The 6 Highest Yielding Warren Buffet Stocks Have Serious Upside Potential

Investing

Published: February 29, 2024 8:10 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.

We screened the Berkshire Hathaway portfolio for the six stocks with the highest dividend yields. In a world where total return may be the best plan of action for the rest of 2024, these top companies look well positioned for a challenging second quarter as the market had a massive run over the last six months.

In addition, while the rate hikes may be over, exuberance over rate cuts in March was very short-sighted and likely will come in the summer at the earliest as inflation remains sticky and well above the Federal Reserve’s 2% target.

Chevron

This integrated giant is a safer way for investors looking to get positioned in the energy sector and has a sweet 4.05% dividend. Through its subsidiaries, Chevron Corporation (NYSE: CVX) engages in integrated energy and chemicals operations worldwide.

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; and transportation, storage
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 refined 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

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

Chevron Corporation announced last 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 a top bank that Warren Buffett bought a massive $2.5 billion worth of stock back in the summer of 2022 that pays a dependable 3.77% 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 9.5 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 and pays a dependable 3.22% 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 16.7% of Monster Beverage (NASDAQ: MNST), which continues to deliver big numbers.

HP

Warren Buffett stunned Wall Street in 2022 when Berkshire Hathaway reported a purchase of 121 million shares of the venerable tech giant, but he has been selling shares recently, which yield 3.82%. 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.

Jefferies Financial

This broker-dealer is an excellent idea for those looking for financials besides money center banks. It pays a 2.91% dividend. Jefferies Financial Group, Inc. (NYSE: JEF) engages in investment banking capital markets and asset management businesses in the Americas, Europe, the Middle East, Africa, and Asia.

The company operates in four segments:

Investment Banking and Capital Markets
Asset Management
Merchant Banking
Corporate

It provides investment banking, advisory services concerning mergers or acquisitions, restructurings or recapitalizations, private capital advisory transactions, equity and debt underwriting; and corporate lending.

In addition, Jefferies offers

Financing
Securities lending and other prime brokerage services
Equities research and finance
Wealth management services

In addition, it provides clients with:

Sales and trading of investment grade corporate bonds, U.S. and European government and agency securities
Municipal bonds, mortgage-backed and asset-backed securities
Leveraged loans, consumer loans, high yield and distressed securities
Emerging markets debt
Interest rate and credit derivative products
Foreign exchange trade execution and securitization.

It also manages, invests in, and provides services to various alternative asset management platforms across investment strategies and asset classes.

Kraft Heinz

Even in bad times, everybody has to eat, and this company always stands to benefit while paying a tremendous 4.47% dividend. The Kraft Heinz Company (NYSE: KHC) was formed via the merger of H.J. Heinz Company and Kraft Foods Group.

The company is a leading global food company with $25 billion of estimated annual revenues generated by well-known brands such as Kraft, Heinz, Oscar Meyer, and Maxwell House.

Kraft Heinz is North America’s third-largest food and beverage manufacturer, and it derives 76% of its revenues from that market and 24% from International.

The Company’s additional brands include: