Berkshire Hathaway and Exxon Mobil
Berkshire Hathaway said in its year end letter that it increased its ownership interest last year in each of its “Big Four” investments—American Express (AXP), Coca-Cola (KO), IBM (IBM), and Wells Fargo (WFC). It also bought shares in Exxon Mobil (XOM), DaVita HealthCare Partners (DVA), Liberty Global (LBTYA), and Goldman Sachs (GS).
Berkshire Hathway increased its position in Exxon Mobil (XOM) by 1,040,272 shares in the fourth quarter. The position currently accounts for 3.97% of Berkshire Hathaway’s portfolio.
We reported last year in an article on our website titled “Why Warren Buffett’s XOM purchase can affect your portfolio” that in 3Q, Berkshire Hathaway filed a document with the U.S. Securities and Exchange Commission (the SEC) that showed the company had acquired 40.1 million shares of Exxon Mobil at a value of $3.45 billion.
Exxon reported diluted earnings per share of $1.91 in 4Q13, compared to consensus of $1.92. EPS in 4Q13 were up from 3Q13 EPS of $1.79, and down from 4Q12 EPS of $2.20. However, it’s important to note that a large part of the earnings was from a gain on asset sales that wasn’t factored into analysts’ estimates. Without the effect of certain non-recurring items in the quarter, Exxon’s EPS would have been $1.76. Generally, Exxon underperformed expectations on less-than-expected oil and gas production—particularly from international assets.
Exxon Mobil is one of the top dividend-paying stocks, with a robust quarterly dividend history. Amid lingering concerns about production levels and recent earnings declines, the Texas-based company declared a quarterly dividend of $0.63 per share, or $2.52 annualized.
Exxon is one of the largest companies in the entire universe of publicly traded equities, with a long and profitable history and a proven ability to generate significant cash flow.