If any investor has stood the test of time, it’s Warren 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. They were stunned at this year’s meeting when Mr. Buffett announced that he is stepping down at the end of the year as CEO of the investment giant. While he will remain Chairman of the Board and continue to have a voice in the day-to-day operations, his pre-announced successor, Greg Abel, will assume the CEO position at the end of the year.
24/7 Wall St. Key Points:
- Many S&P 500 companies are reporting excellent second-quarter earnings results
- Some of Warren Buffett’s top holdings are also posting stellar numbers
- Berkshire Hathaway has sold off some since the announcement of Buffett stepping down
- Are Warren Buffett dividend stocks a good idea for you? Why not contact a financial advisor in your town for a complete portfolio review? Click here to get started finding one today. (Sponsored)
Second-quarter earnings season is in full swing, and not surprisingly, many of the top U.S. stocks, especially in the technology arena, are posting some outstanding results. We decided to screen our Warren Buffett dividend stock research database, looking for companies that pay big and dependable dividends that also beat Wall Street’s second-quarter earnings expectations. Four of our favorite companies came up, and all are Berkshire Hathaway home runs you can buy now and hold forever. All make sense for growth and income investors.
Why do we cover Warren Buffett’s stocks?
There are few investors with the results and the reputation Mr. Buffett has garnered over the last 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 Company is an American bank holding company and multinational financial services corporation specializing in payment cards. American Express Company (NYSE: AXP | AXP Price Prediction) is a globally integrated payments company that deals with card-issuing, merchant-acquiring, and card network businesses.
This stock has been strong, reporting an EPS of $4.08, exceeding analysts’ consensus estimates of $3.86. This represents a 5.7% surprise over the Wall Street estimates. Excluding a prior-year gain from a sale, the adjusted EPS rose 17% compared to the previous year. The company’s revenue surged to $17.9 billion, a record high and a 9% increase year-over-year American Express Company (NYSE: AXP) 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.
Kraft Heinz
Kraft Heinz is North America’s third-largest food and beverage company and the fifth-largest globally. Even in bad times, everybody has to eat, and this company always stands to benefit while paying a tremendous dividend.
The company reported adjusted EPS of $0.69, which was higher than the Wall Street analyst consensus estimate of $0.64. This represents a 7.81% positive surprise compared to the consensus estimate on the street. The company also reported revenue of $6.35 billion, exceeding the analyst consensus estimate of $6.25 billion.
The Kraft Heinz Company (NYSE: KHC) was formed via the merger of H.J. Heinz Company and Kraft Foods Group and manufactures and markets food and beverage products worldwide through its eight consumer-driven product platforms:
- Taste Elevation
- Easy Ready Meals
- Hydration
- Meats
- Cheeses,
- Substantial Snacking
- Desserts
- Coffee and other grocery products
The Company has two reportable segments defined by geographic region: North America and International Developed Markets.
Its other segments, consisting of West and East Emerging Markets (WEEM) and Asia Emerging Markets (AEM), are combined and disclosed as Emerging Markets. It manufactures its products from a wide variety of raw materials.
Kraft Heinz brands include:
- Kraft,
- Oscar Mayer
- Heinz
- Philadelphia
- Lunchables
- Velveeta
- Ore-Ida
- Capri Sun
- Maxwell House
- Kool-Aid
- Jell-O,
- Golden Circle
- Wattie’s
- Plasmon
- ABC
- Master
- Quero
- Pudliszki, among others
The Company’s products are sold through its sales organizations and independent brokers, agents, and distributors.
Kroger
Kroger is an American retail company that operates supermarkets and multi-department stores throughout the United States. This leading grocery chain giant is a consistently solid and conservative investment. The Kroger Company (NYSE: KR) is a retailer in the United States. It operates combination food and drug stores, multi-department stores, marketplace stores, and price-impact warehouses.
While Kroger’s adjusted earnings per share of $0.93 were a penny ahead of the Wall Street consencus, total sales of $33.912 million fell just of the estimated $34.069 million. Investors should be aware that despite missing revenue expectations, Kroger’s net income for the quarter rose to $466 million, a significant improvement from the $180 million net loss reported in the same quarter last year. This recovery was primarily attributed to the impact of a $1.4 billion opioid settlement charge in the previous year.
Its combination of food and drug stores offers:
- Natural food and organic sections
- Pharmacies
- General Merchandise
- Pet centers
- Fresh seafood and organic produce
Multi-department stores offer:
- Apparel
- Home fashion and furnishings
- Outdoor living
- Electronics
- Automotive products
- Toys
The company’s marketplace stores offer:
- Full-service grocery, pharmacy, health, and beauty care
- Perishable goods, as well as general merchandise, including apparel, home goods, and toys
- Price-impact warehouse stores sell groceries, health and beauty care products, meat, dairy, baked goods, and fresh produce.
The company also manufactures and processes food products in its supermarkets and online; it sells fuel through 1,613 fuel centers.
Berkshire Hathaway owns 50,000,00 shares, which is 7.6 % of the Kroger float, and 1.2% of the portfolio.
Visa
The American consumer keeps spending and it showed up in the company’s earnings for the second quarter. Visa Inc. (NYSE: V) is a global payments technology company. It facilitates global commerce and money movement across more than 200 countries and territories among a global set of consumers, merchants, financial institutions and government entities through technologies.
The company reported adjusted earnings per share (EPS) of $2.76, surpassing the Wall Street consensus Estimate of $2.68 per share. That was an earnings surprise of 2.99%. Visa also reported net revenues of $9.6 billion, which slightly exceeding the anticipated $9.55 billion and beating the consensus estimate by 0.3%. This strong performance was driven by increases in payments volume, cross-border volume, and processed transactions.
The company operates through the Payment Services segment. It provides transaction processing services (primarily authorization, clearing and settlement) to its financial institution and merchant clients through VisaNet, its proprietary advanced transaction processing network.
It offers a range of Visa-branded payment products that its clients, including nearly 14,500 financial institutions, use to develop and offer payment solutions or services, including credit, debit, prepaid and cash access programs for individual, business and government account holders. It also provides value-added services to its clients, including issuing solutions, acceptance solutions, risk and identity solutions, open banking solutions and advisory services.
Berkshire Hathaway owns a small position for 8,297,460 shares, which is 0.4 % of the Visa float, and 1% of the portfolio.
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