Walk in the money for the rest of us. This is a personal financial show on money, how it works, how to invest it, and how to live without worrying about it.

I'm your host, David Stein, today is episode 422. It's titled, This Stock has a 15% dividend yield, and has outperformed Warren Buffett.

Should you invest?

Three years ago, in episode 242, should you let Warren Buffett manage your money, we looked at Berkshire Hathaway as an outside money manager that we could hire to manage assets for us.

We used the process that I used at my old firm to analyze money managers. We looked at the people, we looked at their investment process, and we looked at their performance.

We recently received a question in our money for the rest of us plus form about, would we look at Carl Icon's stock?

It's Icon Enterprises LP, the ticker is IEP. This is a diversified holding company. They have segments in the energy space, automotive, real estate, food packaging, some pharmaceuticals, and IEP also owns a portion of Carl Icon's hedge fund.

Carl Icon owns 86% of IEP, and most remarkably, the dividend yield is close to 15%. That has been a stable dividend since 2019.

Carl Icon is 87 years old. That's a concern in hiring a money manager at that age.

What is the succession plan? Is the culture there to be able to continue the manner in which Icon Enterprises invest?

We had the same discussion regarding Berkshire Hathaway, Warren Buffett is 92.

If we compare Berkshire Hathaway and Icon Enterprises, the biggest thing is the dividend. Berkshire Hathaway doesn't pay a dividend to common stock shareholders.

Even though they'll collect over $6 billion in dividends from their underlying companies that they own, but they prefer to reinvest in other opportunities.

Whereas Icon Enterprises, as I mentioned, the 15% dividend yield, and what we care about is that dividend is sustainable.

In the quarterly investor presentation that Icon Enterprises puts together, they point out the performance of the common stock, IEP.

How it's done relative to the S&P 500 index, as well as relative to Berkshire Hathaway.

And if we look over the past year, the performance of Icon Enterprises relative to Berkshire, IEP has outperformed.

It's returned 14% over the past year, primarily due to the dividend, whereas Berkshire Hathaway is down 0.7%.

The overall S&P has been down 5% in the past year, so having a very high dividend provides a cushion when overall markets sell off.

Over other time periods, though, Berkshire Hathaway has outperformed Icon on a three-year basis, 11% annualized, versus 8.4% for Icon, and 8.2% for the S&P 500.

The three-year timeframes important because it was three years ago that we looked at Berkshire Hathaway, and they clearly outperformed the S&P 500 over the past three years.

Longer term, Berkshire Hathaway has not done as well relative to the S&P.

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