While legendary investor Warren Buffett owns financial stocks stocks as Goldman Sachs (NYSE: GS), American Express (NYSE: AXP), Bank of America (NYSE: BAC), and U.S. Bancorp (NYSE: USB), Wells Fargo (NYSE: WFC) is his largest position in that sector.
Unsurprisingly, given the relative size of Buffett's position, Wells Fargo is the superior stock.
Big Profits, High Yield, Good Beta
Wells Fargo has a stunning profit margin of more than 40 percent. For Bank of America, it is just above 13 percent. American Express has a profit margin of 15.50 percent. Better still, Wells Fargo shares those profits with shareholders.
Related Link: Consider Buying Coca Cola On The Dip For Long Term Gains
Wells Fargo has a dividend yield of 2.69 percent. The dividend yield for Goldman Sachs is only 1.27 percent. U.S. Bancorp has a dividend yield of 2.33 percent. Wells Fargo also has a history of dividend growth that rewards long-term shareholders.
Suiting Buffett's style of investing, Wells Fargo is a stock to buy for the long term. It is well positioned to grow with the American economy as America comes out of the Great Recession. The beta is above average, so there is the opportunity to buy on the dips, which increases the dividend yield and enhances the long term overall return.
See more from Benzinga
- 3 Reasons To Invest In MLPs
- 3 Sectors That Should Fear China
- 3 Companies That Should Benefit From The New Initiative In Africa
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.