In this article, we discuss Warren Buffett’s dividend portfolio. If you want to read our detailed analysis of Berkshire Hathaway’s top 10 dividend stocks, go directly to read Warren Buffett’s Dividend Portfolio: 10 Stocks to Watch.
5. The Kraft Heinz Company (NASDAQ:KHC)
Dividend Yield as of May 19: 4.10%
Quarterly Dividend: $0.40 per share
The Kraft Heinz Company (NASDAQ:KHC) was the sixth-largest holding of Berkshire Hathaway in Q1 2022. The hedge fund held shares worth roughly $13 billion in the company, which represented 3.52% of Warren Buffett’s portfolio.
As of Q4 2021, 39 hedge funds tracked by Insider Monkey reported owning stakes in The Kraft Heinz Company (NASDAQ:KHC), up from 33 in the previous quarter. The total value of these stakes is over $12.2 billion. Along with Berkshire Hathaway, First Eagle Investment Management also held a significant stake in the company, worth $254.3 million.
In 2019, The Kraft Heinz Company (NASDAQ:KHC) slashed its dividend by 36% to $0.40 per share and has maintained a quarterly dividend of the same amount ever since. The stock’s dividend yield stood at 4.10%, as of May 19. Warren Buffett’s Berkshire Hathaway has been investing in the company since the third quarter of 2015 and has benefitted a lot from its dividend.
In May, BofA added The Kraft Heinz Company (NASDAQ:KHC) to its ‘US 1’ list, naming the company as one of its best investment ideas, and kept a Buy rating on the shares.
4. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of May 19: 2.88%
Quarterly Dividend: $0.44 per share
The Coca-Cola Company (NYSE:KO) is one of the oldest holdings of Berkshire Hathaway, as the hedge fund started investing in the company in 1988. The stock has soared over 2,000% ever since. In March, the company announced a 4.8% hike in its quarterly dividend to $0.44 per share. This was the company’s 60th consecutive year of dividend growth. The stock’s dividend yield stood at 2.88%, as of May 19.
During the first quarter of 2021, Berkshire Hathaway did not change its position in The Coca-Cola Company (NYSE:KO), holding shares worth $400 million. The company was the fifth-largest holding of the hedge fund and represented 6.82% of Warren Buffett’s portfolio.
At the end of Q4 2021, 70 hedge funds tracked by Insider Monkey reported owning stakes in the company, compared with 64 in the previous quarter. These stakes hold a consolidated value of over $2.86 billion. With shares worth over $801.5 million, Rajiv Jain’s GQG Partners was one of the major stakeholders of the company in Q1 2022.
ClearBridge Investments mentioned The Coca-Cola Company (NYSE:KO) in its Q4 2021 investor letter. Here is what the firm has to say:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
3. Apple Inc. (NASDAQ:AAPL)
Dividend Yield as of May 19: 0.65%
Quarterly Dividend: $0.23 per share
Berkshire Hathaway started buying Apple Inc. (NASDAQ:AAPL) in 2016 and today the company is the largest holding of the hedge fund. The hedge fund owned shares worth over $155.5 billion in the tech giant, which accounted for 42.78% of Warren Buffett’s portfolio.
Apple Inc. (NASDAQ:AAPL) in April announced a 5% increase in its quarterly dividend to $0.23 per share. As of May 19, the stock’s dividend yield stood at 0.65%.
In May, Morgan Stanley estimated an 8% year-over-year growth in Apple Inc.’s (NASDAQ:AAPL) App Store net revenue growth. The firm raised its price target on the stock to $195, with an Overweight rating on the shares.
ClearBridge Investments mentioned Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter. Here is what the firm has to say:
“Despite these mixed emerging growth results, the ClearBridge Global Growth Strategy outperformed the benchmark due to resilience among our secular and structural growth holdings. The bulk of these contributions came from U.S. mega-cap growth stocks Apple and Microsoft which continued to uniquely act both offensively and defensively as they have through most of the pandemic.”
2. Bank of America Corporation (NYSE:BAC)
Dividend Yield as of May 19: 2.41%
Quarterly Dividend: $0.21 per share
In April, Morgan Stanley highlighted the higher loan portfolio of Bank of America Corporation (NYSE:BAC) along with its strong credit quality. The firm upgraded the stock to Equal Weight, with a $49 price target.
Berkshire Hathaway started building its position in Bank of America Corporation (NYSE:BAC) in 2011, with shares worth over $5 billion. At the end of Q1 2022, the hedge fund owned $41.6 billion worth of shares in the company, which represented 11.4% of Warren Buffett’s portfolio.
At the end of Q4 2021, 84 hedge funds tracked by Insider Monkey held stakes in Bank of America Corporation (NYSE:BAC), up from 72 in the previous quarter. These stakes hold a consolidated value of over $47.8 billion.
Miller Value Partners mentioned Bank of America Corporation (NYSE:BAC) in its Q1 2022 investor letter. Here is what the firm has to say:
“There are many times when volatility and beta give false signals. Banks outperformed in the post-tech bubble bear market of the early 2000s. At the market peak prior to the financial crisis (when risk was the highest in those names!), Bank of America (NYSE:BAC) had a 0.9x beta (based on the trailing 5 years) suggesting its “risk” was below the market’s. Wrong! It massively underperformed in the financial crisis. Realized beta over the 5 years from the pre-crisis’ 2006 peak measured 2.3x.
A much better indicator of actual risk, both before and after the financial crisis, was the quality of the balance sheet and risk-taking appetite. Beta is backwards looking and non-stationary. Relying on it underestimated risk going into the financial crisis and overestimated coming out of it (its beta has continued to fall over the past decade).
We care greatly about risk. We spend a significant amount of time thinking about the risks to our investments. We measure risk as permanent impairment of capital, which means the prices and values don’t bounce back. Business fundamentals determine risk.”
1. Chevron Corporation (NYSE:CVX)
Dividend Yield as of May 19: 3.38%
Quarterly Dividend: $1.42 per share
Chevron Corporation (NYSE:CVX) was one of the biggest purchases of Berkshire Hathaway during Q1 2022, as the hedge fund increased its position in the company significantly by 317%. The company accounted for 7.12% of Warren Buffett’s portfolio in Q1 2022.
On April 27, Chevron Corporation (NYSE:CVX) raised its quarterly dividend for the 35th consecutive year to $1.42 per share, from the previous dividend of $1.34 per share. As of May 19, the stock’s dividend yield came in at 3.3%.
Fisher Asset Management was one of the company’s major shareholders in Q1 2022, holding stakes worth over $1 billion. Overall, 53 hedge funds tracked by Insider Monkey held stakes in the company in Q4 2021, worth $6.5 billion. In comparison, 51 hedge funds held shares in the company in the previous quarter, valued at $4.4 billion.
ClearBridge Investments mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm has to say:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
You can also take a look at 10 Stocks to Buy and Hold for Long Term According to Warren Buffett and 11 Best Value Stocks To Buy According To Warren Buffett
