Warren Buffett just released the latest Berkshire Hathaway letter to shareholders.
There are many lessons to be learned from it, as always.
Buying good business at fair prices will continue to be an attractive (and only) way to invest for Mr Buffett and indeed many investors.
You want to find businesses that you can hold for many years. You want to own businesses that can withstand most economic problems because a recession will come around every so often. You want shares that will very likely be generating higher earnings in the future.
I think these two dividend shares could be excellent, Buffett-like picks:
APA Group (ASX: APA)
One of Berkshire Hathaway's largest divisions is its energy division. APA Group is not exactly an identical copy of that division, but I think it's the type of business that Mr Buffett would want to own for the defensive earnings that it provides, the attractive cashflow that it generates each year and the additional growth opportunities into the future.
APA Group owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). It owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation's natural gas usage.
And what about the dividend? It has grown its distribution every year for around 15 years and it currently has a distribution yield of 4.3%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Mr Buffett would likely want to own the share in Australia that's most similar to Berkshire Hathaway.
Like Berkshire Hathaway, Soul Patts has investments in listed businesses like Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPM) and Clover Corporation Limited (ASX: CLV). It also has private business investments including swimming schools, resources and luxury retirement living.
Management are long-term focused and are large shareholders of the company. Soul Patts avoids hyped-up shares, it invests in uncorrelated assets and it likes defensive businesses.
It has been growing for over 100 years and I think the next decade is likely to be another period of growth for the company. I was buying shares before the TPG-Vodafone merger and I'd be happy to buy more on price weakness.
It has increased its dividend each year since 2000 and it currently has a grossed-up dividend yield of 3.8%.
Foolish takeaway
Both of these shares have excellent dividend histories, strong earnings and long-term growth prospects. Out of the two I'm more inclined to go for Soul Patts because of its diversified portfolio and investment flexibility.
