If any investor has stood the test of time, it is Warren Buffett. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world. His annual Berkshire Hathaway shareholders meeting draws literally thousands of loyal fans who 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 world.
With the market churning this year, up 2% and then back down 2%, and with interest rates rising and inflation raging at the highest levels in 40 years, we thought it important to look at the five stocks that pay solid dividends and make up over 75% of the Berkshire Hathaway portfolio.
The five top stocks that make up the bulk of this portfolio are solid picks for worried investors now. Naturally, all are rated Buy by top firms across Wall Street. It is important to remember, though, that no single analyst report should be used as a sole basis for any buying or selling decision.
American Express
This stock can perform extremely well in a rising interest rate environment and makes up almost 8% of Berkshire Hathaway. American Express Co. (NYSE: AXP) provides charge and credit payment card products and travelelated services worldwide. 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 and 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, midsized 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 receive a 1.33% yield. Morgan Stanley has a $223 price target on American Express stock. The consensus target is $198.64, and the shares closed trading on Tuesday at $161.85.
Apple
It’s almost hard to comprehend that this legacy technology giant makes up a stunning 40% of the Berkshire Hathaway portfolio. Apple Inc. (NASDAQ: AAPL) designs, manufactures and markets consumer electronics and computers, and it has developed its own proprietary iOS and Mac OS X operating systems and related software platform/ecosystem.
Revenues are principally derived from the iPhone line of smartphones, the Macintosh family of notebook and desktop computers, iPad tablets, iPod portable digital music players, and the Apple Watch. The company also realizes revenue from software, peripherals, digital media and services. The technology giant has consistently churned out new products that the public loves, and an inexpensive iPhone is one of the newest offerings.
Apple stock investors receive a 0.63% dividend. J.P. Morgan’s price target is $200, and the consensus target is $190.20. The stock closed on Tuesday at $149.24.
Bank of America
The company posted very solid first-quarter results and is the second-largest holding at Berkshire Hathaway. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, corporations and governments in the United States and internationally. It operates 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms.
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