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, Buffett remains one of the preeminent investors in the entire world.
One reason for Berkshire Hathaway’s stunning success over the years is that Buffett and his close associate, 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 their portfolio pay solid and reliable dividends.
Long-time investors and Buffett mavens are familiar with his quote that “His favorite holding for an S&P 500 stock is forever.” So, it is not really surprising to report that, for all the success and stature Berkshire Hathaway has in the investment world, just five top companies make up almost 75% 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 it likely will into the future.
All five of these stocks are rated Buy, and all pay reliable dividends. However, 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 quarterly results. American Express Co. (NYSE: AXP) provides charge and credit payment card products and travel-related 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 1.20% dividend. Morgan Stanley has a $186 price target on American Express stock. The consensus target is $187.05, and shares closed trading on Wednesday at $175.91.
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