The portfolio of the US star investor is of interest to many investors, especially those with a long-term investment approach. In this case, the focus is on dividend stocks in particular, as these can often generate good returns through passive cash flow when invested over a longer period of time. One of the dividend stocks in Buffet’s portfolio is Louisiana-Pacific Corporation, a U.S. manufacturer of building materials, primarily wood. The dividend stock currently has a dividend yield of 1.54%, which has been steadily increased in recent years. However, the share price has fallen by almost 11% in the past 12 months.
The company is particularly dependent on the development of the real estate sector and the construction situation in the United States, since many of the products of Louisiana-Pacific Corporation, or LPX for short, are used in the construction of buildings. In announcing its first-quarter results on May 3, the company expressed optimism about continued strength in residential construction and more sales from rising commodity prices.
The share price has been in a sideways movement between approximately 50 and 75 US dollars since March 2021, i.e. for more than 2 years. Pre-market, the price stood at $61.05, down more than 2% from Friday’s close. In the medium term, it is still in a recovery move since the last low at around $52.
Due to the currently worsening situation in the U.S. real estate sector caused by an excessive market share of risky subprime loans, lenders are currently introducing cautionary measures to protect themselves against defaults. For example, real estate lending, mainly to private customers, declined sharply. This could also have an impact on the construction sector and lead to falling raw material prices due to oversupply, or significantly lower demand. Although an investment in LPX looks positive in the long term, as the share price has been stable so far and the stock can convince with a long-term positive dividend history, one should consider a purchase carefully due to the market circumstances.
