In the 13-page communication, the Warren Buffett, CEO & Chairman of Berkshire Hathaway, discussed share buybacks, transactions that may take place "at a price above book value, but below our estimate of intrinsic value".
Warren Buffett’s annual letter to shareholders released over the weekend had a big news in store for the investors. In the 13-page communication, the CEO & Chairman of Berkshire Hathaway discussed share buybacks, transactions that may take place “at a price above book value, but below our estimate of intrinsic value”. Over time, Berkshire will become a ’significant’ re-purchaser of its own shares, he wrote in page 3 of the letter.
The veteran investor said: “it is likely that – over time – Berkshire will be a significant repurchaser of its shares, transactions that will take place at prices above book value but below our estimate of intrinsic value.”
Many of the heavyweights in Warren Buffett’s portfolio including Kraft Heinz, Wells Fargo, The Coca-Cola Company, International Business Machine Corporation (IBM), Phillips 66, American Express are known to pay heavy dividends.
Warren Buffett’s penchant for dividend paying stocks is well-known. Interestingly, Store Capital Corp, his only real estate bet, pays a dividend of 4.1 per cent, which is more than double the S&P 500 average, according to a Forbes report. In the last five years, the firm has also raised its dividend 32 per cent.
Meanwhile, Warren Buffett’s company posted a $25 billion loss in the fourth quarter because of a big plunge in the paper value of several of the investments made into stocks.