Warren Buffett holds these stocks for huge free cash flow – with

Warren Buffett holds these stocks for huge free cash flows - inflation is close to 40 years high, you should too

Warren Buffett holds these stocks for huge free cash flows – inflation is close to 40 years high, you should too

Wall Street pays a lot of attention to the company’s revenue.

But reported earnings are often used through aggressive or even fraudulent accounting methods.

This is why risk-averse investors need to focus on companies that make free cash flow gobs.

Cold, hard cash real, and shareholder-friendly management teams can use:

Warren Buffett, a legendary investor and CEO of Berkshire Hathaway, is best known for his love of the cash flow generating business.

Let’s take a look at three stocks in Berkshire’s portfolio that boast a double-digit free cash flow margin (free cash flow as a percentage of sales).

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Chevron (CVX)

At the top of our list is oil and gas giant Chevron, which has generated $ 21.1 billion in free cash flow over the past 12 months and has consistently posted a free cash flow margin of 11% on Ballpark.

Shares have been heating up in recent months on strong rebound in energy prices, but there may be plenty of room to run as inflation continues to heat up.

Management has begun to embrace recent initiatives to reduce costs and improve efficiency and should be able to fuel shareholder-friendly measures for the foreseeable future.

In March, Chevron announced that it would double its share buyback to 10 10 billion a year, promising that shareholders would see the benefits of higher oil prices.

The stock is still offering an attractive dividend yield of 3.4%.

Moody’s (MCO)

With a free cash flow margin of over 30%, Credit Rating Leader Moody’s is next on our list.

Despite the recent weakness, Moody’s shares have risen 145% over the past five years, suggesting that it is like betting on a relatively recession-resistant business.

In particular, the position of the company’s well-established leadership in the credit rating, which leads to excessive cash flows and returns on capital, should limit the long-term negative side of Moody’s.

Moody’s created about $ 1.8 billion behind twelve months of free cash flow. And in 2021, the company repaid $ 1.2 billion to shareholders through share repurchases and dividends.

Moody’s has a dividend yield of 1.0%.

Coca-Cola (KO)

Our list includes beverage giant Coca-Cola, which has made $ 7 billion in twelve months of free cash flow and traditionally offers free cash flow margins above 20%.

The stock has seen a lot of ups and downs in recent months, but patient investors should take advantage of the short-term uncertainty. Coca-Cola’s long-term investment is being supported by the presence of an unparalleled brand, extensive efficiency and still-attractive geographical growth by Telwind.

And the agency is back to work at the pre-epidemic level.

In the most recent quarter, Coca-Cola earned 10.5 billion, up 16% from a year earlier, largely driven by an 8% increase in unit case volume.

Coca-Cola shares offer a dividend yield of 2.9%.

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This article provides information only and should not be construed as advice. It is provided without any warranty.

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