If any investor has stood the test of time, it is 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 last weekend drew thousands of loyal fans who are investors.
Known for his long buy-and-hold strategies and massive portfolio of public and private holdings, he remains one of the preeminent investors in the world. With interest rates increasing again, adding dividend-paying stocks that will rally when rates are cut later this year or in 2025 makes sense.
As we noted recently, Warren Buffet sold 115 million shares of Apple during the first quarter, as the company’s first-quarter profits dropped a stunning 64%. The company posted a $12.7 billion profit compared to last year’s first-quarter profits of $35.5 billion.
During the Berkshire Hathaway conference last weekend. Buffett admitted that he sold all of his Paramount stock at a big loss as part of a net sale of $17 billion in his holdings. We decided to screen the dividend holdings and discovered that five of his stocks had a very solid first quarter.
Why are we covering this?
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With a 15-year track record of covering Mr. Buffett and Berkshire Hathaway at 24/7 Wall St., we feel it is important to keep our readers updated on all of the top news from the financial powerhouse. It should be noted that the financials in Berkshire Hathaway had a very solid first quarter and the sector has lagged until this year.
Ally Financial
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With no buildings, the bank posted solid first-quarter earnings and paid a significant 3.05% dividend. Ally Financial Inc. (NYSE: ALLY), a pioneer in the digital financial services industry, offers a diverse range of innovative digital financial products and services to consumer, commercial, and corporate customers, primarily in the United States and Canada.
It operates through four segments:
- Automotive Finance Operations
- Insurance Operations,
- Mortgage Finance Operations
- Corporate Finance Operations
The Automotive Finance Operations segment offers:
- Automotive financing services, including retail installment sales contracts
- Loans and operating leases
- Term loans to dealers
- Financing dealer floor plans and other lines of credit to dealers
- Warehouse lines to automotive retailers
- Fleet financing. It also provides financing services to companies and municipalities for the purchase or lease of vehicles and vehicle remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, as well as commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contracts and guaranteed asset protection products and underwrites commercial insurance coverages, which primarily insure dealers’ vehicle inventory.
The Mortgage Finance Operations segment manages a consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties and direct-to-consumer mortgage offerings.
The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies, leveraged loans, and commercial real estate products to serve companies in the healthcare industry.
The company also offers commercial banking products and services, securities brokerage, and investment advisory services.
Bank of America
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The company posted strong first-quarter results and pays a solid 2.48% 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
- 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, 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.
Chevron
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This integrated giant is a safer way for investors looking to get positioned in the energy sector, and it pays a rich 4.07% dividend. Chevron Corp. (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 Corp. (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.
Berkshire Hathaway owns 6.7% of Chevron’s outstanding stock with 123.000,000 shares, and the energy giant makes up 5.1% of the portfolio. Each year the stock generates $776,734,888 in dividend income.
Citigroup
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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 3.45% 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.
Occidental Petroleum
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Over the past two years, Berkshire Hathaway has been buying the shares in a big, which now amount to a massive 248,018,128 that pay a decent 1.37% dividend. Occidental Petroleum Corp. (NYSE: OXY) together with its subsidiaries, is engaged in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, Africa, and Latin America.
It operates through three segments:
- Oil and Gas
- Chemical
- Midstream and Marketing
The company’s Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas.
Its Chemical segment manufactures and markets basic chemicals, including:
- Chlorine
- Caustic soda
- Chlorinated organics
- Potassium chemicals
- Ethylene dichloride
- Chlorinated isocyanurates
- Sodium silicates, and calcium chloride
- Vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene
The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also trades around its assets consisting of transportation and storage capacity; and invests in entities.
Mr. Buffett has loaded the boat on Occidental Petroleum, which pays Berkshire Hathaway a reported $897,455,953 in annual dividends. $218,255,953 from the common stock and $679,200,000 from Occidental preferred stock which yields 8%.
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