By Weston Blasi
Apple said it will increase its cash dividend by 4%, which is good news for Warren Buffett's company, which owns about 790 million shares
Warren Buffett's Berkshire Hathaway Inc. is set to become one of the biggest beneficiaries of Apple's new dividend.
Buffett, the CEO of Berkshire Hathaway, famously loves stocks that pay dividends to shareholders and therefore probably liked Apple Inc.'s (AAPL) announcement last week it will increase its cash dividend by 4%, to 25 cents a share.
During Berkshire's (BRK.B) annual meeting on Saturday, the company reported that its investment in Apple was $135.4 billion, implying around 790 million shares. That amount is down from the 905 million shares of Apple that Berkshire owned at the end of last year, according to the company's latest 13-F filing with the Securities and Exchange Commission.
Apple was still Berkshire's largest holding at the end of the quarter.
The 790 million shares of Apple stock that Buffett and Berkshire now own would provide a $198 million quarterly dividend payment after the Apple hike, compared with the roughly $190 million quarterly it would have seen if Apple hadn't hiked the dividend. That's an increase of about $32 million for the year if Berkshire keeps its position constant.
See also: Berkshire Hathaway has $189 billion in cash. Elon Musk has an idea how Warren Buffett should spend it.
At Berkshire's annual meeting on Saturday, Buffett was asked whether his company's trimmed Apple holdings meant his views on the company have changed since he first invested in 2016.
"No, I wouldn't... but we have sold shares [of Apple Inc.], and I would say that at the end of the year, it'd be extremely likely that... Apple is the largest common stock holding we have now," Buffett said.
"One interesting thing is Charlie and I looked at common stocks... as being businesses.. When we look at Coca-Cola, American Express (AXP) and Apple, we look at them as businesses. We have no attempt made to predict markets, and we have no attempt made to pick stocks."
Whether Berkshire's Apple position has stayed the same size is a topic of interest on Wall Street. Apple shares have faced downbeat sentiment this year, prompting some speculation that Buffett and his team might have done some selling after making good money on their Apple bet in recent years.
Apple shares have lagged the broad market so far this year, falling 5.74% as the S&P 500 SPX has risen 8.95%.
The 93-year-old known as the Oracle of Omaha is seen as one of the most accomplished investors in history. He conducted Berkshire Hathaway's annual meeting on Saturday for the first time without Charlie Munger, the company's former vice chairman, who died in November.
Other dividend-paying companies that Buffett owns stock in include Coca-Cola Co. (KO), Kraft Heinz Co. (KHC) and Chevron Corp. (CVX).
In addition to announcing the dividend increase on Thursday, Apple reported a 10% year-over-year decline in iPhone sales, upped its stock-buyback program by $110 billion and soothed some investor concerns about its business in China.
Read on: Apple refreshes iPad Air and iPad Pro lineups - while talking up AI
Emily Bary contributed.
-Weston Blasi
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05-07-24 1425ET
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