5 Best Dividend Stocks to Buy According to Warren Buffett

3. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 134 

Apple Inc. (NASDAQ:AAPL) is a dividend aristocrat stock that has rewarded investors with passive income for about 36 years. The impressive track record stems from the company’s resilient core business that entails manufacturing and selling some of the most sought-after smartphones, MacBooks, tablets, and wearables. Apple Inc. (NASDAQ:AAPL) services unit, which includes the Apple Store, Apple Pay, and cloud services, also generates significant revenue to support dividend and buyback programs.

Apple Inc. (NASDAQ:AAPL) is the largest holding in Berkshire Hathaway’s portfolio, accounting for 50%. Over the past decade, its dividend payout has increased by about 9%. It currently pays a quarterly dividend of $0.24 on a yield of about 0.49%.

The number of hedge funds in Insider Monkey’s database that owned shares of Apple Inc. (NASDAQ:AAPL) dropped slightly from 135 to 134 in the third quarter of 2023. The value of their stakes also decreased from $194 billion to $179 billion.

Here is what Baron Funds said about Apple Inc. (NASDAQ:AAPL) in its Q3 2023 investor letter:

“After a strong start to the year, shares of Apple Inc. partially retraced their gains this quarter. Mixed second calendar quarter financial results, with iPhone, iPad, and Wearables revenue coming in just shy of consensus expectations, coupled with elevated investor concerns about the macro economy and potential weakness in consumer spending later this year, pressured shares. Despite these quarterly fluctuations in product sales, we are encouraged by several long-term trends, including: (1) revenue from higher-margin services like the App Store, iCloud, and Apple Pay, which are growing faster than the overall business, driving better revenue visibility and higher free-cash-flow (FCF) margins; (2) continued gains in global market share in smartphones, wearables, and other hardware categories; and (3) consistent returns of capital to shareholders via share repurchases and dividends. On top of these trends in the core business, Apple is thoughtfully investing in new categories like augmented reality, search, financial services, and streaming media content. We took advantage of weakness in the quarter to add to our position in Apple.”

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