While Warren Buffet has a portfolio of common stock that he hand-picked himself he does have some high dividend yields.
Berkshire has three major stocks in its portfolio. Store Capital, Kraft Heinz, and Coca-Cola. The major player in this list is Kraft Heinz which pays more money per dividend than the other two. Berkshire has owned Coca-Cola the longest.
Store Capital is a real estate company that specializes in retail and in entertainment properties. The reason that they are a valuable stock to have is that their tenants pay the taxes and maintenance expenses as well as for the insurance. Plus their leases are for fifteen years or longer.
As Berkshire has such a larger percentage of the Kraft Heinz company it has to account for it differently than their other stock. When Berkshire invested in Kraft Heinz it also invested in 3G Capital creating a majority stake for the Berkshire company.
While Buffet likes to invest in a quality business that has a lot of growth potential he has several major elements in choosing what companies he buys stock in. Three of the major elements are value, financial means, and value.
Buffet keeps his investments in businesses he can understand. His reasoning is that if you cannot understand the business then how can you project its performance.
When it comes to the management of the company whose stock he is looking at he asks questions such as “is management honest with its stakeholders,” and “does management admit their mistakes.”
Buffet also looks at long-term returns and only chooses short term when he has come across a good deal. The term “moat” was coined by Buffet. The moat is what gives a business an advantage over other businesses.
When giving advice to others Buffet suggests that small investors buy stock in a low-cost S&P 500 index fund. Should you choose to purchase individual stocks if you follow Buffet’s guideline you will find yourself earing solid returns.