🇯🇵 Japan’s Trading Houses & Their Dividends: #2 Marubeni (8002)
Buffett’s Bet on Japan: Marubeni in Focus
We’re taking a deep dive into Warren Buffett’s five major Japanese trading house investments, with a special focus on their dividends. Last week, we covered Mitsui & Co., and this time, we turn our attention to Marubeni Corporation.
Since 2019, Buffett’s Berkshire Hathaway has steadily increased its stake in Japan’s sōgō shōsha—Mitsui, Marubeni, Itochu, Mitsubishi, and Sumitomo—recognizing their strong cash flows, global reach, and shareholder-friendly policies. Today, Berkshire owns between 8.5% and 9.8% of each, with room to grow beyond 9.9%.
These trading houses are diversified conglomerates with operations spanning energy, commodities, retail, and infrastructure. Their financial discipline and ability to navigate international markets make them attractive for long-term investors. But beyond their business strength, how rewarding are their dividends?
In this post, we take a closer look at Marubeni Corporation, a company that started in textiles and has expanded into agriculture, energy, and industrial machinery. Let’s explore its business model, competitive advantages, and most importantly—its dividend potential.
Marubeni Corporation, established in 1858 by Chubei Itoh, began as a linen trading business in Osaka, Japan. The name "Marubeni" combines "maru" (circle) and "beni" (red), reflecting the store's emblem. Over the decades, Marubeni has evolved into a prominent sōgō shōsha (general trading company), diversifying its operations across various sectors.
Business Overview
Marubeni's extensive business portfolio includes:
Lifestyle: Engagement in apparel, functional materials, and rubber industries, along with services in logistics, insurance, and real estate. marubeni.com
Food and Agriculture: Trading of grain and food products, and distribution of solar panels and energy storage units.
Chemicals: Involvement in the trade of various chemical products. marubeni.com
Energy and Metals: Trading in oil, gas, nuclear fuel, iron, steel, and other metals and minerals.
Power and Infrastructure: Development of power plants, environmental facilities, marine projects, industrial plants, and transport infrastructure.
Transportation and Industrial Machinery: Trading in aircraft, ships, automobiles, and construction and industrial machinery.
Warren Buffett's Investment
Warren Buffett's Berkshire Hathaway has shown significant interest in Japanese trading houses, including Marubeni:
Initial Investment: Berkshire Hathaway began investing in Japan's five largest trading houses—Marubeni, Itochu, Mitsubishi, Mitsui, and Sumitomo—in 2020, acquiring a 5% stake in each.
Increased Holdings: By early 2025, Berkshire's investments in these companies totaled $23.5 billion, with Buffett expressing intentions to maintain and potentially increase these positions over the long term.
Fundamentals, valuation and analyst opinion
Marubeni Corporation (8002) from Japan shows some interesting fundamentals and trends, though short-term growth expectations are modest. The company currently has a market capitalization of 4.2 trillion yen (approximately 28 billion dollars). Over the past few years, Marubeni has consistently repurchased a small percentage of its shares, averaging about 1 to 2% per year, which is seen as a positive signal for shareholders.
Market Capitalization: Marubeni has a market capitalization of 4.2 trillion yen (approximately 28 billion dollars).
Share Buybacks: The company has consistently repurchased a small percentage of its shares (1-2% per year), which is seen as a positive signal for shareholders.
Future Outlook: The outlook for 2025 is modest, with a forward P/E ratio of 8.5, which could make the stock attractive compared to peers.
Profitability: The Return on Invested Capital (ROIC) remains between 5% and 6% annually, and the EBIT margin is relatively low (4-5% in recent years).
Revenue: Revenue for the 2024 fiscal year dropped by 21.1% to 7.25 billion yen, reflecting weaker performance.
Future Growth: Analysts expect modest, low single-digit growth in the coming years.
Debt: Marubeni has approximately 2 billion yen in net debt.
Major Shareholder: Berkshire Hathaway is the largest shareholder, holding 154 million shares worth 2.6 billion dollars (9.3% of outstanding shares).
Analyst Consensus: The majority of analysts have a positive rating—two "strong buy," ten "buy," and three "hold." There are no "sell" ratings.
Summary: Marubeni shows low margins and limited growth but offers a low valuation and a committed shareholder in Berkshire Hathaway, providing stability for investors.
The outlook for 2025 is relatively modest, with a forward P/E ratio of just 8.5, which could make the stock attractive compared to peers. However, the Return on Invested Capital (ROIC) remains on the lower end, ranging between 5% and 6% annually, and the EBIT margin is also relatively low, around 4% to 5% in recent years. This suggests moderate profitability despite the low valuation.
For the 2024 fiscal year (ending March), revenues dropped by 21.1% to 7.25 billion yen, highlighting the company’s weaker performance. Analysts expect modest low single-digit growth in the coming years, with little excitement in this area.
In terms of debt, Marubeni has approximately 2 billion yen in net debt. Berkshire Hathaway is currently the largest shareholder, holding over 154 million shares, valued at 2.6 billion dollars, or 9.3% of the outstanding shares. This stake reflects Warren Buffett’s trust in the company.
As for analyst consensus, the majority is positive: two analysts rate the stock as "strong buy", ten as "buy", and three as "hold". There are no "sell" ratings, which may partly be influenced by Berkshire Hathaway’s involvement, as it's hard to go against Buffett's position.
In summary, Marubeni presents a mixed picture, with low margins and limited growth, but a low valuation and a committed shareholder in Berkshire Hathaway. The dividend and stock buybacks offer some stability for shareholders.
What about the dividend? Do we like them?
In this series, we’ll examine the dividend statistics for the five Buffett stocks from Japan. While we understand why he’s investing in them—recognizing significant value in the country and large market caps that make them investable for Berkshire —we personally prefer other stocks with stronger dividend growth track records and generally much smaller market caps. Today we analyze Marubeni Corp (8002). The next couple of weeks we will dive into the other three Buffett stocks.
Marubeni has recently announced an interim dividend of 45 yen, marking a new record for the company. However, its dividend history is not consistent, with significant cuts in between, which we find less appealing. For FY 2024, the dividend was increased by 9% to 85 yen, yielding a dividend yield of 3.5% at the current share price of 2,540 yen. Marubeni pays dividends twice a year, and this marks the third consecutive year of dividend increases.
On an annual basis, Marubeni is expected to pay out over $850 million in dividends, which is substantial by Japanese standards. Over the last decade, however, the company has lowered its dividend twice. Despite these cuts, the 10-year compound annual growth rate (CAGR) of the dividend remains in the double digits, though the growth trajectory has not been smooth due to those significant reductions.
What we do appreciate is that the dividend growth has accelerated in recent years, with a 5-year CAGR of 20.1% and an impressive 3-year CAGR of 37.1%. Over the last five years, the dividend has increased by a total of 150%, which is quite strong for a company with a dividend yield of 3.5%.
However, we prefer companies that consistently raise their dividend each year and offer better predictability. While Marubeni’s dividend growth is commendable, its past inconsistency makes it less appealing to those seeking steady and reliable income.
Stay tuned as we analyze Buffett’s next Japanese stock pick!
At DividendJapan, we aim to highlight these opportunities and uncover hidden gems that may not yet be on your radar. Stay tuned as we explore Japan’s dividend growth stories and the next generation of market leaders!
Disclaimer: The information provided here is for informational purposes only and should not be considered financial advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions.