Warren Buffett Has Billions Invested in These 5 Dividend Stocks

Warren Buffett of Berkshire Hathaway is arguably the most successful investor in history, having started with nothing and achieving a net worth of $65 billion dollars (and that despite donating tens of billions of dollars along the way). While Buffett has achieved his wealth by using many different investment styles over time, perhaps his most successful strategy has been to invest in wide-moat stocks that pay generous dividends.

In this article, we’ll look at some of Buffett’s favorite dividend investments, which include Wells Fargo & Co (NYSE:WFC), The Coca-Cola Co (NYSE:KO), International Business Machines Corp. (NYSE:IBM), Phillips 66 (NYSE:PSX), and General Motors Company (NYSE:GM).

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#5 General Motors Company (NYSE:GM)

– Shares Held (as of June 30): 50 million
– Value of Shares (as of June 30): $1.42 billion

GM recently made some waves when it introduced the Chevy Bolt, which at around $37,500 per vehicle costs about as much as Tesla Motors Inc (NASDAQ:TSLA)’s planned Model 3. The difference is that the Chevy Bolt goes a little bit further, with a planned range of 238 miles versus the Model 3’s target of 218 miles. Although the car won’t make a big impact in General Motors’ earnings in the near-term, the successful production and sale of the car will show investors that General Motors can successfully navigate the coming tectonic changes ahead in the automotive industry (such as with autonomous vehicles, ride sharing, the shift to EVs, etc.). With an annual dividend yield of 4.91%, General Motors Company (NYSE:GM) is one of Buffett’s higher-yielding dividend stocks. Buffett owns 50 million shares of GM as of June 30, with the position good for slightly over 1% of the value of his equity portfolio.

#4 Phillips 66 (NYSE:PSX)

– Shares Held (as of June 30): 78.78 million
– Value of Shares (as of June 30): $6.25 billion

Unlike the other dividend stocks on this list, Buffett has been adding to his position in Phillips 66 (NYSE:PSX) quite a bit recently. In the second quarter, Buffett increased his holding in the refiner by 3.231 million shares to 78.78 million shares at the end of June. Those shares were worth north of $6.2 billion on June 30 and accounted for almost 5% of the value of the legendary investor’s portfolio. Given that refiners can do well in a lower-for-longer crude price environment and that Phillips 66 has a wide moat (refining is very capital intensive and the sector is concentrated), it’s not hard to see why the Oracle of Omaha likes the stock. Shares currently pay an annual payout of $2.52 per share, good for a 3.19% yield.

Three more dividend stocks favored by Warren Buffett are disclosed on the next page.

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

– Shares Held (as of June 30): 81.23 million
– Value of Shares (as of June 30): $12.33 billion

Although International Business Machines Corp. (NYSE:IBM) has pretty much been a disappointment for Buffett since he added the tech company to his portfolio several years ago, the Oracle has nevertheless chosen to keep his position in the stock. At the end of June, Buffett owned 81.23 million IBM shares worth $12.33 billion. Long investors hope that Big Blue’s investments in artificial intelligence (Watson), quantum computing, and cloud tech will pay off in the long run, as its current cost cutting, asset selling, and buyback initiatives can only go so far. Fortunately, Buffett has a very long investing horizon and IBM remains indispensable to many big corporation’s IT departments. Big Blue’s annual dividend of $5.60 per share, offering a current 3.64% yield, certainly helps Buffett hold onto the stock.

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

– Shares Held (as of June 30): 400 million
– Value of Shares (as of June 30): $18.13 billion

Although most of Buffett’s notable purchases in The Coca-Cola Co (NYSE:KO) occurred decades ago (when the stock was a demographic/emerging market play), the Oracle has chosen to retain his position in the soft drink maker, owning 400 million shares of it worth over $18 billion at the end of June. While no longer a demographic play, Coca-Cola is now a very solid dividend play. Coca Cola has raised its payout every year for 53-straight years and its stock now pays an annual dividend of $1.40 per share, which equates to a 3.32% yield. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 55 owned shares of The Coca-Cola Co (NYSE:KO) at the end of June, down by seven funds quarter-over-quarter.

#1 Wells Fargo & Co (NYSE:WFC)

– Shares Held (as of June 30): 479.7 million
– Value of Shares (as of June 30): $22.7 billion

With almost 480 million shares of Wells Fargo & Co (NYSE:WFC) in his holding company’s portfolio on June 30, the bank ranked as Warren Buffett’s favorite, accounting for 17.5% of the value of Berkshire’s portfolio. Due to a big scandal concerning Wells Fargo’s previous sales practices, such as when some of the bank’s former employees fraudulently opened around 2 million customer accounts to meet sales targets, shares of the bank have fallen sharply from their highs this year and are now down by 14% year-to-date. The fall might present an opportunity for long-term investors however, if the bank’s management can navigate the company through the publicity crisis. Wells Fargo still has one of the lowest cost of capital figures in the industry. Shares of the bank now yield a dividend payout of 3.35%. Ken Fisher‘s Fisher Asset Management owned almost 19 million Wells Fargo shares at the end of June.

Disclosure: None