Investing

Warren Buffett Owns Hundreds of Millions of Shares of 2 High-Yielding Dividend Aristocrats

Lee Jackson

Published: January 8, 2024 11:11 am

If any investor has stood the test of time, it’s Warren Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock star-like presence in the investing world, and his annual Berkshire Hathaway shareholders meeting draws 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 entire world.

Long-time investors and Buffett mavens are familiar with his quote, “His favorite holding for an S&P 500 stock is forever”, so it’s not surprising to report that for all of the success and stature Berkshire Hathaway has in the investment world, 5 top companies make up almost 75% of the fund’s total holdings. While much more concentrated than most portfolio managers would ever consider, the strategy has worked for Berkshire Hathaway investors for years and likely will in the future.

Two stocks Warren Buffett has in the Berkshire Hathaway portfolio are members of the exclusive Dividend Aristocrats club. The 68 companies that cut the 2024 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. But the requirements go even further, with the following attributes also mandatory for membership on the dividend aristocrats list:

• Companies must be worth at least $3 billion during each quarterly rebalancing
• Average daily volume of at least $5 million in transactions for every trailing three-month period at every quarter
• Be a member of the S&P 500

Here are the two Dividend Aristocrats Warren Buffett owns.

Chevron

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This integrated giant is a safer way for investors looking to get positioned in the energy sector and pays a rich 4.02% dividend. Chevron Corporation (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries.

The company operates in two segments:

• Upstream
• Downstream

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines; 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 renewable fuels
• Transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

Chevron announced in October that it entered into a definitive agreement with Hess Corporation (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion.

Chevron is also involved in cash management, debt financing, insurance operations, real estate, and technology businesses.

This is one of the two energy holdings in Berkshire Hathaway, which holds 110 million shares of the integrated giant.

The Coca-Cola Company

Source: Justin Sullivan / Getty Images

This company remains a top Warren Buffet holding as he owns a massive 400 million shares. Shareholders are paid a solid 3.08% dividend. The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands.

Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the Company’s portfolio features 20 billion-dollar brands, including

• Diet Coke
• Fanta
• Sprite
• Coca-Cola Zero
• Vitaminwater
• Powerade
• Minute Maid
• Simply
• Georgia
• Del Valle

Globally, they are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks.

Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of more than 1.9 billion servings a day. It’s also important to remember that the company owns 19.63% of Monster Beverage (NASDAQ: MNST), which continues to deliver big numbers.

Two Dividend Aristocrats who have been longtime members of the Berkshire Hathaway portfolio generate steady and dependable dividends; last year alone, Buffett collected $704 million in dividends from just Coke, so you can bet that it will remain in the portfolio for years come, as will the others.