Almost 17% of Berkshire Hathaway's $328 Billion Portfolio Is Invested in 1 Top Stock That's Up 180% in 5 Years
Almost 17% of Berkshire Hathaway's $328 Billion Portfolio Is Invested in 1 Top Stock That's Up 180% in 5 Years
NASDAQ Stock Market | News Desk
However, more cautious investors might eschew the credit card giant's current valuation.
Berkshire Hathaway owns many different public equities, which combined make up its $328 billion portfolio.
Among them, there's one standout business whose shares have performed particularly well recently.
9, this financial stock's price is up 180% in the past five years.
By including the dividend, that figure is even higher at 198%.
Here's what investors need to know about American Express (NYSE: AXP), which has been a pillar in the Oracle of Omaha's portfolio.
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Apple has been the single biggest position for the conglomerate for a long time.
But after numerous share sales in the tech giant's shares over the past several quarters, the road has cleared for another industry-leading business to rise up the ranks.
Berkshire owns 22.1% of the outstanding shares of American Express.
That stake has gradually increased, now making up 16.5% of the portfolio.
That's because the payments enterprise continues to buy back its stock, which benefits the conglomerate with greater ownership.
If a business makes it into Berkshire's portfolio, you can be sure that Buffett and his team view that company highly.
Fitting one of Buffett's favorite qualities, Amex possesses a strong brand within the credit card industry.
The business offers premium cards that exude luxury and status.
They carry high annual fees, but come with a laundry list of perks, rewards, and benefits.
This is valuable to affluent customers, whose spending power directly leads to the company's financial success.
American Express has a history of raising its annual fees, indicating pricing power.
Delinquency and charge-off rates are also lower than the industry average.
As the economy steadily expands over time, more spending is happening.
Amex is also propelled by the rising penetration of cashless transactions.
Revenue (net of interest expense) climbed 120% in the past 10 years.
The leadership team set a goal of achieving 10% and mid-teens growth, respectively, for the top and bottom lines over the long term.
The stock's rise has contributed to what appears to be an expensive valuation.
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The Motley Fool has positions in and recommends Apple and Berkshire Hathaway.
