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Billionaires Just Love These Stocks That Pay High Taxes

The recent overhaul of the US tax law has stirred a lot of controversy, especially with regard to who stands to benefit the most. One thing is sure – it is a big win for Corporate America. Although a company’s tax rate can fluctuate wildly from quarter to quarter because of such events as asset write-downs or accounting adjustments, the reduction of the corporate tax rate to 20% will still have a major impact on companies that have been subject to a large income tax rate. Using the ranking compiled by MarketWatch, we have identified six high-tax-paying companies that billionaire fund managers like a lot.

Warren Buffett portrait

#6 Coca-Cola – 21% tax rate in the past five reported quarters

First up is The Coca-Cola Co (NYSE:KO). According to our data, 11 billionaire fund managers had this stock in their equity portfolios at the end of the 2017 third quarter, up from 8 a quarter before. It is well known that Warren Buffett is a big fan of Coca-Cola and long-term shareholder. Buffett’s Berkshire Hathaway holds 400 million shares according to its latest 13F filing. Jim Simon’s Renaissance Technologies has more than doubled its bet on The Coca-Cola Co (NYSE:KO) during the third quarter, having amassed 4.75 million shares in the process.

The Coca-Cola Co (NYSE:KO) is one of the top dividend-paying stocks, having increased its dividend for 55 years in a row. The company currently pays an annual dividend of $1.46 per share, which represents a 3.06% yield. Although it is well established, has a great brand and market share, Coca-Cola has been struggling recently as consumer tastes changed towards healthier drinks and beverages. The company has invested heavily in diversification, but the soda products still account for 64% of its business.

#5 JPMorgan Chase – 28% tax rate in the past five reported quarters

Banking giant JPMorgan Chase & Co. (NYSE:JPM) is also a darling of elite fund managers. At the end of September 2017, 12 of the billionaires followed by Insider Monkey were invested in the stock, up from 9 registered a quarter earlier. In its latest 13F filing, Jim Simons’ Renaissance Technologies reported a fresh stake in JPMorgan Chase & Co. (NYSE:JPM) that amounted to 1.42 million shares. David E Shaw’s D E Shaw was not far behind, as it held 1.18 million shares at the end of the third quarter.

Jamie Dimon, JPMorgan Chase & Co. (NYSE:JPM) Chairman and CEO, has announced on Tuesday that he plans to stay for another 5 years at the helm of the company. Dimon has been running JPMorgan Chase, which is currently the largest US bank, since 2004. The company has also promoted Daniel Pinto and Gordon Smith as co-presidents and Dimon’s top deputies as part of its management succession plan.

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