Warren Buffett Dividend Quotes

There are essentially five things public corporations can do with a dollar earned: reinvest in the business, acquire other businesses or assets, pay down debt, pay dividends, and/or buy in shares. Deciding

automatically compound. If you need cash, you can sell stock and pay capital gains tax at a lower rate than a dividend would be taxed.

If the widget company consistently earned a superior return on capital throughout the period, or if capital employed only doubled during the CEO’s reign, the praise for him may be well deserved. But if return on capital was lackluster and capital employed increased in pace with earnings, applause should be withheld. A savings account in which interest was reinvested would achieve the same year-by-year increase in earnings—and, at only 8% interest, would quadruple its annual earnings in 18 years. The power of this simple math is often ignored by companies to the detriment of their shareholders. Many corporate compensation plans reward managers handsomely for earnings increases produced solely, or in large part, by retained earnings—i.e., earnings withheld from owners. For example, ten-year, fixed-price stock options are granted routinely, often by companies whose dividends are only a small percentage of earnings. An example will illustrate the inequities possible under such circumstances. Let’s suppose that you had a $100,000 savings account earning 8% interest and “managed” by a trustee who could decide each year what portion of the interest you were to be paid in cash. Interest not paid out would be “retained earnings” added to the savings account to compound. And let’s suppose that your trustee, in his superior wisdom, set the “pay-out ratio” at one-quarter of the annual earnings.

it appears the company has a strong competitive position with a favorable long-term outlook, you would next run several dividend discount models that include different growth rates of the company’s owner earnings over different time periods to get a sense of approximate valuation. Then you would study and understand management’s long-term capital allocation strategy. Last, you might call a few friends, colleagues, or financial advisers to see if they have an opinion about your company or, better yet, your company’s competitors. Take note: None of this requires a high IQ, but it is more laborious and requires more mental effort and concentration than simply figuring out the company’s current price-to-earnings ratio.

Legg Mason was a value shop, and its training program emphasized the classic works on value investing, including Benjamin Graham and David Dodd’s Security Analysis and Graham’s The Intelligent Investor. Each day, the firm’s veteran brokers would stop by and share their insights on stocks and the market. They handed us a Value Line Investment Survey of their favorite stock. Each company possessed the same attributes: a low price-to-earnings ratio, a low price-to-book ratio, and a high dividend yield. More often than not, the company was also deeply out of favor with the market, as evidenced by the long period the stock had underperformed the market. Over and over again, we were told to avoid the high-flying popular growth stocks and instead focus on the downtrodden, where the risk-reward ratio was much more favorable.

If this was a business, it would do one of two things with the $3.00 of earnings per share: pay a portion of the earnings to the shareholder (known as a dividend) or retain the money as equity (therefore, the $25.60 of book value would increase). Like

still pay taxes on dividends regardless of the length of ownership.)

To summarize, a great business will show the following characteristics in its financial statements: Earnings show a smooth upward trend Consistent return on equity (ROE) greater than 20% Consistent return on total capital (ROTC) greater than 15% Long-term debt less than 4 times earnings Pays a dividend and/or buys back stock

Security Analysis” by Benjamin Graham, “The Single Best Investment” by Lowell Miller, “The Snowball Effect” by Timothy J McIntosh, “Berkshire Hathaway Letters to Shareholders” by Warren Buffett and Max Olson, “The Ultimate Dividend Playbook: Income, Insight and Independence for Today’s Investor” by Morningstar and Josh Peters.

I’d long opposed my predecessor’s signature domestic legislation, laws passed in 2001 and 2003 that changed the U.S. tax code in ways that disproportionately benefited high-net-worth individuals while accelerating the trend of wealth and income inequality. Warren Buffett liked to point out that the law enabled him to pay taxes at a significantly lower rate—proportionate to his income, which came almost entirely from capital gains and dividends—than his secretary did on her salary. The laws’ changes to the estate tax alone had reduced the tax burden for the top 2 percent of America’s richest families by more than $ 130 billion.

O ponto de partida está em observar a relação entre Preço e Lucro da Ação, o famoso P/L. Quando esta relação está abaixo de 20, podemos começar a prestar atenção na empresa. Abaixo de 15: “Opa! Está ficando interessante!”. Abaixo de 10 pode ser uma oportunidade clara, mas abaixo de 5, preste atenção, pode ser um negócio arriscado. Obviamente, este fator não pode ser observado isoladamente. O P/L deve estar conciliado com uma boa Rentabilidade sobre o Patrimônio Líquido (RPL) ou Return On Equity (ROE). Acima de 10% seria ideal, mas para começar, 8% já seria um bom indicativo. De pouco adianta a empresa ter boa rentabilidade se ela não reparte parte dos lucros com seus acionistas, então o Dividend Yield também deve ser considerado na análise. Para Décio Bazin, autor do livro “Faça Fortuna com Ações”, um DY mínimo de 6% é o recomendável. Vale lembrar que estamos traduzindo Buffett e Munger para a realidade brasileira. Um quarto aspecto fundamental para iniciar uma análise de investimento é observar o grau de endividamento da companhia. Uma empresa que deve mais do que o valor do próprio patrimônio líquido, deve ser evitada. Neste