Warren Buffett knows a thing or two about stock market investing. The bespectacled investor has been combing the stock market for decades in search of firms trading at big bargains to their real values. But Buffett doesn’t want just any cheap stock – they have to have plenty of growth behind them as well. And, often, Buffett’s big buys have a hefty dose of dividend growth behind them as well.
So, investors should take comfort in the fact that Buffett and Berkshire Hathaway (BRK-B) have continued to buy shares in our Best Dividend Stocks List pick in the financial sector. The famed value investor now owns nearly 60 million shares of our pick.
And there’s a good reason why.
Our pick has long been one of the more conservative banks in the nation. That conservativism worked wonders during the recession when our pick was able to use its strong financial position to buy many smaller rivals. This boosted its footprint and quickly made it one of the largest regional banks in the nation. With this huge base of deposits, our pick has been able to invest in a variety of initiatives to grow even further.
Much of that spending has been on technology – on both consumer and institutional fronts. Thanks to new apps, mobile banking, A.I., a boosted financial services platform and other moves, our pick has quickly become one of the leading technology players in the entire financial and banking sectors. This has continued to boost margins and profits at the banks. Also, helping has been the positive loan growth environment and its stronger-than-peers’ net interest margins.
All of this has made our pick one of the best dividend growth stocks in the sector. Buffett is undoubtedly pleased with his choice. And regular investors should be as well.
To summarize, here are five reasons why you should own this stock:
1. Has paid steady dividends since its founding in 1986 and increased its payout by 950% since the end of the Great Recession. Recently upped its buyback program by $1 billion.
2. Recently reported full-year 2019 profits of well over $5 billion – an increase of 6.35% when looking at diluted EPS basis!
3. Has smartly used fintech and technology investments to boost its bottom line and attract new customers to its system.
4. Fiscally conservative-run bank featuring a strong balance sheet and low loan default profile.
5. Healthy payout ratio of 38% and yield of 3.06%.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.
