5 Best Dividend Stocks to Buy According to Warren Buffett

4. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 88

Bank of America Corporation (NYSE:BAC) is Berkshire Hathaway’s second-largest holding and one of the best dividend stocks to buy, according to Buffett. The legendary investor has held stakes in the financial services company since 2017 and is impressed by its yield, which currently stands at 2.86%.

While Bank of America Corporation (NYSE:BAC) pays a quarterly dividend of $0.24 a share, it has a 24-year run of paying regular dividends to shareholders. The $28 billion worth of shares that Berkshire Hathaway holds generates about $990 million in dividends.

The value of the stakes that 88 hedge funds in Insider Monkey’s database held in Bank of America Corporation (NYSE:BAC) was more than $31.3 billion at the end of the third quarter of 2023. This was a slight decrease from the previous quarter when 90 hedge funds owned shares of the company.

Smead Capital Management, an investment management company, mentioned Bank of America Corporation (NYSE:BAC) in its Q3 2023 investor letter. Here is what the fund said:

“Through the first nine months of the year, we had a gain of 2.10%. The S&P 500 had a gain of 13.07% and the Russell 1000 Value had a gain of 1.79%. The stock market realized markedly higher riskless US Treasury interest rates had their effect on the stock market as it began to reassert what Warren Buffett calls the “gravitational pull” on price-to-earnings ratios (P/E).

On the downside, Target (TGT), Bank of America Corporation (NYSE:BAC) and Pfizer (PFE) detracted the most in the first nine months of the year. Inverted yield curves are historically lousy for the banks, so the weak performance for BAC is no surprise.”

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