This article is an excerpt from Barron’s 10 favorite stocks for 2022, published on Dec. 17. To see the full list, click here.
CEO Warren Buffett made his initial equity gift to the Bill & Melinda Gates Foundation in 2006, he wrote that Berkshire’s stock is an “ideal asset to underpin the long-term well-being of a foundation.”
“The company has a multitude of diversified and powerful streams of earnings, Gibraltar-like financial strength, and a deeply imbedded culture of acting in the best interests of shareholders.”
That’s still the case 15 years later.
The Class A stock (ticker: BRK.A), at about $454,550, is up 31% this year. Buffett refuses to pay a dividend, but Berkshire has ramped up its stock buybacks and should repurchase more than 4% of its shares this year. It trades for 1.35 times our estimate of year-end book value, a cheap level, given that its businesses are probably worth much more than their carrying values.
Berkshire’s stake in
(AAPL) alone is worth $160 billion, following the iPhone maker’s recent run-up.
|Company / Ticker||Recent Price||YTD Change||2021E EPS||2022E EPS||2022E P/E||Dividend Yield||Market Value (bil)|
|Amazon.com / AMZN||$3,377.42||4%||$41.11||$51.37||65.7||None||$1,713|
|AT&T / T||23.71||-18||3.38||3.17||7.5||8.8%||169|
|Berkshire Hathaway / BRK.A||454,550.00||31||17,466.30||18,928.50||24.0||None||673|
|General Motors / GM||58.39||40||6.73||6.93||8.4||None||85|
|Hertz Global Holdings / HTZ||21.01||-22*||4.02||2.55||8.2||None||10|
|IBM / IBM||125.93||5||10.05||11.04||11.4||5.2||113|
|Johnson & Johnson / JNJ||173.01||10||9.83||10.38||16.7||2.5||455|
|Nordstrom / JWN**||20.05||-36||1.27||1.99||10.1||None||3|
|Royal Dutch Shell / RDS.B||42.82||27||4.86||6.19||6.9||3.9||166|
|Visa / V***||214.37||-2||5.91A||7.04||30.5||0.7||467|
*Since July 1. **Estimates for Jan. 2022 and Jan. 2023 fiscal year ends. ***Sept. fiscal year end. E=estimate. A=actual.
Write to Andrew Bary at [email protected]