Shares of International Business Machines (IBM) fell 5% on
Wednesday, April 19, after the company posted a disappointing first-quarter
earnings report.
Legendary investor Warren Buffett took a big hit from IBM’s
decline. His investment conglomerate Berkshire Hathaway (BRK-B) is IBM’s
largest shareholder.
At the end of 2016, Berkshire held 81.2 million shares of
IBM, good for 8.5% of the company’s share count. Berkshire’s investment is
worth approximately $13 billion. IBM is one of Buffett’s highest yielding
holdings. After the 5% decline, Berkshire’s investment in IBM lost roughly $800
million in value.
IBM is a high-quality dividend stock. It is a Dividend
Achiever, a group of 265 stocks with 10+ years of consecutive dividend
increases. You can see the full Dividend Achievers List here. With four more
years of dividend increases, IBM will join the ranks of the Dividend
Aristocrats, a group of companies in the S&P 500 that have raised dividends
for 25+ years.
Despite the one-day drubbing, Buffett likely has no
intention to sell IBM—and neither should you.
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