Airline operators are no longer trying to undercut one another to death in the name of expansion. Instead, they’re now attempting to add value through strong profitability, robust cash flows, and healthy capital returns in the form of dividends and share repurchases–things that Buffett has always adored. Of course, those are also qualities that I constantly advise our Income Investors readers to look for in a company. So with that in mind, let’s take a glance at each one of Buffett’s airline purchases for possible dividend stock opportunities.
Berkshire bought in as airline stocks were flying high, seemingly running counter to Buffett’s “buy low” mantra. Well, Buffett isn’t exactly waiting for a pullback to buy more. Because according to a recent 13F filing, Berkshire not only added to holdings of Delta Air Lines, Inc. (NYSE:DAL), United Continental Holdings Inc (NYSE:UAL), and American Airlines Group Inc (NASDAQ:AAL), but also purchased a new stake in Southwest Airlines Co (NYSE:LUV). That brings Berkshire’s total investment in major U.S. airlines to more than $9.0 billion. (Source: “Form 13F,” U.S. Securities and Exchange Commission, last accessed February 17, 2017.)
Source: Income Investor
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