Finance
72% of Warren Buffett’s Berkshire Hathaway portfolio is invested in these five dividend stocks
How Much Does Warren Buffett Like Dividends? We should not draw any conclusions from this Berkshire Hathaway does not pay dividends. The correct answer to the question is that Buffett likes dividends a lot of.
By the way, we can have confidence in this answer. Why? About 72% of Buffett’s Berkshire Hathaway portfolio is invested in just five dividend stocks.
1. Apple
Apple (NASDAQ: AAPL) has been Berkshire’s largest holding company for years. Although Buffett has sold a significant portion of his stake in Apple this year, including a notable reduction of nearly half recently, it is still by far Berkshire’s largest individual stock holding.
To be fair, Apple is not primarily known as a dividend stock. Are forward dividend yield is a paltry 0.45%. However, the iPhone maker has paid and increased its dividend every year since 2012.
2. Bank of America
bank of America (NYSE: BAC) remains Buffett’s second-largest position, at least for now. That could soon change, however, with Buffett selling large portions of his BofA position in recent days.
Although the legendary investor appears to have a negative impact on Bank of America to some extent, he is probably still happy with the dividend. BofA’s future dividend yield is almost 2.6%. The financial services provider has increased its dividend for ten years in a row.
3. American Express
American Express (NYSE:AXP) could soon take over second place from Bank of America. However, it is currently Berkshire’s third largest holding company.
Buffett wrote to Berkshire Hathaway shareholders last year that American Express would pay Berkshire $302 million in 2022. He mentioned Amex again in his latest shareholder letter, saying the company would increase its dividend payout by about 16% in 2024. He was close: the actual increase was 17%. American Express’s dividend yield is 1.1%.
4. The Coca-Cola Company
Berkshire has owned shares of The Coca-Cola Company (NYSE:KO) longer than any other stock. It is also one of the conglomerate’s largest holdings. Buffett thinks Coca-Cola is a “truly great company” that Berkshire will continue to “continue indefinitely.”
That’s good news for Berkshire’s dividend income. Coca-Cola’s future dividend yield is over 2.9%. The company is one Dividend King with 62 consecutive years of dividend increases.
5. Chevron
Chevron (NYSE:CVX) is Buffett’s fifth largest holding. Although Buffett reduced his position in the oil giant in the first quarter of 2024, the move followed a major purchase of the stock in the fourth quarter of 2023.
Buffett doesn’t own many high-yield dividend stocks, but Chevron is one of the few. The future dividend yield is slightly lower than 4.1%. Chevron has increased its dividend for 37 years in a row.
Are these stocks a good choice for investors now?
Buffett hasn’t purchased any additional shares of these top five dividend stocks lately. However, I think there are two good choices for investors right now.
First, Apple could be poised for strong growth soon. The company’s new generative AI capabilities only work on iPhone 15 Pro, iPhone 15 Pro Max, and newer models. In my opinion, there’s a good chance that a multi-year wave of iPhone upgrades is on the way as customers buy new smartphones to take advantage of artificial intelligence features.
Second, Chevron appears to be an excellent choice for income investors. The company’s dividend yield and track record of dividend increases are impressive. I also like Chevron’s potential growth opportunities in carbon capture and storage.
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American Express is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Keith Speights has positions in Apple, Bank of America, Berkshire Hathaway and Chevron. The Motley Fool holds positions in and recommends Apple, Bank of America, Berkshire Hathaway and Chevron. The Motley Fool has one disclosure policy.
72% of Warren Buffett’s Berkshire Hathaway portfolio is invested in these five dividend stocks was originally published by The Motley Fool
