Warren Buffett's Berkshire Hathaway, with a valuation of nearly $900 billion, is poised to become the first non-technology company in the U.S. to join the $1 trillion club within the next 12 months. Berkshire Hathaway has a diverse portfolio of businesses and follows a long-term investment strategy focused on steady growth, consistent profitability, and strong management teams. The company's top holdings include Apple, American Express, Coca-Cola, and Chevron. Berkshire Hathaway's $388 billion portfolio is invested in three key stocks, which account for 63% of its invested assets. The three stocks are Apple, Bank of America, and American Express. Apple is the largest holding, accounting for 43.5% of the portfolio. Buffett views Apple as one of Berkshire Hathaway's best businesses due to its loyal customer base, strong management team, and capital-return program. Bank of America makes up 10.6% of the portfolio and is Warren Buffett's favorite bank stock. Despite a recent 16% decline in its stock price due to increased interest rates and charges related to the collapse of several banks, Bank of America is well positioned to rebound. It has added customers, taken market share, and its expenses have increased at a lower rate than inflation. Bank of America pays a dividend that yields 2.4% and has been raised annually for about 10 years, with a 2,300% increase over the past decade. American Express accounts for 8.7% of the portfolio and benefits from cyclical business trends, predictable merchant fees, and attracting higher-income cardholders. Berkshire Hathaway has a track record of delivering annual returns of 19.8% over 58 years. To reach $1 trillion in market capitalization, the company only needs to gain 11%. Several factors could work in Berkshire's favor, such as Apple's stock buyback, potential dividend increases from top holdings, potential interest rate cuts by the U.S. Federal Reserve, and Warren Buffett's continued belief in the company's future. Berkshire Hathaway's strong financial growth is evident, with $364.4 billion in revenue generated last year and its equity growing from $2.3 million in 1965 to $96.2 billion in 2023. Bank of America (NYSE: BAC) is a great dividend stock that is currently down 16% from its high. Despite the short-term external headwinds, the stock has a proven track record, excellent prospects, and a juicy dividend. Bank of America is Warren Buffett's favorite bank and accounts for 10.6% of Berkshire Hathaway's investment portfolio. The stock is undervalued and has a strong consumer-oriented business. While revenue and net income have fallen, the company is resilient and has been adding new consumer accounts and credit cards. Bank of America pays a growing dividend that yields 2.4% at the current price and has been increased annually for about a decade. It is a strong company with an excellent dividend, making it a great long-term investment.
Warren Buffett's Berkshire Hathaway also owns 400 million shares of The Coca-Cola Company stock, representing approximately 9.3% of the company and 6.5% of Berkshire's portfolio. Coca-Cola pays a quarterly dividend of $0.485 per share, resulting in an annual dividend of $1.94 per share. Berkshire will earn $776 million in dividends from Coca-Cola this year, equating to $194 million quarterly or about $2.13 million daily. Coca-Cola has raised its annual dividend payment for 62 consecutive years, indicating potential future growth in Berkshire's income.
According to a recent article from The Motley Fool, three Warren Buffett stocks are considered screaming buys for the second half of 2024 and beyond. The first stock is Amazon, which is historically cheap relative to cash flow projections. The second stock is Chevron, which has macro factors working in its favor and is historically inexpensive. The third stock is Coca-Cola, which provides a basic necessity product and has strong branding and consistent growth potential. These stocks are seen as bargains and have the potential to deliver significant returns for investors. With Berkshire Hathaway's long-term investment strategy and Warren Buffett's track record of success, these stocks could be solid additions to the company's portfolio. [965cde8d]