Below is the list of 5 best value dividend stocks to buy now according to Warren Buffett. For a Buffett’s history and hedge fund performance, please see the 12 Best Value Dividend Stocks to Buy Now According to Warren Buffett.
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5. The Kraft Heinz Company (NASDAQ: KHC)
The consumer staples company Kraft Heinz (NASDAQ: KHC) is the fifth-largest stock holding of billionaire Warren Buffett’s portfolio. His firm held more than $11 billion of stake in KHC, representing 4.18% of the overall portfolio. Despite a dividend cut of 36% in 2019, the company offers a quarterly dividend of $0.40 per share.
Here is what Warren Buffett stated about Kraft Heinz in his fourth-quarter investor letter:
“We exclude our Kraft Heinz holding — 325,442,152 shares — (In the list of 15 common stock investments that at yearend were our largest in market value) because Berkshire is part of a control group and therefore must account for that investment using the “equity” method. On its balance sheet, Berkshire carries the Kraft Heinz holding at a GAAP figure of $13.3 billion, an amount that represents Berkshire’s share of the audited net worth of Kraft Heinz on December 31, 2020.”
4. STORE Capital Corporation (NYSE: STOR)
The real estate investment trust STORE Capital Corporation (NYSE: STOR) is a member of Warren Buffett’s portfolio since 2017. STOR is weighted around 0.31% of the Berkshire Hathaway portfolio at the end of the December quarter. The real estate investment trust offers a dividend yield of 4.14% at present. The company raised dividends in the past six successive quarters and its dividend growth rate averages around 6.17% in the past five years.
Store Corporation was in 12 hedge funds’ portfolio at the end of the December quarter, down from 20 hedge fund positions in the previous quarter.
3. Verizon Communications (NYSE: VZ)
Verizon Communications is widely considered the best dividend stock to hold for sustainable growth in dividend income. The company offers a dividend yield of around 4.3% and it has raised dividends in the past 8 straight years. It is the sixth-largest stock holding of Berkshire Hathaway, according to the latest 13F filings.
Mott Capital Management, an investment management firm, stated in a Q4 investor letter that 5G would help Verizon’s stock in rebounding in the days ahead. Here is what Mott Capital Management stated:
“Verizon finished the year lower by around 4.3% and has been a hard holding over the past 6 years. It has gone nowhere and has been the one stock I struggle with. However, 5G has finally arrived. If 5G can deliver on the promise I think it can, then Verizon should eventually come around. I remain hopeful.”
2. AbbVie Inc. (NYSE: ABBV)
Berkshire Hathaway initiated a brand new position in AbbVie Inc. (NYSE: ABBV) during the third quarter of 2020 and raised its stake by 20% during the fourth quarter. The pharmaceutical giant is weighted around 1% of Buffett’s portfolio, according to the latest 13F filings. With a history of 8 successive years of dividend growth, AbbVie is a decent stock for a dividend portfolio. ABBV’s potential to generate sustainable growth in revenue and earnings helps it in generating strong cash returns for investors.
AbbVie was in 83 hedge funds’ portfolios at the end of the fourth quarter of 2020 compared to 82 positions in the previous quarter.
1. Chevron Corporation (NYSE: CVX)
The investing titan bought 48.4 million shares of energy giant Chevron Corp (NYSE: CVX) during the December quarter, accounting for 1.52% of the overall portfolio of Berkshire. Chevron is one of the best value dividend stocks because of its extensive dividend growth history. The company offers a dividend yield of more than 4.88% at present. It is only among the few oil companies that sustained their dividends in the pandemic year. On the other hand, the oil giant’s share price grew close to 22% year to date on the back of improving oil market fundamentals.
Chevron Corporation was in 50 hedge funds’ portfolios at the end of December compared to 43 hedge fund positions in the previous quarter.
