Few if any money managers command the attention of investors quite like the Oracle of Omaha, Warren Buffett. Since taking over as Berkshire Hathaway’s (BRK.A 0.14%) (BRK.B 0.28%) CEO six decades ago, Buffett has overseen a cumulative return in his company’s Class A shares of 5,477,866%, as of the closing bell on Jan. 8. When you lap the benchmark S&P 500 many times over, you’re going to draw a crowd.
Buffett’s success has been defined by his unwavering search for value, a preference to concentrate Berkshire’s investment portfolio into his top ideas, and his long-term ethos.
But another factor that’s not given nearly enough credit is his love of dividend stocks. Companies that pay a regular dividend to their shareholders are usually profitable on a recurring basis, time-tested, and capable of providing transparent long-term growth outlooks.
Additionally, a study from Hartford Funds (The Power of Dividends: Past, Present, and Future) found that income stocks have more than doubled the average annual return of non-payers covering a 50-year period (1973-2023): 9.17% vs. 4.27%.
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