Warren Buffett’s Top 5 Dividend Stock Picks

2. Bank of America Corporation (NYSE:BAC)

Berkshire Hathaway’s Stake: $33.5 billion

Bank of America Corporation (NYSE:BAC) remains the favorite bank stock of Warren Buffett. The Oracle of Omaha  said during the 2023 shareholders meeting that there’s a lot of uncertainty in the banking sector amid the current crisis, but he continues to stick with Bank of America Corporation (NYSE:BAC).

“We’re very cautious… about ownership of banks and we do remain with one bank… I like Bank of America and I like the management,” Buffett said.

As of the end of 2022, Berkshire Hathaway had owned $33 billion stake in Bank of America Corporation (NYSE:BAC).

Bank of America Corporation (NYSE:BAC) has upped its dividend for five decades.

Oakmark Equity and Income Fund made the following comment about Bank of America Corporation (NYSE:BAC) in its Q1 2023 investor letter:

“The Oakmark Equity and Income Fund has 29% of its equity portfolio in financials. This made the March sell-off painful, but we do not believe that this has meaningfully changed the value of most of our financial equity holdings. In fact, we were adding to financial positions throughout March. We believe that one way to analyze our financial holdings is to look at them in different buckets given their various business models and risk profiles. Almost 30% of our financial exposure is in insurance companies and insurance brokers. Insurance companies have very stable liability profiles, so the main risk is a change in asset values. We are comfortable with their investment portfolios and think these stocks are quite attractive. Around 5% of our financials are asset managers. This leaves a little over 40% of the financials exposure in a varied group of banks and lenders. About 5% of that portfolio is in Bank of America Corporation (NYSE:BAC) and State Street. These two banks are designated as Systematically Important Financial Institutions and are held to higher regulatory standards. Our largest single financials holding is Bank of America, which has grown deposits during March, and we believe it is one of the best managed companies in the sector.”