Investing

Warren Buffett's Nine Top Dividend Stocks

6. Coca-Cola
> Dividend yield: 3.0%
> Price per share: $40.49
> Market cap: $178.0 billion

Coca-Cola Co. (NYSE: KO) is a long-time holding of Berkshire Hathaway. It fits in neatly with Buffett’s long-term “buy and hold” strategy. Despite this, Coca-Cola has been a recent target for critics, who claim its executive compensation plan is excessive. Buffett himself opposed the plan, but elected to abstain rather than vote against it. Health concerns over soft drinks are an ongoing issue for Coca-Cola, as well as for rival PepsiCo, and have dampened sales. Coke currently offers a 3.0% dividend. Coca-Cola shares have declined nearly 7% from their 52-week high of $43.43 to $40.49 a share. The average analyst price target for the stock is currently $44.59.

7. Wells Fargo
> Dividend yield: 2.8%
> Price per share: $49.09
> Market cap: $258.5 billion

Wells Fargo & Co. (NYSE: WFC) is Buffett’s favorite bank and the largest position in the Berkshire Hathaway portfolio of publicly traded companies, totaling more than $21 billion as of Berkshire’s most recent SEC filing. In fact, Buffett keeps buying more shares each quarter. Wells Fargo is currently yielding 2.8% after raising its quarterly dividend in April to $0.35 per share from $0.30 per share. At $49.09, the stock is only slightly below its 52-week high of $50.49 per share. Analysts’ consensus price target for Wells Fargo is slightly above $52 per share.

8. Exxon Mobil
> Dividend yield: 2.5%
> Price per share: $102.67
> Market cap: $443.7 billion

Exxon Mobil Corp. (NYSE: XOM) shares currently provide a dividend yield of just 2.5%, well below that of rival ConocoPhillips. One likely advantage for Buffett is that Exxon Mobil’s size allows Berkshire Hathaway to establish a larger position in it than in other oil plays, such as another Buffett holding ConocoPhillips. Currently, Exxon Mobil’s market cap is more than $445 billion, versus only about $95 billion for ConocoPhillips. Exxon Mobil has historically been an exceptionally reliable investment, steadily boosting its dividend each year. It is also one of just three companies with a perfect credit rating from Standard & Poor’s, alongside Microsoft and Johnson & Johnson.

9. Walmart
> Dividend yield: 2.4%
> Price per share: $78.01
> Market cap: $251.8 billion

Buffett’s Wal-Mart Stores Inc. (NYSE: WMT) stake has grown to nearly 50 million shares, valued at nearly $3.9 billion as of the company’s most recent filing. With a recent dividend hike, from 47 cents to 48 cents per share each quarter, Walmart stock now yields 2.4%. At $78.01, shares are down roughly 4% from their 52-week high of $81.37. The current consensus price target from analysts is $81 per share. Beyond its dividend, its international presence and the company’s management track record — factors that may appeal to individual investors — Walmart’s market cap is $252 billion. This allows the massive Berkshire Hathaway portfolio to more-easily buy or sell shares without distorting the market.