Surprise: Warren Buffett Dumps 3 Blue Chip Stocks With Huge Dividends

Investing

Published: August 19, 2022 7:24 am

Last Updated: September 13, 2022 7:12 am

If any investor has stood the test of time, it is Warren Buffett. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world. His annual Berkshire Hathaway shareholders meeting draws literally thousands of loyal fans who are investors. Known for his long buy-and-hold strategies and his massive portfolio of public and private holdings, he remains one of the preeminent investors in the world.
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One reason for Berkshire Hathaway’s stunning success over the years is that Buffett and his right-hand man, Charlie Munger, have always tried to stay with stock ideas they understand. That has proven to be a winning hand. In addition, many of the companies in their portfolio pay solid and reliable dividends.

Given the buy and hold strategy of Berkshire Hathaway, we were surprised recently when Buffett unloaded four top stocks, three of which pay substantial dividends. Long-time investors and Buffett mavens are familiar with his quote that “His favorite holding for an S&P 500 stock is forever.” So, the sales were somewhat surprising.

Despite the sales by Berkshire Hathaway, all four of the companies are still rated Buy on Wall Street. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

General Motors

This is the one stock out of the four that does not pay a dividend, and the venerable car and truck giant is expected to be a big electric vehicle player. General Motors Co. (NYSE: GM) designs, builds and sells trucks, crossovers, cars and automobile parts and accessories globally. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun and Wuling brand names.

GM sells vehicles, including purpose-built vehicles, to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments.

In addition, it offers safety and security services for retail and fleet customers, including automatic crash response, emergency services, roadside assistance, crisis assist, stolen vehicle assistance, and turn-by-turn navigation. Its connected services comprise mobile applications for owners to remotely control their vehicles and electric vehicle owners to locate charging stations, on-demand vehicle diagnostics, smart driver, marketplace in-vehicle commerce, in-vehicle voice, voice assistant, navigation and app ecosystem, connected navigation, SiriusXM with 360L, and 4G LTE wireless connectivity.