In this article, we discuss 5 best dividend stocks to buy according to Warren Buffett. If you want to read our detailed analysis of Buffett’s investment strategies and his fund’s recent developments, go directly to read 11 Best Dividend Stocks to Buy According to Warren Buffett.
5. The Kraft Heinz Company (NASDAQ:KHC)
Berkshire Hathaway’s Stake Value: $12,419,712,000
Dividend Yield as of October 17: 4.50%
The Kraft Heinz Company (NASDAQ:KHC) is one of America’s largest food companies that sells its products globally. Warren Buffett started investing in the company during the third quarter of 2015. In Q2 2022, the fund owned over 325.6 million KHC shares, valued at over $12.4 billion. The company represented 4.13% of Warren Buffett’s portfolio.
The Kraft Heinz Company (NASDAQ:KHC) has been offering dividends to shareholders even before the merger of Kraft and Heinz in 2015, which makes it one of the best dividend stocks on our list. It pays a quarterly dividend of $0.40 per share for a dividend yield of 4.50%, as recorded on October 17.
In October, Goldman Sachs upgraded The Kraft Heinz Company (NASDAQ:KHC) to Buy with a $443 price target. The firm mentioned that the company is structurally better positioned today with lower leveraged levels.
At the end of Q2 2022, 41 hedge funds tracked by Insider Monkey owned stakes in The Kraft Heinz Company (NASDAQ:KHC), worth over $13.6 billion. In the previous quarter, 35 hedge funds owned positions in the food company, with stakes valued at over $13.4 billion.
4. American Express Company (NYSE:AXP)
Berkshire Hathaway’s Stake Value: $21,016,276,000
Dividend Yield as of October 17: 1.47%
American Express Company (NYSE:AXP) is a New York-based credit card services company that issues personal, small business, and corporate credit cards. Warren Buffett has been investing in the company for over 25 years and his total unrealized gain on the stock amounted to over $26 billion. In Q2 2022, Berkshire Hathaway owned over 151.6 million AXP shares, worth over $21 billion. The company accounted for 7% of Warren Buffett’s portfolio.
American Express Company (NYSE:AXP) is one of the best dividend stocks in Buffett’s portfolio as the company has been paying dividends to shareholders consistently for the past 30 years. It currently offers $0.52 per share in the quarterly dividend, with a dividend yield of 1.47%, as of October 17.
At the end of June 2022, 67 hedge funds tracked by Insider Monkey owned stakes in American Express Company (NYSE:AXP), down from 69 a quarter earlier.
3. Chevron Corporation (NYSE:CVX)
Berkshire Hathaway’s Stake Value: $23,373,304,000
Dividend Yield as of October 17: 3.49%
Chevron Corporation (NYSE:CVX) ranks third on our list of the best dividend stocks. It is a California-based multinational energy company that provides related services to its customers. During Q2 2022, Berkshire Hathaway increased its position in the company by 2%, which took its total CVX stake to over $23.3 billion. The company represented 7.78% of the firm’s 13F portfolio.
On July 27, Chevron Corporation (NYSE:CVX) declared a quarterly dividend of $1.42 per share, in line with its previous dividend. The company has a 35-year run of raising its dividends consistently. As of October 17, the stock’s dividend yield came in at 3.49%.
Piper Sandler raised its price target on Chevron Corporation (NYSE:CVX) this September to $190 and kept an Overweight rating on the shares, presenting a constructive stance on the integrated oils. The firm also appreciated the company’s strategic priorities.
The number of hedge funds tracked by Insider Monkey owning stakes in Chevron Corporation (NYSE:CVX) grew to 59 in Q2 2022, from 53 in the previous quarter. The collective value of these stakes is over $26 billion. Fisher Asset Management is one of the company’s leading stakeholders in Q2.
Diamond Hill Capital mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm had to say:
“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
2. The Coca-Cola Company (NYSE:KO)
Berkshire Hathaway’s Stake Value: $25,164,000,000
Dividend Yield as of October 17: 3.15%
Berkshire Hathaway has been investing in The Coca-Cola Company (NYSE:KO) since 1988, purchasing shares worth over $1 billion. The hedge fund has gained massive profits from its position in the beverage company. The fund’s dividend payments from the company increased from $88 million in 1995 to $672 million in 2021. The hedge fund owned 400 million KO shares in Q2 2022, valued at over $25 billion. The company accounted for 8.38% of Warren Buffett’s portfolio.
The Coca-Cola Company (NYSE:KO) holds one of the longest dividend growth streaks in the US market, having raised its dividends consistently for the past 60 years. The company offers a quarterly dividend of $0.44 per share, with a dividend yield of 3.15%, as recorded on October 17.
In October, Wedbush initiated its coverage of The Coca-Cola Company (NYSE:KO) with an Outperform rating and a $63 price target. The firm appreciated the company’s organic performance among its peers and called it the market leader in the carbonated soft drink category with the best pricing power.
At the end of June 2022, 60 hedge funds in Insider Monkey’s database owned stakes in The Coca-Cola Company (NYSE:KO), down from 64 in the previous quarter. These stakes have a total value of over $28.3 billion.
Aristotle Capital Management, LLC mentioned The Coca-Cola Company (NYSE:KO) in its Q2 2022 investor letter. Here is what the firm has to say:
“The Coca-Cola Company (NYSE:KO), the global beverage business, was a leading contributor for the period. Coca-Cola continues to benefit from the refranchising of its bottling operations and realignment of incentives, catalysts we previously identified. These initiatives are demonstrating their strength in an inflationary and supply-chain-challenged environment. Additionally, the company has focused on evolving its customer engagement practices by leveraging digital and social medias for targeted campaigns, such as the design and launch of Coke Byte in the metaverse. Lastly, Coca-Cola has furthered its transformation into a total beverage company, as it debuted its new Jack Daniel’s Tennessee Whiskey and Coca-Cola ready-to-drink premixed cocktail. Although uncertainties surrounding cost pressures, lockdowns and geopolitical conflicts remain, we believe Coca-Cola is uniquely positioned to successfully continue its transition toward a total beverage business.”
1. Bank of America Corporation (NYSE:BAC)
Berkshire Hathaway’s Stake Value: $31,444,432,000
Dividend Yield as of October 17: 2.63%
Bank of America Corporation (NYSE:BAC) is an American multinational financial services company. On July 20, the company announced to hike its quarterly dividend by 5%. Through this increase, the company extended its dividend growth to nine years, which makes it one of the best dividend stocks on our list. It currently offers a quarterly dividend of $0.22 per share, with a dividend yield of 2.63%, as of October 17.
Berkshire Hathaway opened its position in Bank of America Corporation (NYSE:BAC) in 2011 and has raised its stake ever since. The North Carolina-based company was the second-largest holding of the fund and represented 10.47% of Warren Buffett’s portfolio.
Deutsche Bank mentioned Bank of America Corporation (NYSE:BAC) in its September investors’ note and maintained its Buy rating on the stock, as the firm sees an upside in the banking sector after underperformace for weeks.
At the end of Q2 2022, 99 hedge funds tracked by Insider Monkey owned stakes in Bank of America Corporation (NYSE:BAC), the same as in the previous quarter. The combined value of these stakes is roughly $36 billion. Along with Warren Buffett, Ken Griffin was one of the company’s most prominent stakeholders in Q2.
Diamond Hill Capital Management mentioned Bank of America Corporation (NYSE:BAC) in its Q2 2022 investor letter. Here is what the firm has to say:
“Bank of America Corporation (NYSE:BAC) shares were weak in Q2 as the market became increasingly focused on the possibility of a near-term recession and the potential for credit losses along with current fee revenue pressures.”
You can also take a look at Warren Buffett’s 10 Favorite Dividend Stocks for the Rest of 2022 and 10 Small-Cap Stocks that Pay Dividends
