Warren Buffett has long been an investor interested in dividends. A quick look at the Berkshire Hathaway
Company |
Number of Shares |
Recent Dividend Yield |
Estimated Annual Dividend Income |
---|---|---|---|
Wells Fargo |
303 million |
5.2% |
$412 million |
Coca-Cola |
200 million |
3.4% |
$304 million |
Procter & Gamble |
101 million |
2.5% |
$162 million |
American Express |
152 million |
3.4% |
$109 million |
Those dividend payouts total nearly $1 billion, and they're just a few of many dividend payers in the portfolio. A recent filing with the SEC, for example, reveals a newer position of some 84 million shares of ConocoPhillips
Better still, Buffett has held on to his dividend payers for many years, thus earning rather huge effective yields. (Read how my dividends are bigger than yours for more on effective yields.) Coke's dividend has increased tenfold during the 20 years that Buffett has held it. Hanging on to strong and growing companies for years, if not decades, is what many successful dividend investors do. (Indeed, having dividend payers in your portfolio can help you sleep at night, too, especially in these volatile days.)
One blogger, Dobromir Stoyanov, recently suggested that Buffett is a typical dividend investor because he trimmed his position in Bank of America
Most important to an investor is whether the company seems healthy and what its growth prospects are, as well as whether there are more attractive investments. It may just be that Buffett thought he'd get more bang for some of his bucks in ConocoPhillips than in Bank of America.
Consider investing in steady dividend payers. For recommendations, I encourage you to test-drive, for free, our Motley Fool Income Investor newsletter, featuring many firms with dividend yields higher than 6%.
Here are some of my colleagues' thoughts on the attractiveness of our current market: