Warren Buffett Earns a 50% Annual Dividend On This Stock
It's well-known that Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) doesn't pay a dividend, and hasn't since Warren Buffett founded the conglomerate in 1965. The thinking goes, instead of paying out cash to shareholders (which is then taxed), Berkshire's cash is better in Buffett's hands, which he can redeploy into new businesses, whether public or private. Judging by the company's unmatched track record for 56 years, that seems like a pretty sound policy.
However, that doesn't mean Buffett himself doesn't love dividend stocks. In fact, most of Berkshire's top holdings pay ample and growing dividends to Berkshire every quarter, which Buffett can then redeploy. And since Buffett is well-known for holding his favorite stocks "forever" in an ideal world, dividend growth stocks can generate unbelievable payouts with the benefit of time, providing a lesson to us about the miracle of compounding growth.
In fact, one of Buffett's most famous investments now pays Berkshire a 50% annual dividend yield on Buffett's initial investment. Not only that, but it's in one of the safest stocks around.
Source Fool.com
