Warren Buffett remains one of the world’s most prominent investors, known for his long buy-and-hold strategies and massive portfolio of public and private holdings. With interest rates poised to stay where they are in 2025, it makes sense to add Buffett dividend-paying stocks that will rally when bond yields drop. Long-time investors and Buffett mavens are familiar with his quote, “His favorite holding for an S&P 500 stock is forever.” So, it is not surprising to report that, for all of the success and stature Berkshire Hathaway has in the investment world, just two top companies make up over 25% of the funds’ total holdings.
If any investor has stood the test of time, it’s Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world, and his annual Berkshire Hathaway shareholders meeting draws thousands of loyal fans who are investors. Berkshire Hathaway has a long history of beating the market. Over the past 20 years, Berkshire Hathaway delivered an average annual return of 12.1%, compared to the S&P 500’s 11.5%.
We often screen Berkshire Hathaway’s holdings for changes. While we are familiar with its very concentrated nature compared to most Wall Street portfolios, we were surprised to note that two companies that are leaders in the financial sector (which had an outstanding year in 2024, up more than 30%) make up 25% of Warren Buffett’s holdings. Both of these sector giants had a strong 2024 and could be poised for another banner year in 2025.
Why do we cover Warren Buffett stocks?
There are few investors with the results and the reputation Buffett has garnered over the past 50 years, and while investing has changed over the previous half-century, buying good companies with products and services that are known worldwide while paying dividends will always stay in style.
American Express
American Express is an American bank holding company and multinational financial services corporation specializing in payment cards.
This stock has been strong and pays a 0.90% dividend. American Express Co. (NYSE: AXP | AXP Price Prediction) is a globally integrated payments company that deals with card-issuing, merchant-acquiring, and card network businesses.
It offers products and services to customers worldwide, including consumers, small businesses, mid-sized companies, and large corporations.
Its segments include:
- U.S. Consumer Services (USCS)
- Commercial Services (CS)
- International Card Services (ICS)
- Global Merchant and Network Services (GMNS)
USCS offers travel and lifestyle services and banking and non-card financing products.
CS offers payment, expense management, banking, and non-card financing products.
ICS provides services to international customers, including travel and lifestyle services, and manages certain international joint ventures and its loyalty coalition business.
GMNS operates a payments network that processes and settles card transactions, acquires merchants, and provides multichannel marketing programs, capabilities, services, and data analytics.
Berkshire Hathaway owns 151,610,700 shares, 21.6 % of American Express’s float, and 15.5% of the portfolio.
Bank of America
Bank of America is an American multinational investment bank and financial services company.
The company posted outstanding fourth-quarter results, pays a solid 2.26% dividend, and is looking to increase the repurchasing of its shares. Bank of America Corp. (NYSE: BAC) is a ubiquitous bank and financial holding company in the United States.
Its segments include:
- Consumer Banking
- Global Wealth & Investment Management (GWIM)
- Global Banking
- Global Markets
The Consumer Banking segment offers consumers and small businesses a range of credit, banking, and investment products and services.
The GWIM includes two businesses:
- Merrill Wealth Management, which provides tailored solutions to meet clients’ needs through a complete set of investment management, brokerage, banking and retirement products
- Bank of America Private Bank, which provides comprehensive wealth management solutions
The Global Banking segment provides a range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services.
Global Markets segment offers sales, trading, and research services to institutional clients across fixed-income, credit, currency, commodity, and equity businesses.
Despite selling a stunning 326 million shares in 2024, Berkshire Hathaway still owns 680,233,587 shares, 8.9% of the float and 10.5% of the portfolio.
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