Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

NV Energy, Inc. (NVE): Warren Buffett Just Bought This Dividend Stock

Berkshire Hathaway Inc. (NYSE:BRK.B) is back in buy mode. The company snatched up NV Energy, Inc. (NYSE:NVE), calling into question the recent utilities pullback we’ve seen over the past month. And while “monkey see, monkey do” is the fastest way to financial ruin, the Oracle of Omaha may know something we don’t. Let’s look at why Warren Buffett loves this dividend stock and whether any other utility dividend stocks offer similar deals.

The details
Berkshire Hathaway Inc. (NYSE:BRK.B)’s MidAmerican Energy subsidiary announced Wednesday that it has agreed to acquire NV Energy, Inc. (NYSE:NVE) for $5.59 billion. That equates to $23.75 per share, a 23% premium over its pre-announcement closing price. Once NV’s debt is added into the deal, MidAmerican will have coughed up $10 billion for this dividend stock.

In a press release, Buffett noted: “This is a great fit for Berkshire Hathaway Inc. (NYSE:BRK.B), and we are pleased to make a long-term investment in Nevada’s economy. Through MidAmerican, we have found in NV Energy, Inc. (NYSE:NVE) a great company with similar values, outstanding assets, and a superb management team.”

According to MidAmerican President and CEO Greg Abel, the mastermind behind the deal, the acquisition has been a long time coming. Abel had been in talks with NV for several years and sees significant upside to the deal. In an Omaha World-Herald interview, Abel reflected: “[T]hey’ve got a very good management team. They have excellent regulated assets, and we view Nevada as an excellent place for investment long-term.”

What makes NV a Buffett buy?
Dividend stocks, and utilities specifically, are a natural fit for Berkshire Hathaway Inc. (NYSE:BRK.B). Regulation allows electricity companies to maintain steady earnings through good times and bad. Even though NV is based in recession-ravaged Nevada, the corporation’s sales have dropped just 15% since 2009. Even better, its bottom line has recently headed higher for an overall 54% net profit gain in the last five years.

NVE Revenue Annual Chart

NVE Revenue Annual data by YCharts.

Buffett is famous for his quote “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price,” and NV seems to be the former. Even after shares skyrocketed this week, the dividend stock trades at just 17 times last year’s earnings. And while Berkshire Hathaway Inc. (NYSE:BRK.B) doesn’t distribute dividends itself because it’s smarter than you, NV’s 3.8% yield serves as another solid signal that this company’s earnings aren’t going anywhere.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.