To say Warren Buffett has done well for himself would be an
understatement. That's why from time to time, I like to check in on
what the "Oracle of Omaha" is doing with
Berkshire Hathaway's (NYSE:
There is a neat resource if you like to keep tabs on Buffett,
CNBC.com has a page that tracks the common stocks in Berkshire's
portfolio in real-time.
see it here.
Looking at that page, it's very evident that Warren and I invest a
little differently than each other. He's the most famous value
investor in the world. I'm more than happy to let the dividends
roll in month after month -- even if the checks aren't in the
billions or millions.
So while I understand he isn't on the prowl for high-income
securities, the holdings still left me a little astonished. Poring
over the names, I recognized every stock -- Berkshire owns some of
the most well-known companies in the world.
But I also recognized that they don't own many stocks I would even
look twice at for income. The best one is
, which yields 6.0%.
To its credit, Berkshire has bought some securities that threw
out nice income. Back in 2008, it acquired some
Goldman Sachs (NYSE:
General Electric (NYSE:
preferreds that paid a nice
of 10%. However, that was a special deal not available to retail
investors and both companies have since redeemed thoseshares .
Digging a little deeper into Berkshire's holdings, I found the 34
common stock holdings yield an average of only 2.0%. Even so,
thanks the massive size of its portfolio, Berkshire will rake in an
astonishing $1.5 billion from dividends alone over the next year if
you project forward the annual payments of the current holdings.
Certainly $1.5 billion is a lot of money.
But Buffett's disinterest in income is costing Berkshire.
Just to see what happened, I calculated the average yield of the 44
holdings in my
portfolios. It comes out to 7.0% -- more than five full points
above Berkshire's 2.0% average yield.
In actual dividends paid, the difference between the yield on my
portfolio and Berkshire's would be staggering. Berkshire's
portfolio totals $73.1 billion (which is more than the
of Kenya, Puerto Rico, and Yemen, among others). If the entire
portfolio earned 7% in dividends annually, payments would total
$5.1 billion -- over $3.6 billion more than it does right now, and
enough to purchase seven dozen Boeing 737's.
Action to Take -->
Of course, we don't all have the portfolio of Berkshire Hathaway,
and I think Warren Buffett has done ok for himself with his value
focus. But the same principles that are leaving billions on the
table for Berkshire could be leaving thousands on the table for
your portfolio if you aren't making dividends a priority.
-- Carla Pasternak
Carla Pasternak does not personally hold positions in any
securities mentioned in this article. StreetAuthority LLC does not
hold positions in any securities mentioned in this article.
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