Buffett's Wal-Mart investment is paying off
Recently, but, investors have jumped on the Wal-Mart bandwagon. The stock has increased 21% year-to-date, approaching fair value and making Warren Buffett a richer man.
Wal-Mart's revenue has increased each consecutive year, including through the recession, for the last decade, to a record $447 billion in fiscal 2012. Its gross margin has as well been on a widening trend.
The retail giant continues to increase its dividend
The retail giant continues to increase its dividend. In March, its board approved an increase from $1.46 to $1.59 per share in fiscal 2013, an equivalent of paying about $5.52 billion. This continues the company's history of increasing its dividend every year since 1974. Last year, it raised its dividend 20.7%. The company as well bought back $6.3 billion worth of shares in fiscal 2012.
On Friday, shares of Buffett's company, Berkshire Hathaway(BRK.B), rallied too, to their 16-month high. The stock is up more than 10% year to date to $126,234 for one share. On May 4, Berkshire announced improved operating revenues of $2.7 billion, up from $1.6 billion in the first quarter of 2011. Net revenues were $3.2 billion, up from $1.5 billion the prior-year quarter, marking the third consecutive year of increases.
In an interviewwith CNBC, Buffett said he was more concerned that the U.S. economy is shrinking and growth slowing as consumer spending begins to sow and affect businesses. This could be pushing investors toward "safer" stocks of large companies. Buffett as well believes that housing is picking up, which would benefit Berkshire, which owns the largest home builder, Clayton Homes.
Buffett says he is all in all optimistic about the economy despite the slowdown. "I love owning businesses in the United States. We'll invest $9 billion nearly in the United States at Berkshire this year. I am a bull on America. We have to run it right, that's all,” he said.
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The market as well jumps on hopes China will move to stimulate its economy. JPMorgan's big trading loss is however $5.8 billion, now the bank sees record 2012 profits. Wells Fargo profit surges thanks to its big mortgage business.
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