Tags: CNBC | Buffett | Bet | Energy

CNBC: Warren Buffett Moves Toward a Bigger Bet on Energy

By    |   Sunday, 13 July 2014 07:29 PM

Warren Buffett appears to be shifting into energy stocks in a bigger way, according to CNBC.

The sector is no stranger to him – after all, his top holding, Burlington Northern Santa Fe Railway, is a major shipper of Western coal and Bakken shale oil – but that’s more of an indirect play on energy.

However, CNBC said Buffett disclosed at the recent Edison Electric Institute annual conference that Berkshire is doubling its $15 billion bet on wind and solar power through its wholly-owned Berkshire Hathaway Energy unit.

Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000

In addition, recent filings show Berkshire Hathaway has also built positions in
Exxon Mobil, oil services company National Oilwell Varco and oil-sands driller Suncor Energy.

Berkshire’s latter two investments are small enough that CNBC speculated Buffett’s lieutenants pulled the trigger on those purchases.

“The Exxon Mobil stock purchases, though, valued at roughly $4 billion at the time of Berkshire's last quarterly stock filing, would have to be put on Warren's desk—or emanate from his desk—before being approved.”

Exxon Mobil is now believed to be Buffett’s seventh largest stock investment.

Berkshire Hathaway Energy is owner of everything from utilities to gas pipelines to the $15 billion worth of solar and wind investments, already making it Berkshire's biggest commitment to any industry save insurance.

Berkshire’s growing energy portfolio includes NV Energy, the largest utility in Nevada, for which it paid nearly $6 billion last year.

“On a global basis, energy is still a growth industry. There are growth markets for energy – it’s slow but it marches on,” said Lysle Brinker, a director at HIS Energy.

Buffett may have headlined his interest in energy in general and in Exxon Mobil in particular as far back as his 2011 annual investor letter. In that letter, CNBC said he opined that either farmland or Exxon Mobil would make better investments than gold because they produced things rather than merely relied on shifting investor demand.

On Seeking Alpha, Dividend Growth Investor said the miracle of compounding interest is evident in Buffett’s portfolio.

It estimated Berkshire’s 400 million shares of Coca-Cola entitles it to $122 million in quarterly dividends – translating to about $928 per minute in dividend income from the beverage company alone.

“This is a testament to the power of long-term dividend investing, where time in market is the investors best ally, not timing the market,” according to Dividend Growth Investor.

Incidentally, Exxon Mobil pays a 2.69 percent dividend – close to the 2.91 percent from Coca-Cola.

Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000

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Warren Buffett appears to be shifting into energy stocks in a bigger way, according to CNBC. The sector is no stranger to him - after all, his top holding, Burlington Northern Santa Fe Railway, is a major shipper of Western coal and Bakken shale oil.
CNBC, Buffett, Bet, Energy
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2014-29-13
Sunday, 13 July 2014 07:29 PM
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