2024-03-26 06:50:00 ET
It is widely known that Warren Buffett, one of the greatest investors ever, loves dividend stocks. So it's not surprising that the company he leads, Berkshire Hathaway , has several excellent dividend stocks in its portfolio. Two of the best are Visa (NYSE: V) and Mastercard (NYSE: MA) , the world's largest payment services companies. Let's find out why these businesses are solid options for investors interested in passive income whose favorite holding period -- like Buffett's -- is forever.
Few people think about what happens once they swipe their credit cards in a store. The process is pretty intricate. Visa and Mastercard form the backbone of it. Both companies operate payment networks that allow credit-card transactions to be approved (or rejected) by connecting the bank that issued the card with that of the merchant's.
Visa and Mastercard pocket a fee for every transaction they help to facilitate. These two juggernauts have no notable competitors aside from one another. They practically run a duopoly that would be extremely challenging to topple, thanks to the network effects both companies benefit from. Take Visa: As of last year, there were more than 4 billion cards in circulation that had its logo.
For further details see:
2 Warren Buffett Dividend Growth Stocks to Buy and Hold Forever