Below you can see Warren Buffett’s top 5 dividend stock picks. For a more comprehensive listing, please see 10 Dividend Stocks Warren Buffett Likes The Most.
5. The Kraft Heinz Company (NYSE:KHC)
The consumer staple company Kraft Heinz (NYSE: KHC) is the fifth-largest stock holding of Berkshire’s portfolio at the end of the September quarter, with ownership of 325 million shares valued at $9.7 billion. Although Kraft Heinz has slashed its dividends by 36% at the beginning of the last year, Warren Buffett still likes its above 4% dividend yield.
Berkshire Hathaway hasn’t bagged big gains from Kraft Heinz share price gains, but the firm has banked massive $3.445 billion dividend payments since its initial investment in 2015.
4. American Express Company (NYSE: AXP)
The long-running investment in the credit card company American Express (NYSE: AXP) currently occupies 6.64% of the portfolio. Oracle of Omaha had first initiated a stake in the credit card company in 1963 and the stock is currently ranked at the fourth spot in Buffett’s portfolio.
The company is well known for offering sustainable growth in returns to shareholders. The credit card company currently offers a quarterly dividend of $0.43 per share, yielding around 1.39%. Its average dividend growth in the past five years is above 10%. The credit card company has generated $8.75 billion in the September quarter revenue while its earnings per share came in at $1.30 – up significantly from the quarterly dividend of $0.43 per share.
3. Coca-Cola (NYSE: KO)
Coca-Cola (NYSE: KO) is the dividend king considering its 58 years of straight dividend increases. The consumer staples company is one of the largest stock holdings of Warren Buffett’s portfolio. The firm bought more than $1 billion of Coca-Cola shares in 1988.
Berkshire currently holds 400 million shares of the consumer staple company that brings in $640 million annual dividend income. The firm has earned almost $7 billion in dividends from the Coke investment since 1995.
Coca-Cola dividends look safe amid its strong cash generation potential. The company has generated $8.6 billion in free cash flows last year compared to dividend payments of $6.8 billion.
2. Bank of America (NYSE: BAC)
Bank of America (NYSE: BAC) has been in the list of Warren Buffett’s most favorite dividend stocks over the years. The firm has increased its stake in Bank of America by 9% during the September quarter to 10.65% of the overall portfolio, representing the second-largest holding after Apple. Warren Buffett is Bank of America’s biggest shareholder.
Berkshire Hathaway currently holds 1.01 billion shares of Bank of America valued above $24 billion. Berkshire has first created a position in Bank of America during the 2011 financial crisis. Bank of America offers a quarterly dividend of $0.18 per share, yielding around 2.49%. Shares of Bank of America underperformed this year due to pandemic related challenges.
1. Apple (NASDAQ: AAPL)
Apple (NASDAQ: AAPL) is Berkshire Hathaway’s largest holding despite selling almost 36 million shares in the third quarter, according to the 13F filing. The largest technology company currently accounts for 47% of overall Berkshire Hathaway’s portfolio.
Berkshire Hathaway has generated billions of dollars of profit from its investment in the tech giant since it first initiated a position in 2016 with the purchase of 9.8 million shares worth just over $1 billion. The firm currently holds almost 944 million shares of Apple valued above $109 billion. Shares of Apple soared close to 80% in the last twelve months alone, extending the five years gains to 320%.
In addition to share price gains, the firm has also been earning money through Apple’s dividend growth. Apple has raised dividends in the past nine successive years, with average dividend growth of 10% in the past five years.
Please also see 10 best dividend stocks for passive income and 10 best high dividend stocks to buy now.
Disclosure: None.
