Investing

Incredibly, Warren Buffett Has 75% of Berkshire Hathaway in These 5 'Strong Buy' Dividend Stocks

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If any investor has stood the test of time, it is Warren Buffett. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world. His annual Berkshire Hathaway shareholders meeting draws literally thousands of loyal fans who are investors. Known for his long buy-and-hold strategies and his massive portfolio of public and private holdings, he remains one of the preeminent investors in the world.

One reason for Berkshire Hathaway’s stunning success over the years is that Buffett and his right-hand man, Charlie Munger, have always tried to stay with stock ideas they understand. That has proven to be a winning hand. In addition, many of the companies in their portfolio pay solid and reliable dividends.

Longtime investors and Buffett mavens know that “His favorite holding for an S&P 500 stock is forever.” So, it is not really surprising that, for all the success and stature Berkshire Hathaway has in the investment world, only five top companies make up almost 75% of the fund’s total holdings.

All five of these top companies pay reliable dividends and their stocks are rated Buy. However, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

American Express

This stock has backed up recently and is offering the best entry point since late last year, despite posting solid second-quarter results. American Express Co. (NYSE: AXP) provides charge and credit payment card products and travel-related services worldwide. Its products and services include payment and financing products network services accounts payable expense management products and services, and travel and lifestyle services.


The company’s products and services also comprise merchant acquisition and processing, servicing and settlement, point-of-sale marketing and information products and services for merchants, and fraud prevention services, as well as the design and operation of customer loyalty programs. It sells its products and services to consumers, small businesses, midsized companies and large corporations through mobile and online applications, third-party vendors and business partners, direct mail, telephone, in-house sales teams and direct response advertising.

Shareholders receive a 1.35% yield. Wells Fargo has a $190 price target on American Express stock. The consensus target is $179.46, and shares closed trading on Tuesday at $154.66.

Apple

This legacy technology giant makes up a stunning 40% of the Berkshire Hathaway portfolio. Apple Inc. (NASDAQ: AAPL) designs, manufactures and markets consumer electronics and computers, and it has developed its own proprietary iOS and Mac OS X operating systems and related software platform/ecosystem.

Revenues are principally derived from the iPhone line of smartphones, the Macintosh family of notebook and desktop computers, iPad tablets, iPod portable digital music players, and the Apple Watch. The company also realizes revenue from software, peripherals, digital media and services. The technology giant consistently has churned out new products that the public loves, and an inexpensive iPhone was a recent offering. With a September debut for the iPhone 14, interest in the tech giant will ramp up once again.

Apple stock comes with a 0.57% dividend. Wedbush’s $220 price target is well above the $190.00 consensus target. The stock closed on Tuesday at $158.91.

Bank of America

The company posted very solid second-quarter results, and Buffett owns a stunning 1.1 billion of its shares. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, corporations and governments in the United States and internationally. It operates 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms.

Bank of America has expanded into several new U.S. markets, with scale across the country positioning it ideally to benefit from accelerating loan growth over the next two years. Moreover, unlike smaller peers, scale allows the bank to increase investment substantially over the next few years without notably jeopardizing returns, driving further market share gains.

Shareholders receive a 2.60% dividend. The Barclays target price is $51, while the consensus target is $42.41. Bank of America stock closed at $34.09 on Tuesday.

Chevron

This integrated giant posted huge second-quarter results and remains a safer way for investors looking to get positioned in the energy sector. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide.
Chevron’s Upstream segment is involved in the exploration, development, production and transportation of crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas (LNG); transportation of crude oil through pipelines; and transportation, storage and marketing of natural gas, as well as operating a gas-to-liquids plant.

The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products and lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It is also involved in cash management and debt financing activities, insurance operations, real estate activities and technology businesses.

Chevron stock comes with a 3.48% dividend. The $202 Credit Suisse target price compares with a $178.21 consensus target and Tuesday’s close at $160.62 a share.

Coca-Cola

This remains a top Buffet holding, as he owns a massive 400 million shares. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It has an incredibly strong worldwide brand, with 40% overseas sales.

The company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.

Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.

Investors receive a 2.74% dividend. The target price for Coca-Cola stock at Truist Financial is $75. The consensus target of $69.61 is a bit closer to Tuesday’s close at $62.15.


Given Warren Buffet’s proclivity for only owning the stock of companies that he understands inside and out, these make sense now for growth and income investors worried about the potential for a steep market decline, which it appears we are in yet again. While they could sell off in a very large correction, they will hold up far better than most. Now is the time to nibble at some of these top picks.

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