On topic: Verizon

My curiosity continues as to why Buffett (apparently it was his decison) bought Verizon. Anybody have thoughts as to this?

Dividend.
Very reasonably priced too and therefore additional upside potential.
I thought about it too to park cash.

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Dividend.
Very reasonably priced too and therefore additional upside potential.
I thought about it too to park cash.

Seems reasonable.
A bond substitute. Pays a coupon, and (in the eyes of the investor) won’t go bust or shrink in real terms.

But not a bond substitute just in the investment selection sense, but also in the literal sense: Berkshire used to hold bonds,
and basically doesn’t any more because they yields are too low. So a substitute is needed.

And of course, it’s a way to blow off some steam, as in the specific metaphor here
https://discussion.fool.com/with-buybacks-accelerating-and-no-ta…
(head of steam = cash buying power)

Of course, there’s also the obvious: maybe the boss thinks it’s a good investment.
If you take out all the one-time things (many probably truly one time), earnings have risen pretty well in recent years.
EPS up about 5%/year in the last 5 years.
Huge ROE, nice balance sheet, attractive valuation level, and that huge yield.
Top line growth is pretty much missing, but hey, it’s hard to get everything at once~~
Maybe the total return will be pretty decent. And at the very least that’s a pretty good list for a bond substitute.

Jim

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My curiosity continues as to why Buffett (apparently it was his decison) bought Verizon. Anybody have thoughts as to this?

I considered a similar investment - primarily as a replacement for fixed income. (if you can get a dividend yield of 4% that is better than a bond paying 1/2 that). However in my case I decided the optionality of cash was worth more and passed.

tecmo
…

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Verizon is a utility. That’s how I see it.

Dividend

yes ?

Predictability and a long lived business.
To me it shows Buffett is losing his edge. But I cannot deny it most likely satisfies rule #1.

BTW chompin I wasn’t trying to judge you or condemn you as you put it, for being born with a silver spoon. Everyone has a different story, that’s all.