Billionaire Warren Buffett’s Top Dividend Picks

#3 International Business Machines Corp. (NYSE:IBM)

– Shares Owned by Berkshire Hathaway (as of September 30): 81 Million

– Value of Holding (as of September 30): $11.75 Billion

After continuously increasing its stake in International Business Machines Corp. (NYSE:IBM) for six quarters Berkshire Hathaway didn’t make any changes to its stake in the company during the second quarter, but inched up its stake by 1% during the third quarter. Last month, Berkshire Hathaway announced that it has lost $2 billion on its investment in the company. However, the firm still has high conviction on the stock and believes that the company will successfully be able to transform itself from a hardware-oriented company to a cloud-focused one. Amid an over 10% decline of International Business Machines Corp. (NYSE:IBM)’s stock during the third quarter, four more funds covered by us became bullish on the stock. Among the funds that found the company’s $1.3 quarterly dividend tempting enough to initiate a stake was Bruce Berkowitz‘s Fairholme (Fairx), which bought 754,400 shares during the third quarter.

#2 The Coca-Cola Co (NYSE:KO)

– Shares Owned by Berkshire Hathaway (as of September 30): 400 Million

– Value of Holding (as of September 30): $16 Billion

The Coca-Cola Co (NYSE:KO)’s stock has had a spectacular rise since September and now trades up by 3.13% year-to-date. In spite of this rise, the $0.33 per share quarterly dividend the company pays translates into an attractive annual dividend yield of over 3% currently. Although the forward price to earnings multiple of 21.03 the stock currently trades at is above industry average, several analysts believe that The Coca-Cola Co (NYSE:KO) deserves to trade at this premium due to the value of its brands and its dominance over the beverage market. On December 4, analysts at Tigress Financial downgraded the stock to ‘Neutral’ from ‘Buy’. Clint Carlson‘s Carlson Capital increased its stake in The Coca-Cola Co by 40% to over 2.5 million shares during the third quarter.

#1 Kraft Heinz Co (NASDAQ:KHC)

– Shares Owned by Berkshire Hathaway (as of September 30): 325.6 Million

– Value of Holding (as of September 30): $23 Billion

Berkshire Hathaway saw a windfall of $4.4 billion in the third quarter after the merger of Heinz and Kraft Foods Group was completed and the firm emerged as the largest shareholder of the combined company Kraft Heinz Co (NASDAQ:KHC) among the hedge funds covered by Insider Monkey, at the end of September. Shares of Kraft Heinz Co (NASDAQ:KHC) have traded in the $70-$80 range ever since the merger, which has helped it in maintaining its annual dividend yield to over 3%. On November 5, the company reported its third-quarter results, declaring EPS of $0.44 on revenue of $6.12 billion versus analysts’ estimate of EPS of $0.63 on revenue of $4.70 billion. Trailing Berkshire, Dan Loeb‘s Third point was the second-largest shareholder of Kraft Heinz Co among the funds tracked by us with an ownership of 8.25 million shares of the company, at the end of September.

Disclosure: none