Buffet's 50% Yield

Billionaire investor Warren Buffett is well-known for his focus on companies with strong earnings that pay good dividends. At the same time, he doesn't care much about share prices -- except when he's buying. Buffett's investment style is as far as away as you can get from the aggressive, heavy-trading approach pioneered by hedge funds -- but his returns are far more consistent and much easier for investors like you and I to replicate. Here's the secret.

One of Buffett's most famous long-term holdings is his 8.9% stake in�The Coca-Cola Company. The $15 billion shareholding is the largest holding of Buffett's company, Berkshire Hathaway, and most of it dates back to 1988, when Berkshire spent $1 billion to acquire a 6.2% stake at an approximate cost, adjusted for splits and dividends, of $3.75 per share. Back in 1988, Coke shares offered a yield of 4% -- decent, but not remarkable. Since then, the company has maintained its 50-year unbroken record of annual dividend increases. The result is that in 2011, the dividend payout was $1.88, providing Buffett with a massive 50% yield on his original investment.

Source: MSNBC

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