Stefan Kühn: Warren Buffett's strategy of the moat - Focus on the returns of 'dividend aristocrats'

EQS-Media / 22.12.2023 / 12:11 CET/CEST

Warren Buffett and the moat - When 'dividend aristocrats' offer excess returns!
At a time when market volatility is increasing due to rising interest rates, the importance of dividend yields is coming to the fore. The economic outlook remains uncertain, prompting investors in particular to look for shares in companies that offer reliable and consistent dividends. Growth stocks, which are suffering from rising interest rates, are receding into the background, while high-dividend stocks are once again taking centre stage. Business economist and economist Stefan Kühn uses Warren Buffett's investment strategy to explain why these shares are considered 'moats and sharks in them' and how investors can benefit from the 'dividend aristocrats'. Stefan Kühn also discussed the latest developments on the financial markets, in particular the shift in investor interest towards companies with high dividend yields. This paradigm shift in investment strategy is due to rising interest rates and the associated uncertainty in the economy. Kühn emphasises that Warren Buffett's strategy, when he speaks of a 'moat and sharks in it', is an interesting starting point for understanding the strength and attractiveness of companies with stable dividend payouts.

Warren Buffett's concept of the 'moat'
Warren Buffett's 'moat' refers to companies that have sustainable competitive advantages that protect them from competition and enable them to generate high profits over the long term. These companies have a strong protective mechanism that secures their market position and maintains their profitability over time. The 'shark' in this 'moat' represents the inevitable challenges these companies must face to defend their leading position.

Dividend aristocrats and their excess return
According to Stefan Kühn, "dividend aristocrats" are companies that have been paying dividends for a long time and regularly increase their payouts. These companies have a solid business base and have proven that they can generate stable earnings even in difficult market conditions. The attractiveness of these shares lies not only in the regular dividend payments, but also in their long-term growth potential.

Strategy for investors
In times of rising interest rates and an uncertain economic outlook, high-dividend shares offer an attractive alternative for investors. The continuity and reliability of dividend payments offers a degree of security and can help to make portfolios more resilient to market volatility. By reinvesting dividends, investors can benefit from the compound interest effect in the long term and increase the potential for above-average returns.

Conclusion
Stefan Kühn believes that Warren Buffett's 'moat' concept and the 'dividend aristocrat' investment strategy offer investors an opportunity to position themselves in times of economic uncertainty and rising interest rates. The stability and growth potential of these companies make them an attractive choice for investors seeking long-term returns. Those who recognise the importance of dividend yields and use them strategically can benefit from stable and above-average returns even in times of increased market volatility.

Stefan Kühn is an economist and has been analysing macroeconomic change and the interdependence of markets and political influences on companies, society and financial markets for several years. He argues that macroeconomic Keynesian and new Keynesian models generally depict completely interdependent economic systems that cannot be solved recursively, but only simultaneously. He does not limit himself to purely scientific methods, but draws his findings from his many years as an entrepreneur and consultant to the management of predominantly listed companies.

Business Administration & Economics
www.sk-finance-scout.com

Dissemination of a Press Release, transmitted by EQS News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The EQS Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com