If the famous Berkshire Hathaway does not pay dividends (despite the billions of cash it has in its belly), the coupon is not, however, an aspect to be overlooked by its patron Warren Buffett, at the time consecrated indisputable guide for drawers all over the world (those who remain invested in a security over a long-term horizon). Many of his past investments have in fact focused on companies that offer solid and growing remuneration for shareholders: from General Motors to Verizon, from General Electric to Coca-Cola.
A strategy that becomes even more important in periods of low interest rates where it is difficult to find a good return on one's capital on the bond front. Furthermore, the attention that investors are paying to stocks with a high dividend is bound to support their share prices as well. TO Business Square, not surprisingly, a real dividend fever is underway which has rewarded companies such as Enel which, despite a decline in the balance sheet results, however increased the dividend to 14 cents from 13 (and the stock closed with a 3% increase during the day). At the same time it announced a strong correction of the dividend policy with the payout, the share of profits that is distributed annually to shareholders, destined to grow from 40% to 50% in 2015 to reach 65% in 2019.
DIVIDENDS YIELD AT THE TOP
Of course, we remind you that investing in shares is very different from buying bonds: you are exposed to market fluctuations and you also need to pay attention to the dividend policy implemented by the company in which you invest. In fact, the dividend is not constant like a bond coupon, but is decided from time to time by the board of directors according to the economic trend and the dividend policy to be pursued. It can thus happen that the coupon is reduced or in the most extreme cases is not distributed.
In any case, in difficult times, solid companies with stable capital flows may have an interest in maintaining investor confidence by maintaining a stable dividend policy or even increasing it. General Motors of which Buffett is a shareholder with 41 million shares, for example, pays a dividend that yields 3,20%. The yield of the coupon of a share, or dividend yield, corresponds to the ratio between the dividend paid by a listed company for each single share and the last market price of the share itself. In other words, the return that the investor has by collecting a certain coupon and buying the share at a certain price. In the case of the Detroit automaker, the price is around $38,8 and it pays a dividend of 120 cents, the dividend yield is thus 3,2%. A yield which, although not comparable in terms of the type of investment, is well above the rate paid by the 1,20-year BTP of 30%. And CEO Mary Barra has recently announced, among other things, that the dividend will rise from 36 cents a quarter to 25. Furthermore, the group, which has gone through difficult years and was saved by the intervention of the US Treasury after the crisis, has now decided , against the 5 billion cash he has in his stomach, under pressure from some activist investors, to proceed with a buyback of XNUMX billion dollars, a financial move that increases the value of the shares held by shareholders.
Among the other securities that are part of Buffett's portfolio, it should also be noted Verizon which has a dividend yield of 4,56%, among the highest yielders of the American Dow Jones Industrial Average index. Verizon has increased its dividend for eight years in a row and for some it is not excluded that these increases could continue. Among the best payers of the Dow Jones there is then General Electric which yields about 3,59% and which is continuing in its process of transformation into an industrial conglomerate by reducing the part of a financial conglomerate.
Two classic dividend stocks are consumer stocks Coca-Cola need Procter & Gamble (the group of Pantene shampoo and Gillette razors) which boast a dividend yield of approximately 3,19% and 3,10%, respectively. Both of these consumer behemoths have raised their dividends for over fifty years in a row (and for this reason, P&G stock, for example, doesn't come off cheap). P&G detaches the dividend on March 27th. Then there is English Diageo, the group of J&B and Baileys, which maintains a payout above 50% and a dividend yield around 3%.
OIL, IF THE PRICE FALLS…
Be careful, however, a high dividend yield today can also hide a drastic drop in share prices. This is the case with oil stocks these days. There National Oilwell Gate for example, it has a dividend yield of around 3,5% but has seen its price fall by around 26% in the last year, due to the decline in crude oil. The barrel slump has also affected most of Big Oil. So now Royal Dutch Shell pays a dividend of approximately 5,5% against a fall in the stock of approximately 25%, Chevron around 4% ed Exxon Mobil at 3%. Among the most "generous" of these times there is also the French Total which has a dividend yield of 6%. Certainly the sector is put under pressure by the unknown future scenarios of oil prices and it is difficult to expect a particularly aggressive payout policy in the future, with further increases in the absolute value of the coupon.
TOBACCO AND PHARMACEUTICALS: EVERGREEN
HIGH COUPON FINANCE
After oil, one cannot fail to mention tobacco. The sector has always been one of the classics when it comes to dividends. The Colossus Philip Morris International, which releases its dividend on March 24, offers a 4,8% dividend, as well as Altria which yields 3,97% (the Marlboro brand is one of the best known in the world). Similarly British American Tobacco yields about 4%. Also worth mentioning is the pharmaceutical with Merck whose dividend yield is around 3%, Sanofi 3,7% e Roche 3%. For example, the latter has seen its coupon increase by more than 200% in the last ten years.
Those who are not afraid to move to financial stocks that gravitate towards the world of private equity and restructuring can look at the giant's dividend yield Blackstone, the American fund that bought the historic headquarters of Corriere della Sera in via Solferino, which paid its first dividend in 2007 and increased it by 23,4% in five years. Today the coupon yields 5,48%. But also to kkr, the private equity fund that is setting up the loan portfolio being restructured with Unicredit and Intesa Sanpaolo, which yields as much as 8,22%.
