Buffet's 50% yield
One of Buffett's most famous long-term holdings is his 8.9% stake in The Coca-Cola Company (NYSE: KO). The $15bn shareholding is Buffett's company Berkshire Hathaway's largest holding and most of it dates back to 1988, when Berkshire spent $1bn to acquire a 6.2% stake at an approximate cost, adjusted for splits and dividends, of $3.75 per share.
Back in 1988, Coke shares offered a yield of 4% -- decent, but not amazing. Since then, the company has maintained its 50-year unbroken record of annual dividend increases. The result is that in 2011, the dividend payout was $1.88, providing Buffett with a massive 50% yield on his original investment.
Company May 2002
share price2002 yield
on cost2011 yield
on costBritish American Tobacco (LSE: BATS) 793p 1.4% 15% SSE (LSE: SSE) 679p 4.8% 11% Vodafone (LSE: VOD) 118p 1.3% 7.5% Tesco (LSE: TSCO) 246p 2.5% 6.0% Unilever (LSE: ULVR) 1,396p 1.5% 5.6% BAE Systems (LSE: BAE) * 371p 2.5% 5.1% Diageo (LSE: DGE) 856p 2.8% 4.7% GlaxoSmithKline (LSE: GSK) * 1,477p 2.7% 4.7% HSBC (LSE: HSBA) * 830p 4.0% 3.1% Average yield: - 2.61% 6.97%
It would be interesting to hear what companies fellow investors would choose to Invest in for the next 30 years.
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If there was one company you could choose to Invest in over a 30 year period which would it be and why?
This is not an easy question to answer, it requires a lot of thought and it is very difficult to try and work out what will happen in the next few weeks let alone the next 30 years!
I recognise that none of us our Buffett & we probably should'nt invest like him given the advantages we have as private investors.
I personally prefer to just Buy and Hold, it is more cost effective as you don't constantly pay stamp duty and broker fees. Also I think the less decisions one has to make more often then not the better of they are & I am a strong believer that doing nothing MOST of the times is the right course of action.
Looking back over the last month what was the fuss all about with Soco going to around £2.50ish....
The reality is markets will always move, stocks will always go up and down. The trick is are you smart enough to asses the value of a share as well as a reasonable foresight to see where the future lies for a company and then have the patience to see out the value?
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Isaac, you might want to take a look at some of our Warren Buffett-esque stock screens.
http://www.stockopedia.co.uk/screens/guru/warren-buffett-1/
We have modelled them based on a couple of books - Buffettology and the Warren Buffett Way. Sure they are quantitative, but they have a tendency to highlight consistently profitable, high return companies that exhibit the financial signs of a durable competitive advantage.
In creating a qualitative framework for assessing individual stocks it's important to understand how to identify an economic moat - http://j.mp/wAc57q
Personally I've always been impressed by Abcam (LON:ABC) - though it's always been (and still is) too expensive for me to warrant buying. It's got a phenomenal network effect in its niche, distributing antibodies to research analysts via the web and has impressive economics spitting off a great deal of free cashflow. The trouble with high quality companies is that they are generally recognised by the market and don't come cheap and price is all I'm afraid - as Buffett would say always buy with a margin of safety. I am though completely unsurprised to find that it shows up consistently on our Buffettology screens.
Of the companies in your list I'd say Tesco on the assumption that they can keep up international expansion.
One will need to start with a very low cap growth company that is not paying a divi today.
That company needs to grow profits around ten times and start paying a divi of just 10%.
Bingo.
Get a few stocks like that when you are young and no need to work past 30.!
And which stocks are they harryr?
Start looking at firms that could grow that fast.
I love stocks that have come down 98% plus from their highs but have been building the profit making blocks as they go along.The long term shareholders give up over 5 to 10 years as does the city.These stocks still need to have the edge new directors, contracts, or products timing, and so on.I go fishing for under £5M pound companies.
In reply to harryr, post #5
Yes, I have understood all of that. But exactly which companies are you referring to is what I am asking.
How much would you pay for a company if it was the No1 in its field, in the world.?