In this article, we discuss the 10 best dividend stocks in Warren Buffett’s most recently revealed 13F portfolio. You can skip our detailed analysis of Berkshire Hathaway’s past performance and Buffett’s investment strategies and go directly to read Warren Buffett’s Latest Portfolio: 5 Dividend Stock Picks.
Warren Buffett, the CEO and Chairman of Berkshire Hathaway, recently grabbed headlines after his holding company invested over $1 billion in Nubank, a Brazilian digital bank that focuses on cryptocurrency. In the past, Buffett has asserted that cryptocurrencies are an unproductive asset with no unique value. However, his equity portfolio as of the end of 2021 includes multiple companies with direct or indirect exposure to cryptocurrencies. This comes at a time when crypto-related assets grew to $63 billion by the end of 2021, compared with $24 billion at the beginning of the year, as reported by Bloomberg.
Buffett’s value-based investment philosophy has resulted in substantial returns for shareholders over the years. From 1965 to 2020, Berkshire Hathaway has averaged a 20% return per year, which is double the S&P 500’s return of 10.2% during the same period. Moreover, his holding company’s monthly average returns came in at 0.97% from 1999 to 2017, compared with a 0.38% return for the broader market index. As of February 2022, Buffett’s real-time net worth was recorded at nearly $114 billion, up from $102 billion in October 2021, according to Forbes.
During Q4 2021, Berkshire’s 13F portfolio value increased to $331 billion from $293 billion in the previous quarter. The portfolio consists of 44 companies, the top five of which represented 79% of the portfolio’s value. Buffett invests heavily in the technology and finance sectors, with some of Berkshire’s major holdings including Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Verizon Communications Inc. (NYSE:VZ).
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Our Methodology:
In this article, we will focus on the dividend stocks in Warren Buffett’s portfolio. For this list, we considered Berkshire Hathaway’s 13F portfolio as of December 31, 2021.
Warren Buffett’s Latest Portfolio: 10 Dividend Stock Picks
10. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 67
Berkshire Hathaway’s Stake Value: $51,593,000
Dividend Yield as of February 21: 2.18%
The Procter & Gamble Company (NYSE:PG), an American consumer goods company, currently pays a quarterly dividend of $0.8698 per share, increasing it by 10% in 2021. The stock’s current dividend yield stands at 2.18%. The Procter & Gamble Company (NYSE:PG) has been increasing its dividend for the past 65 years and has grown its dividend at a CAGR of 5% over the past five years.
In Q4 2021, Berkshire Hathaway did not change its position in The Procter & Gamble Company (NYSE:PG), maintaining a stake worth roughly $51.6 million. The company represented 0.01% of Warren Buffett’s portfolio, far less than other major holdings of Berkshire Hathaway like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Verizon Communications Inc. (NYSE:VZ). In January, Morgan Stanley raised its price target on The Procter & Gamble Company (NYSE:PG) to $177, while maintaining an ‘Overweight’ rating on the shares, naming the stock its favorite in the Household Products category.
At the end of Q4 2021, 67 hedge funds tracked by Insider Monkey held stakes in The Procter & Gamble Company (NYSE:PG), down from 69 in the previous quarter. The total value of these stakes is over $6.6 billion.
9. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Berkshire Hathaway’s Stake Value: $55,957,000
Dividend Yield as of February 21: 2.60%
Though there was a decline in the number of hedge funds holding stakes in Johnson & Johnson (NYSE:JNJ) during Q4, analysts remain positive on the company’s recent performance and near-term projections. In January, both Raymond James and Citigroup raised their price targets on the stock to $185 and $195, respectively.
Of the 927 hedge funds tracked by Insider Monkey which filed 13Fs during Q4, 83 of them held stakes in Johnson & Johnson (NYSE:JNJ) valued at over $7.3 billion. In comparison, 88 hedge funds held positions in the company in the previous quarter, with stakes valued at roughly $6.9 billion. In the fourth quarter, Fundsmith LLP was the largest shareholder among them, owning shares worth over $1.2 billion.
Johnson & Johnson (NYSE:JNJ) is one of the best dividend stocks in Warren Buffett’s portfolio as the company has been increasing its dividend consistently for the past six decades. In 2021, the company raised its quarterly dividend by 5% to $1.06 per share, which yields 2.60% as of February 21. In Q4 2021, Johnson & Johnson (NYSE:JNJ) accounted for 0.01% of Berkshire Hathaway’s portfolio, as the hedge fund held shares worth roughly $56 million in the company.
Distillate Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter. Here is what the firm had to say:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
8. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
Berkshire Hathaway’s Stake Value: $23,684,001,000
Dividend Yield as of February 21: 2.81%
American multinational beverage giant The Coca-Cola Company (NYSE:KO) experienced positive hedge fund sentiment in Q4, as the number of hedge funds tracked by Insider Monkey holding stakes in the company jumped to 70, up from 61 in the previous quarter. The consolidated value of those stakes was $28.6 billion.
On February 17, The Coca-Cola Company (NYSE:KO) increased its quarterly dividend by 4.8%, marking the company’s 60th straight year of consistent dividend growth. It pays a quarterly dividend of $0.44 per share, with a dividend yield of 2.81% as of February 21. Thanks to The Coca-Cola Company (NYSE:KO) continuing to improve its business model during the pandemic, Evercore ISI analyst Robert Ottenstein lifted the firm’s price target on the stock to $70 and has an ‘Outperform’ rating on the shares.
Berkshire Hathaway is one of the oldest shareholders of The Coca-Cola Company (NYSE:KO), as it started building its position in 1988. In Q4 2021, the holding company held over $23.6 billion worth of The Coca-Cola Company (NYSE:KO) shares, accounting for 7.15% of Warren Buffett’s portfolio.
7. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 66
Berkshire Hathaway’s Stake Value: $324,387,000
Dividend Yield as of February 21: 3.20%
JPMorgan presented a positive stance on American multinational pharmaceutical company Bristol-Myers Squibb Company (NYSE:BMY) in December, lifting its price target on the stock to $80 and maintaining an ‘Overweight’ rating on the shares.
On the other hand, Berkshire Hathaway significantly reduced its position in Bristol-Myers Squibb Company (NYSE:BMY) during Q4, slashing it by 77% to leave it with over $324.3 million worth of shares. The company accounted for 0.09% of Berkshire’s 13F portfolio.
Bristol-Myers Squibb Company (NYSE:BMY) is famous among income investors as the company maintains a 15-year track record of consistent dividend growth and hasn’t slashed its dividend in over 30 years. Currently, its quarterly dividend stands at $0.54 per share, which was raised by 10% in December 2021. As of February 21, the stock’s dividend yield is 3.20%.
By the end of Q4 2021, 66 hedge funds tracked by Insider Monkey were bullish on Bristol-Myers Squibb Company (NYSE:BMY), compared with 74 in the previous quarter. The total value of these stakes is over $3.3 billion. Among these hedge funds, Two Sigma Advisors was the company’s largest shareholder in Q4, holding shares worth $412.5 million.
6. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 46
Berkshire Hathaway’s Stake Value: $7,100,894,000
Dividend Yield as of February 21: 3.22%
U.S. Bancorp (NYSE:USB), an American bank holding company, was the eighth-largest holding of Berkshire Hathaway in Q4 2021. The hedge fund held stakes worth over $7.1 billion in the company, which represented 2.14% of Warren Buffett’s 13F portfolio, ranking it alongside Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Verizon Communications Inc. (NYSE:VZ) as some of the hedge fund’s major holdings.
On June 28, 2021, U.S. Bancorp (NYSE:USB) raised its quarterly dividend by 10% to $0.46 per share. The stock’s dividend yield stands at 3.22% at the time of the writing. Moreover, U.S. Bancorp (NYSE:USB)’s 10-year annualized dividend growth rate is 15%, which makes it one of the best dividend stocks for income investors. This January, Odeon Capital upgraded U.S. Bancorp (NYSE:USB) to ‘Buy’ from ‘Hold’.
Along with Berkshire Hathaway, Millennium Management was also one of the leading shareholders of U.S. Bancorp (NYSE:USB) in Q4, holding shares worth over $138.7 million. Overall, 46 hedge funds tracked by Insider Monkey held shares in the company in Q4, up from 42 in the previous quarter. The total value of these stakes is roughly $8 billion.
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Disclosure. None. Warren Buffett’s Latest Portfolio: 10 Dividend Stock Picks is originally published on Insider Monkey.
