Dividends4Life: Warren Buffett's Best Dividend Stock for 2016

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Warren Buffett's Best Dividend Stock for 2016

Posted by D4L | Saturday, January 02, 2016 | | 0 comments »

One of the ways Warren Buffett built Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) into the $330 billion behemoth that it is today was by investing in outstanding dividend-paying businesses. These companies throw off enormous amount of cash, which the legendary investor can then reinvest in more shares of income-producing businesses, which, in turn, generate more cash. It's a virtuous cycle that has benefited Berkshire Hathaway and its shareholders for decades. Fortunately, individual investors can implement this highly effective wealth-building strategy in their own portfolios. Even better, one of Buffett's current holdings appears particularly well positioned to deliver handsome returns for investors in 2016 -- and beyond.

With the Federal Reserve recently raising interest rates for the first time in nearly a decade, and more rate hikes expected in the year ahead, many investors are fearful that stock returns will be muted in 2016. There are, however, some businesses that are poised to benefit from the prospect of higher interest rates.In fact, Wells Fargo (NYSE:WFC) -- which is Buffett's largest holding and comprises nearly 20% of Berkshire Hathaway's publicly traded stock portfolio -- may be the ideal stock to buy in the current uncertain market environment. Wells Fargo's diverse business lines tend to hold up relatively well through different interest-rate cycles.

Source: Motley Fool

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