounts payable expense management products and services; and travel and lifestyle services.
The company’s products and services also comprise merchant acquisition and processing, servicing and settlement, point-of-sale marketing, information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs. It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, third-party vendors and business partners, direct mail, telephone, in-house sales teams, and direct response advertising.
Shareholders are currently paid a 1.41% dividend. Morgan Stanley has an Overweight rating on the financial giant and a $188 price target. The Wall Street consensus target for the stock is posted at $183.87. The shares closed trading on Tuesday at $174.64.
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