Investing

Sell the Long Rally Now and Move to These 6 Warren Buffett Top Dividend Winners

Lee Jackson

Published: April 2, 2024 10:15 am

Last Updated: April 4, 2024 7:17 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.

The stock market has been on a massive roll since last October. The S&P 500 and the Nasdaq finished the first quarter up over 10%, and the venerable Dow Jones Industrial added almost 6%. It was a sweet first quarter for stock investors. However, some dark clouds may be on the horizon, and the first trading day of the second quarter hinted at just that. Stocks got crushed as yields exploded double-digits higher on all the longer maturities.

Nobody likes a bull market more than 24/7 Wall St., but we could be poised for a big market correction. Investors may be wise to take profits on more aggressive stocks now and move capital into safer dividend-yielding stocks. We screened Warren Buffett’s Berkshire Hathaway portfolio for conservative and safe dividend stocks. Six are timely ideas now, and all are rated Buy across Wall Street.

Bank of America

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The company posted strong fourth-quarter results and pays a solid 2.81% dividend. 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
• 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, and its global scale ideally positions it 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.

Warren Buffett owns 1,032 852,006 bank shares, 13% of the float, and 9.5% of Berkshire Hathaway’s portfolio.

Coca-Cola

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This company remains a top Warren Buffet holding as he owns a massive 400 million shares, which he started buying in 1988. Buffett owns 9.3% of the float, and the stock makes up 6.5% of the portfolio. Coca-Cola Co. (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, it is the number one 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 Corp. (NASDAQ: MNST), which continues to deliver big numbers.

Investors are paid a very dependable 3.21% dividend.

Diageo

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Diageo PLC (NYSE: DEO) is one of the largest producers of alcoholic beverages in the world and pays a solid 2.70% dividend. It produces, markets, and sells alcoholic beverages worldwide.

It offers:

• Scotch whiskey
• Gin
• Vodka
• Rum
• Beer
• Irish cream liqueurs
• Wine
• Raki
• Tequila
• Canadian and American whiskey
• Cachaça, and brandy, as well as adult beverages and ready-to-drink products

The company’s premium brands comprise Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray, and 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

Kraft Heinz

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Even in bad times, everybody has to eat, and this company always stands to benefit while paying a tremendous 4.47% dividend. Kraft Heinz Co. (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 estimated annual revenues of $25 billion from 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:

• ABC
• Capri Sun
• Classico
• Jell-O
• Kool-Aid
• Lunchables
• Ore-Ida
• Oscar Mayer
• Philadelphia
• Planters
• Plasmon
• Quero
• Weight Watchers
• Smart Ones 
• Velveeta

 Kroger

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This grocery chain giant is always a solid and conservative idea that pays a 2.03% dividend. Kroger Co. (NYSE: KR) is a retailer in the United States. It operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses.

Its combination of food and drug stores offers:

• Natural food and organic sections
• Pharmacies
• General merchandise
• Pet centers
• Fresh seafood and organic produce

Multi-department stores offer apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys.

The company’s marketplace stores offer:

• Full-service grocery, pharmacy, health and beauty care
• Perishable goods, as well as general merchandise, including apparel, home goods, and toys
• Price impact warehouse stores provide grocery, health, and beauty care items, meat, dairy, baked goods, and fresh produce items

The company also manufactures and processes food products in its supermarkets and online; it sells fuel through 1,613 fuel centers.

Kroger owns 22 companies, including Harris Teeter, Smith’s Food and Drug, Ralphs, King Soopers/City Market, and Roundy’s Supermarkets.

Kroger is in the process of buying Albertsons Companies Inc. (NYSE: ACI) and will sell more than 400 stores and other assets for about $1.9 billion. This is to clear a path for a merger with antitrust regulators reviewing a deal that would merge two of the nation’s largest grocery chains. Negotiations with the Federal Trade Commission have proven to be difficult, so this process could take a while to play out and could be turned down.

Procter & Gamble

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Procter & Gamble o. (NYSE: PG) is one of the world’s largest consumer products companies. It offers substantial dividends and has very recognizable products. Buffett has been buying shares since 2005.

Proctor and Gamble operate under five segments:

• Beauty
• Grooming
• Health Care
• Fabric & Home Care
• Baby & Family Care

Brands include:

• Pampers
• Tide
• Bounty
• Charmin
• Gillette
• Oral B
• Crest
• Olay
• Pantene
• Head & Shoulders
• Ariel
• Gain
• Always
• Tampax
• Downy
• Dawn

P&G sells its products through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, baby stores, specialty beauty stores, high-frequency stores, and pharmacies.

The company has been innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors with years of steady growth and dividends.

Shareholders are paid a very dependable 2.35% dividend.