Warren Buffett’s New $600 Million Investment

Warren Buffett’s Scripps deal may mean that media stocks like BCE Inc (TSX:BCE)(NYSE:BCE) are top stocks to buy on the Toronto Stock Exchange right now.

| More on:
close-up photo of investor Warren Buffett

Image source: The Motley Fool

Warren Buffett’s Berkshire Hathaway has announced a $600 million investment in E. W. Scripps Co. This investment will help Scripps pay for the $2.65 billion acquisition of ION Media.

Warren Buffett also made substantial investments in Barrick Gold and Snowflake in recent months. At the same time, Buffett seems to be shying away from financial stocks, airlines, and restaurants.

The billionaire recently sold out of the Toronto Stock Exchange traded company Restaurant Brands International. During the March 2020 market sell-off, Berkshire Hathaway also sold all of its positions in the airline industry.

Now, Berkshire Hathaway will pay Scripps $600 million to go toward the $2.65 billion acquisition of ION Media.

This deal is slightly reminiscent of Buffett’s $10 million investment in Occidental Petroleum last year. Occidental Petroleum needed the cash to pay for a $38 billion takeover of Anadarko Petroleum.

Does Warren Buffett’s investment in this media company say that it might be the right time to buy media stocks for your retirement portfolio? There is one great TSX stock with market power that you might consider purchasing.

BCE: Bell Media is a top TSX stock to buy now

BCE (TSX:BCE)(NYSE:BCE) is a top media stock to buy today. This telecommunications stock owns Bell Media as a subsidiary. Bell Media is a conglomerate boasting a number of assets including iHeart Radio Canada, CTV, and Maple Leaf Sports & Entertainment.

BCE stock dropped from a 52-week high of $65.45 per share to a 52-week low of $46.03 during the March 2020 sell-off. At the time of writing, investors are trading the stock for $56.07 per share.

The annual dividend yield on BCE Inc stock is 5.94% at the current market value. This telecommunications stock would provide your retirement portfolio or Tax-Free Savings Account with a nice income at this dividend yield.

What makes this a really exciting investment is the market power that BCE wields within its businesses. Market power means that you can likely trust that this stock will prosper over the long term.

Warren Buffett bets on media

Should you consider media stocks for your portfolio upon hearing about Warren Buffett’s recent investment in Scripps? Regardless of this decision, BCE stock is a top TSX asset to own in your portfolio.

This is a dividend stock that you should buy and hold through the ups and downs of the market. Even when the stock is trading lower, you can still collect the income from dividends.

Moreover, shareholders can feel confident that BCE stock will rebound from market lows. This telecommunications company proved resiliency through the COVID-19 pandemic. Long-term investors like Warren Buffett can feel comfortable owning this stock.

Looking back in time, the stock struggled to regain market value during the financial crisis of 2007. It wasn’t until around 2011 that BCE regained the loss in market value from the drop in market price from November to December of 2008. That’s three years of patience.

Today, BCE stock is trading well above its 2008 market value. Shareholders who practiced patience eventually saw their initial investment in BCE become profitable once again. Today, these long-term investors are looking at an appreciation in their initial investment.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Debra Ray has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC and Snowflake Inc and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares) and short January 2021 $200 puts on Berkshire Hathaway (B shares).

More on Dividend Stocks

investment research
Dividend Stocks

Best Stock to Buy Right Now: TD Bank vs Manulife Financial?

TD and Manulife can both be interesting stock picks for today, depending on your investment style.

Read more »

A worker gives a business presentation.
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These stocks are out of favour but could deliver nice returns over the coming years.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 5.5 Percent Dividend Stock Pays Cash Every Month

This defensive retail REIT could be your ticket to high monthly income.

Read more »

Confused person shrugging
Dividend Stocks

Passive Income: How Much Do You Need to Invest to Make $600 Per Month?

Do you want passive income coming in every single month? Here's how to make it and a top dividend ETF…

Read more »

Canadian Dollars bills
Dividend Stocks

3 Monthly-Paying Dividend Stocks to Boost Your Passive Income

Given their healthy cash flows and high yields, these three monthly-paying dividend stocks could boost your passive income.

Read more »

Make a choice, path to success, sign
Dividend Stocks

The TFSA Blueprint to Generate $3,695.48 in Yearly Passive Income

The blueprint to generate yearly passive income in a TFSA is to maximize the contribution limits.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »