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Berkshire Hathaway’s Top 10 Stock Holdings 2017

Warren Buffett’s holding company Berkshire Hathaway has investments in nearly 50 companies, below 10 stocks constitutes nearly 80% of the total holdings.

1. Kraft Heinz (KHC)

Kraft Heinz is one of the largest food and beverage companies in the world. Kraft Heinz sells a large range of sauces, condiments, cheese and dairy products, meals, beverages, meats and other grocery products in nearly than 180 countries. Company have been operating in the food industry for over 100 years and own famous brands such as Jell-O,   Bagel Bites, Philadelphia, Velveeta, Ore Ida, Planters, Oscar Mayer etc. Kraft Heinz is Warren Buffett’s biggest holding with nearly 19.2% allocation.

Here is what Warren Buffett said about Berkshire Hathaway’s stake in Kraft Heinz:
“We will be in this stock forever. This is a business with us. It’s not really a stock…It’s where the new Kraft Heinz Co. is 10, 20, 50 years from now that counts to Berkshire. These are brands I liked 30-plus years ago, and I like them today. And I think I’ll like them 30 years from now.” ~ Warren Buffett

Percent of Berkshire Hathaway’s Portfolio: 19.2%
Dividend Yield: 2.6%
Sector: Consumer Staples

2. Wells Fargo (WFC)

Wells Fargo has a rich history of nearly 160 years, and the company has since grown to be the America’s third-largest bank by assets. Wells Fargo runs nearly 90 business lines across a mix of mortgage, investment, banking, insurance and consumer & commercial finance services. Wells Fargo is Warren Buffett’s second biggest holding and accounts for nearly 17.86% of Berkshire Hathaway’s portfolio. 

Warren Buffett started accumulating Wells Fargo in 1989, when pessimism surrounding bank stocks was extremely high. Recently Wells Fargo was in news as  thousands of its employees created fake bank and credit card accounts without customers’ knowledge or permission. Warren still defended the company by saying that Wells Fargo is a great bank.

“It’s a great bank that made a terrible mistake. It was a dumb incentive system, which when they found out it was dumb they didn’t do anything about it.” ~ Warren Buffett

Percent of Berkshire Hathaway’s Portfolio: 17.9%
Dividend Yield: 2.6%
Sector: Financials

3: Coca-Cola (KO)

Coca-Cola needs no introduction to us as it is the largest and most familiar beverage company in the world. Company owns more than 500 sparkling and still brands covering nearly 4,000 different beverages. During the years Coke has become a global company. Nearly 20% of the company’s case volume was sold in North America in 2016. Latin America (29%) and Asia (22%) are major regions for Coca-Cola with higher growth rates. 

Coca-Cola might be Warren Buffett’s most famous stock investment. Buffett scooped up a major stake in Coca-Cola in 1988 after the 1987 stock market crash made the company’s valuation too enticing to pass up. Coca-Cola is an example for how Buffett falls in love with companies having economic moats. 

As per capita income grows in emerging economies, where Coke has a major presence, growth rate  should continue rising for its products.

Though Coca-Cola has been widely criticized for its “junk” nature, Warren Buffet always defended his decision to be invested in Coke.

“I elect to get my 2,600 or 2,700 calories a day from things that make me feel good when I eat them. That’s my sole test,” he said. “I like fudge a lot. Peanut brittle. I am a very, very, very happy guy.” ~ Warren Buffett

Percent of Berkshire Hathaway’s Portfolio: 11.2%
Dividend Yield: 3.5%
Sector: Consumer Staples

4: International Business Machines Corp. (IBM)

International Business Machines Corp has a rich history of more than 100 years and provides a wide variety of products and services, including IT infrastructure services, consulting, software, and hardware. Over 90 of the top 100 banks and all top 25 retailers in the U.S. run on IBM’s systems, and about half of all Fortune 100 companies outsource their IT operations to International Business Machines Corp. 

Berkshire Hathaway began accumulating IBM in 2011, and the position has grown to be one of Buffett’s largest holdings at 8.5% of Berkshire Hathaway’s portfolio.

“What you pay for a stock doesn’t mean anything. What means something is where the company’s going to be in five to 10 years. I think IBM will be worth more money but, like I said, I could be wrong but we’ll accept that.” ~ Warren Buffett

Percent of Berkshire Hathaway’s Portfolio: 9.11%
Dividend Yield: 3.1%
Sector: Technology

5. American Express

Founded in 1850, American Express(Amex) and is a financial services company widely known for its credit card and travel-related services used by consumers and businesses. In 2016, over $1 trillion was billed on American Express cards. American Express is one of Berkshire Hathaway’s oldest and most successful stock picks.
Buffett first invested in American Express in the mid-1960s, and the company remains one of his largest positions today. Buffett first purchased shares of American Express in the wake of the infamous salad oil scandal, which caused the company to incur major liabilities. 

Now American Express is consistently rated as one of the most valuable brands in the world, and its cards are used in over 180 countries.

Percent of Berkshire Hathaway’s Portfolio: 7.6%
Dividend Yield: 1.6%
Sector: Financials

6: Phillips 66

Phillips 66 generates the majority of its profits from refining oil, marketing refined petroleum products such as gasoline, and selling various chemicals such as plastics that are by-products of oil. 

Phillips 66 is benefiting from the drop in oil prices because oil is a major raw material for its refining operations. Since the price of gas hasn’t fallen as much as the price of oil, the Phillips 66’s refining and marketing operations are enjoying profit increases.

Percent of Berkshire Hathaway’s Portfolio: 4.7%
Dividend Yield: 3.2%
Sector: Energy

7. Apple (AAPL)

Apple needs no introduction. It sells smartphones, tablets, computers, softwares, services, and accessories. Company’s flagship product iPhone has been the highest driver of Apple’s growth and accounted for approximately 65% of the company’s total revenue last fiscal year. Apple computers (Macs) accounted for 11% of sales, and iPads made up another 10%. 
Warren Buffett acquired a $1 billion stake in Apple during the first quarter of 2016. Apple is also a free cash flow machine. Over the last decade, Apple’s free cash flow per share grew from 38 cents in fiscal year 2005 to $12.09 in fiscal year 2015. Throughout that period, Apple’s annual return on equity averaged an outstanding 30%.

Percent of Berkshire Hathaway’s Portfolio: 4.5%
Dividend Yield: 1.7%
Sector: Technology

8. U.S. Bancorp (USB)

U.S. Bancorp was founded in 1863 and is the fifth largest bank in America. USB provides a full range of financial services, including lending, cash management, capital markets, and investment management services. 

Warren Buffett owns U.S. Bancorp because it is a high quality, conservatively managed business that has demonstrated an ability to achieve consistent growth over a long period of time.

Percent of Berkshire Hathaway’s Portfolio: 3.0%
Dividend Yield: 2.0%
Sector: Financials

9. Delta Air Lines (DAL)

Delta Air Lines is one of the biggest passenger airlines in the world after its merger with Northwest Airlines in 2008. The company has routes servicing over 340 destinations located across more than 60 countries. 

Berkshire Hathaway started buying Delta Airlines in Q3 of 2016. From leading operational metrics to fuel costs, the company is clearly ahead of the industry’s average marks, which attracted Buffett to change his view about airline industry as a whole.

“It’s true that the airlines had a bad 20th century. They’re like the Chicago Cubs. And they got that bad century out of the way, I hope. The hope is they will keep orders in reasonable relationship to potential demand.” ~ Warren Buffett

Percent of Berkshire Hathaway’s Portfolio: 2.0%
Dividend Yield: 1.6%
Sector: Transportation

10. Charter Communications

Charter Communications is an American telecommunications company, which offers its services to consumers and businesses under the branding of Spectrum. Providing services to over 25 million customers in 41 states of US, it is the second-largest cable operator by subscribers.

Percent of Berkshire Hathaway’s Portfolio: 1.8%
Dividend Yield: 0.2%
Sector: Telecommunications

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