94.34 0.00 (0.00%)
After hours: 4:47PM EDT
|Bid||94.14 x 800|
|Ask||94.14 x 38800|
|Day's Range||93.01 - 94.36|
|52 Week Range||69.68 - 96.10|
|Beta (3Y Monthly)||1.03|
|PE Ratio (TTM)||14.91|
|Earnings Date||Oct 22, 2019 - Oct 28, 2019|
|Forward Dividend & Yield||0.69 (0.72%)|
|1y Target Est||86.67|
Earlier this year marked 52 years since Warren Buffett first bought into the insurance industry. His initial foray was modest, by current standards; he paid $8.6 million dollars to acquire National Indemnity. On the surface, it didn’t look like such a great deal. National was worth $6.7 million, so Buffett paid a premium of $1.9 million to control the company. But controlling the company was not his main goal.What Buffett was really after was National’s float – the cash the company controlled as a result of the natural lag between receiving premiums and paying policies. At the time, National Indemnity controlled $19.4 million in float – that is, it had collected that much in premiums and had not yet received customer claims against it. In controlling the company, Buffett controlled the float. Instead of putting it into safe, low-yield investments – as insurers usually did – Buffett started on his current path, of investing other people’s money into higher-yielding investments. The capital was the customer’s, of course, but the profits on it were Berkshire Hathaway’s (BRK.B – Get Report).National Indemnity remains, to this day, a subsidiary of Berkshire Hathaway. Buffett prefers owning or controlling insurance companies outright, rather than investing in the stock, as ownership comes with control of the float – and Berkshire’s float totaled $114.5 billion at the end of 2017. Some of that money, however, gets invested in insurance companies, and there are currently two insurers in Buffett’s portfolio.We’ve dipped into TipRanks’ Stock Screener database to find out where some of Buffett’s favorite ‘float’ stocks stand in today’s market. Globe Life, Inc.Formerly known as Torchmark, the company changed its name and stock ticker in August of this year to become Globe Life (GL – Get Report). Globe Life is a holding company, owning in its turn a variety of life and health insurance providers. It’s a microcosm of Buffett’s own attitude toward the insurance industry – control the companies that sell the policies, and in your turn control the float.Globe Life, as an investment, is a good fit for Warren Buffett. He has held the stock since 2001, and has enjoyed the 10.5% annualized return it has brought in. GL pays out a modest but reliable dividend of 0.73%, paying 69 cents per share annually. The stock has appreciated 84.7% in the last five years, and is up 27% year-to-date.So, the long-term fundamentals of the stock look healthy, which is what Buffett has always said he looks for in an investment. In an oft-quoted quip, Buffett says, “Our favorite investment horizon is forever.” The most recent review, however, doesn’t rate the stock as highly. GL holds a Moderate Sell rating, and the average price target of $86 suggests a 9% downside from the current share price of $94.Despite the low rating, GL continues to be a solid performer in its industry. In its last reported quarter, the company showed EPS of $1.67, a 1.2% positive surprise from the $1.65 forecast and a 5% increase from the year-ago quarter. Sales were also robust, adding 4% in Q2. In short, the fundamentals show why Buffett continues to own over 6.35 million shares of GL, worth more than $568 million. Travelers Companies, Inc.With Travelers, we get to the second largest casualty insurer in the US, and the third largest underwriter of personal insurance. Travelers (TRV – Get Report) is an industry leader and blue chip giant of the stock market, and the company’s stock performance shows why Buffett has invested over $890 million in 5.9 million shares.TRV is up 22% year-to-date, notably higher than the S&P 500’s 19% gain, and the five-year gain is an impressive 75%. Like most of the stocks that Buffett keeps, TRV pays out a dividend, 2.23% with an annualized payment of $3.28 per share. Travelers has been a Berkshire investment since 2018, but expect Buffett’s company to hold this stake for the long haul. Berkshire Hathaway is already Travelers’ seventh largest investor, with 2.3% of the company’s stock.A weak second quarter pushed TRV shares down in the analysts’ estimation, and the stock currently gets a Hold from the consensus rating. 5-star analyst Mark Dwelle, of RBC Capital, described the company’s situation after the Q2 report: “The quarter was weighed down by higher commercial auto severity and non-catastrophe weather-related claims, even though neither is seen as a significant drag for Travelers' future quarters.” Dwelle gave TRV a hold, but raised his price target by 10% to $160. His target suggests an 8.8% upside to the stock.Shares in TRV are selling for $30.03, and the average price target of $158 gives the stock an upside potential of 8%. Bank of America CorporationInsurance companies are not the only industry that rides on float. Banks, which take customer deposits and hold them until they are withdrawn, are the essence of float. And Buffett has long placed them among his favorite holdings. Per the most recent 13F filing, Berkshire Hathaway’s largest bank holding is Bank of America (BAC – Get Report). Buffett owns 927,248,600 shares of BAC, worth an estimated $26.89 billion. The bank makes up 12.92% of Berkshire’s portfolio.BAC stock has shown solid gains in recent years, appreciating 91% on the five-year horizon. The year-to-date gain is 22%. BAC shares pay out a 2.39% dividend, although the low share price keeps the payout to a modest 72 cents per share.Morgan Stanley analyst Betsy Graseck gives the stock a Buy rating with a $31 price target, saying, “BAC has the most efficient consumer bank in our coverage with an expense ratio of only 45%. The consumer division has generated 1400bp of improvement in the expense ratio over the past five years as it has driven up revenues while bringing expenses down.” Her target implies an modest upside of 3%.Weighing in from Oppenheimer, Chris Kotowski was more bullish. He increased his price target from $42 to $43, suggesting an impressive 42% upside potential to the BAC.Overall, BAC shares have a Moderate Buy rating, based on 4 buys and 3 holds given in the past three months. Shares are selling for $30, and the $34 average price target implies an upside potential of 13%.Visit TipRanks’ Trending Stocks page, and find out what stocks have Wall Street’s undivided attention.
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly...
If Warren Buffett does one thing right, it has to be his ability to pick stocks that will deliver through thick and thin. Buffett's entire M.O. is based on long term investing -- choosing stocks that deliver steadily rising revenues/profits, holding them for decades, and collecting a big pile dividend checks along the way. This simple strategy has helped the Oracle of Omaha become one of the world's richest human beings and constantly generate gains for Berkshire Hathaway (NYSE:BRK.B).However, the economy hasn't always cooperated with Buffett. Over his long investing career, the U.S. economy has experienced plenty of ups and downs.But for the Oracle, this hasn't been a problem. The key for many Warren Buffett stocks comes down to their quality. Buffett only focuses on those firms with low debt, strong cash flows, rising sales, and top-notch management teams. This allows them to perform well even during recessions. While their share prices may falter a bit, their underlying businesses won't. That helps Buffett sleep well at night.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Discount Retail Stocks to Buy for a Recession And it can help you sleep well at night as well. With the economy getting dicey, it makes sense to take a page out of his playbook and focus on quality. With that, here are five Warren Buffett stocks to hold through the next recession. M&T Bank Corporation (MTB)Source: Shutterstock There's no doubt that Warren Buffett loves banks. He has stakes in several major ones including Bank of America (NYSE:BAC) and PNC (NYSE:PNC). But one of the most conservative could be M&T Bank (NYSE:MTB). Buffett has held shares in MTB since 2001.MTB isn't a super well-known bank. However, it's no slouch and is a large regional operator with assets in New York, Maryland, and Pennsylvania, as well as Washington, D.C. This super-regional status of 750 branches focused on some of the nation's best state economies has allowed M&T to benefit from strong loan demand and growing deposit base.The reason why M&T is such a great bank to hold during downturns comes down to its business model. The firm simply doesn't mess with "risky stuff." There's no prop trading like BAC, risky mezzanine loans or subordinated debt on its balance sheet. Just regular, boring banking.But that has been great for MTB shareholders. Because of this, M&T has been a rock star during recessions. In fact, during the last recession, the firm saw some of the lowest percentage credit losses among its peers. Moreover, it was only one of two banks in the S&P 500 that did not cut its dividend.Going back further, MTB has not posted a loss in 171 consecutive quarters. The best part is that even with things getting dicey and rates falling, M&T still managed to realize net interest margin improvements last quarter.Given its history and conservative run nature, M&T might be one of the safest stocks in Warren Buffett's entire portfolio. Moody's (MCO)Source: Daniel J. Macy / Shutterstock.com One of the tenants of almost all Warren Buffett stocks is an irreplaceable moat. That is, a company offers something that no one else does and not many consumers can do without. Moody's Corporation (NYSE:MCO) is a perfect example of that.MCO provides credit ratings, research, and risk analysis services for investors, banks and government agencies. Much like your credit score, this rating is a vital component for determining creditworthiness. In fact, a company can't issue a bond without a ratings agency giving it the go-ahead. This includes Warren Buffett and Berkshire's many subsidiaries themselves. And considering that there are only three main ratings agencies around, Moody's is in a very enviable position.MCO features relatively low overhead and cost of doing business. This creates a very high-profit margin. Last quarter, Moody's pulled in a whopping $4.5 billion in revenues and managed to score a high 57.5% profit margin from these sales.This high margin is worth buying MCO stock alone. However, the story could get better for Moody's if a recession hits. That's because investors will need to rely on data and risk analysis, even more to help uncover potential problems or values. If a firm wants to raise funds during the downturn, it'll have to tap MCO whether they like it or not. * 10 Battered Tech Stocks to Buy Now Thanks to this moat and need, Moody's could be one of the best Warren Buffett stocks to own during the recession. Coca-Cola (KO)Source: phloxii / Shutterstock.com Of all the stocks in Warren Buffett's portfolio, Coca-Cola (NYSE:KO) seems like the obvious recession-resistant play. After all, the consumer staple features plenty of steady demand and its products are enjoyed by millions of people each and every day. I'm drinking a Cherry Coke right now while writing this. This steadfast nature has served KO through thick and thin. Moreover, it's rewarded shareholders with 55 years' worth of dividend increases.So yes, Coca-Cola is a boring play and has everything you'd want to ride out the recession.The kicker is, there's plenty of growth under the hood of KO as well. This comes from new moves into healthier beverages. Times are changing and not everyone wants a surgery soda. As a result, sparkling water, juices, teas, and other healthy drinks are now a priority at Coke. These items come with some decent margins and now sales for these products account for about half of KO's total pie.KO is even getting big into data mining and artificial intelligence. Every time you create a combination on one of its Freestyle machines, pick up a six-pack of juice, you're creating plenty of user data. And now, KO has partnered with several tech firms to start digging into that data. This already helped create new flavor combos like Orange Vanilla Coke as well as provide insight into consumer behavior. It's an edge that KO can use down the road to keep revenues going, predict trends and ultimately, reward shareholders even during a recession.All in all, KO has a great combination of boring and exciting attributes. Globe Life (GL)Source: Shutterstock Warren Buffett is fanatical about the insurance industry and many firms are top stocks in Berkshire's portfolio. It's easy to see why. Property and casualty insurers collect payments for policies. The beauty is that they don't have to pay the money back unless there is a claim.However, insurers don't just sit on that money. They invest it and this "float" and interest earned on that float can provide plenty of dividends and cash for the insurance firm. In fact, the reason why Berkshire Hathaway has been so successful is that its insurance operations, like GEICO, provide so much return on their floats. Of these insurance names, Globe Life (NYSE:GL) could be an interesting choice.Formally known as Torchmark, Buffett has owned GL shares since 2001 and the insurer has been a good bet. Globe Life is one of the nation's largest life insurance agencies. The key to that comes from its staggered rate term policies. Rather than have the same premium cost for the entire 10 or 20 years, GL policy premiums reset every five years or so as holders move into different age brackets. Moreover, Globe Life also offers many low death-benefit policies versus rivals. This has allowed GL to scale up in size.It has also allowed Globe Life to be pretty profitable. Last quarter continued that trend with EPS jumping more than 5%, while sales increased by 4%. Meanwhile, GL saw some big gains on its investment portfolio and float. * 10 Healthcare Stocks to Buy Despite the Headlines With longs operating history -- since 1900 -- long dividend history, and conservative approach to investments, GL could the sleeper insurance stock in Buffet's portfolio. Amazon (AMZN)Thanks to the insight of many of his lieutenants, Buffett has begun to move into the world of technology. And that includes a stake in one of the best firms around: Amazon (NASDAQ:AMZN).Source: Eric Broder Van Dyke / Shutterstock.com AMZN continues to be the leader in ecommerce and has used its very profitable cloud-computing assets to help drive its retail operations. This has resulted in lower prices for consumers, faster shipping times, and an overall better experience. And Amazon is not done yet. The firm continues to find new ways of making money from advertising and its own gadgets.As a result, AMZN throws off a lot of cash. That's probably what drove Buffett into the stock in the first place.But as a recession play, AMZN has a lot to offer. When money gets tight, consumers generally trade down to private label brands. Amazon now has hundreds of them that cost less than premium products. Moreover, the ability to take advantage of Amazon's lower-selling prices overall makes it a powerful money-saving retailer for consumers. On the corporate side, its AWS cloud division continues to offer money saving tools for business.In the end, the recession should damper Amazon's growth potential. That makes it a powerful player in Buffett's portfolio.At the time of writing, Aaron Levitt held a long position in AMZN stock. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post 5 Great Warren Buffett Stocks to Hold Through the Next Recession appeared first on InvestorPlace.
MCKINNEY, Texas , Sept. 3, 2019 /PRNewswire/ -- Globe Life Inc. (NYSE: GL) announced that its Board of Directors has declared a quarterly dividend of $0.1725 per share on all of the outstanding common ...