Investing

7 Dividend Monsters That Warren Buffett Can’t Get Enough Of

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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.

We decided to screen the Berkshire Hathaway portfolio for the highest-yielding stock holdings. We found seven top companies that make sense for growth and income investors and look like perfect stock ideas for 2024.

Bank of America

The company recently posted solid fourth-quarter results and paid a solid 2.81% dividend. Bank of America Corporation (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
  • Operating 5,100 banking centers, 16,300 ATMs, call centers, and online and mobile banking platforms.

Bank of America has expanded into several new US markets, with scale globally positioning them ideally to benefit from accelerating loan growth over the next two years.

Moreover, unlike smaller peers, scale allows the bank to substantially increase investment over the next few years without notably jeopardizing returns, driving further market share gains.

Chevron

This integrated giant is a safer way for investors looking to get positioned in the energy sector and pays a rich 4.04% 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 product
  • 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 the fall that it has 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.

Citigroup

This is another top bank that Warren Buffett bought a massive $2.5 billion worth of stock back in the summer of 2022 that pays a dependable 3.92% dividend. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations, and governments with a broad range of financial products and services.

Citigroup offers

  • Consumer banking and credit
  • Corporate and investment banking
  • Securities brokerage
  • Transaction services
  • Wealth management services.
  • Citi operates and does business in more than 160 countries/ jurisdictions in North America, Latin America, Asia, Europe/Middle East and Africa (EMEA).

Trading at a still cheap 8.6 times estimated 2024 earnings; this company looks very reasonable in a volatile stock market and a dramatically lagged sector.

The Coca-Cola Company

This company remains a top Warren Buffet holding as he owns a massive 400 million shares, which pay a solid 3.06% 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 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 almost 20% % of Monster Beverage (NASDAQ: MNST), which continues to deliver big numbers.

Diageo plc

This company is one of the largest producers of alcoholic beverages in the world and pays a 2.84% dividend. Diageo plc (NYSE: DEO) produces, markets, and sells alcoholic beverages worldwide.

It offers

  • scotch whiskey,
  • gin,
  • vodka,
  • rum,
  • beer and spirits,
  • Irish cream liqueurs,
  • wine,
  • Raki,
  • tequila,
  • Canadian and American whiskey,
  • Cachaça, and
  • brandy
  • adult beverages and ready-to-drink products.

The company’s premium brands comprise:

  • Johnnie Walker
  • Smirnoff
  • Captain Morgan
  • Baileys
  • Tanqueray,
  • Guinness.

Its reserve brands include

  • Johnnie Walker Blue Label,
  • Johnnie Walker Green Label
  • Johnnie Walker Gold Label 18-year-old
  • Johnnie Walker Gold Label Reserve
  • Johnnie Walker Platinum Label 18-year-old
  • John Walker & Sons Collection
  • Johnnie Walker The Gold Route
  • Johnnie Walker The Royal Route

Johnnie Walker super premium brands: The Singleton, Cardhu, Talisker, Lagavulin, and other malt brands.

HP

Warren Buffett stunned Wall Street last year when Berkshire Hathaway reported a purchase of 121 million shares of the venerable tech giant, but he has been selling shares recently, which yield 3.79%. HP, Inc. (NYSE: HPQ) provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally.

The company operates through three segments:

  • Personal Systems
  • Printing
  • Corporate Investments

The Personal Systems segment offers:

  • Commercial and consumer desktop and notebook personal computers
  • Workstations
  • Thin clients
  • Commercial mobility devices
  • Retail point-of-sale systems, displays and peripherals
  • Software, support, and services.

The printing segment provides

  • consumer and commercial printer hardware,
  • supplies, solutions, and services

The corporate investments segment is involved in HP Labs’ business incubation and investment projects. It serves individual consumers, small- and medium-sized businesses, and large enterprises, including government, health, and education customers.

Kraft Heinz

Even in tough times, everybody has to eat, and this company always stands to benefit while paying a hefty 4.31% dividend. The Kraft Heinz Company (NYSE: KHC) was formed almost nine years ago via the merger of H.J. Heinz Company and Kraft Foods Group and together with its subsidiaries, manufactures and markets food and beverage products in the United States, Canada, the United Kingdom, and internationally.

Its products include:

  • condiments and sauces,
  • cheese and dairy products,
  • meals,
  • meats,
  • refreshment beverages,
  • coffee and other groceries.

The company also offers spices and other seasonings.

It sells its products through its own sales organizations, as well as through:

  • Independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts
  • Convenience, value, and club stores
  • Pharmacies and drug stores
  • Mass merchants
  • Foodservice distributors
  • Institutions, including hotels, restaurants, bakeries, hospitals, health care facilities
  • Government agencies and online through various e-commerce platforms and retailers

Warren Buffet’s penchant for only owning the stock of companies he understands inside and out makes sense now for growth and income investors worried about the potential for a steep market decline. While they could sell off in a significant correction, they will hold on far better than most, and many of these top companies (except Apple) are offering the best entry points and dividends in some time.

 

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