Although Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) Do not pay profits, it is clear that the CEO of Warren Buffett is a big fan of companies that cut investors from their profits through the regular checks that are delivered. In fact, each of the 10 largest holdings of the shares in the Berkshire portfolio pays reliable profits.
More surprising, while Pavite has argued that most investors should limit their exposure to risks and volatility through diversification, the formation of his company’s shares portfolio is largely focused on a few shares that pay profits. In fact, only two of these companies account for approximately 37 % of Berkchire shares. Read as two Motley Fool shareholders offer a look at the Buffett’s Buffett’s Burn apple (Nasdaq: Aapl) and American Express (NYSE: Axp).
Keith Nun (apple): Pay profit distributions are usually a good sign that the company is achieving reliable profits, and Apple is often classified as the best business in the world over the past decade. But with Profit From about 0.5 %, Apple shares are characterized by relatively small profit distributions at today’s prices. On the other hand, the stock still generates a large amount of profit income for Hathaway.
As of the last general disclosure, Berkshire has 300 million shares from Apple – which represents nearly 23 % of the total stock portfolio. With the payment of shares that pay annual profits of one dollar per share, the current Berkshire Center in the company will generate $ 300 million from profit income over the next year, even if the technology giant does not enhance its payments.
Given that Apple has increased its profits every year since compensation began in 2012, there is a good opportunity because it will be provided with profit distributions this year again. But the profit distributions of Berkshire can end from Apple less than $ 300 million.
With the maximum market of about $ 3.36 trillion, to this writing, Apple is the largest company in the world. Last year, it was also ranked second in the world-winning world-recently behind the Saudi oil giant only. But despite another year of strong profits, Berkshire has a dramatically reduced the size of apple holdings.
Berkshire has sold more than 615.5 million Apple shares since the beginning of 2024, which reduces its location in the company by approximately 67 %. The fact that Apple is still the biggest detention in the investment group indicates that Pavite and its advisers still believe that Apple is a great company, but it seems that Berkshire has some concerns related to giant technology and the broader market.
So, while Berkshire is still relatively focused in terms of its holdings, some modern sales of Apple and other basic pillars of the wallet have long mean that they have become more diverse. The stock sales also helped the company to build standard money and the location of short -term bonds for more than 334 billion dollars, so it has a lot of resources like Buffett and its advisers seeing opportunities.
Jennifer Saipil (American Express): American Express is one of the longest stocks and favorites in Buffett. He praised her several times in many ways, from glorifying her global brand, which “travels” to her reliable profits. It represents nearly 14 % of Berkshire shares portfolio, the second largest holding in the investment group.
Buffett has all the three large credit card network shares, which include Visa and MasterCardBut American Express carries a special place in the Berkshire Hathaway wallet, and it stands out of other networks in several ways.
AmeX earns the annual fees for most of its cards, and 70 % of the new cards acquisition in 2024 were for fees -based products. The fee model creates a cycle of loyalty as well as the frequent flow of revenue, with a high renovation rate. The fee income increased by 19 % on an annual basis in the fourth quarter 2024, most of which goes directly to the minimum. Revenue increased by 10 % year on an annual basis in the fourth quarter 2024, and the share profits increased by 16 %.
The wealthy customers who can pay these fees and the American Express is estimated at the exclusive rewards. These clients also tend to spend more than the ordinary consumer, especially on travel and entertainment. This group is flexible in the face of economic challenges such as inflation, and providing the growth of America Express even under the opposite conditions.
Another way is to distinguish between the American Express in the closed episode model. Instead of partnership with banks, like most of its competitors, it works as its own bank. But more than providing credit to its cards, the bank sector provides various revenue flows from all its banking products and brings a lot of money in the organization. The net interest revenue increased by 18 % year on an annual basis in 2024 to 4 billion dollars.
American Express has made efforts to prepare the younger card members, and this decisive step is what will lead to the future. Millennial customers and General Z are already its largest expenditures depending on the age group, and they will grow with the company, which leads to higher growth.
Finally, American Express pays increasing profits that give 1 % at the current price, providing negative income for long -term investors.
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He continues.
*The stock consultant dates back from March 24, 2025
American Express is an advertising partner for Motley Fool Money. Jennifer Saibel He has positions in American Express and Apple. Keith Nun He has no position in any of the mentioned stocks. Motley Fool has positions in Apple, Berkshire Hathaway, MasterCard and Visa. Motley deception has Disclosure.
37 % of Warren Buffett’s wallet was invested at a value It was originally published by Motley Fool
