Warren Buffett and Greg Abel Are Bullish on 4 Contrarian Stocks That All Pay Dividends

If any investor has stood the test of time, it’s Warren Buffett, and with good reason. For 60 years, the “Oracle of Omaha” had a rock-star-like presence in the investing world, and his annual Berkshire Hathaway (NYSE: BRK-B | BRK-B Price Prediction) shareholders meeting drew thousands of loyal investors. They were stunned at the 2025 meeting when Buffett announced he would step down as CEO of the investment giant at year’s end. While he remains board chair and vowed to come to the office every day, he also continues to have a voice in the day-to-day operations. His pre-announced successor and long-time lieutenant, Greg Abel, has assumed the CEO position and likely has a direct say in most, if not all, new investments, public or private.

One thing is for sure: after sitting on a massive pile of cash in the form of short-term Treasury bills, Buffett and Abel have clearly decided to put some of the money to work. In the second quarter, they trimmed some long-term financial holdings and continued repurchasing Berkshire Hathaway stock, buying $4.5 billion worth.

We were intrigued by a major addition to a relatively new airline holding, an initiation in a homebuilder, an increase in a current homebuilder holding, and a big increase in a legacy consumer discretionary retailer. While a contrarian bent at the financial giant isn’t surprising, the continued addition to the housing market is straight out of the Buffett playbook, as the U.S. housing market has remained sluggish and frozen over the past year because of high mortgage rates, soaring home prices, and low inventory.

Here are the four companies that Berkshire Hathaway either initiated in the second quarter or added to current holdings. All are contrarian to some degree and pay dividends, which is always a positive, since the company retains income from stock positions in the portfolio and does not pay shareholders a dividend.

Why Do We Cover Berkshire Hathaway Stocks?

Few investors have the results and reputation Buffett has earned over the past 60 years. Though he has stepped away from the CEO chair, his impact and investment guidelines are likely to remain in place long after he is gone. While investing has evolved since Buffett took control of Berkshire Hathaway in 1965, buying good companies with globally recognized products and services that pay dividends remains a timeless approach.

Delta Air Lines

After earlier this year initiating a position in the legacy airline, which pays a 1% dividend, Berkshire Hathaway increased its holdings by 44% in the second quarter. Delta Air Lines (NYSE:DAL) provides scheduled passenger and cargo air transportation throughout the United States and around the world.

The company has hubs and markets in:

• Amsterdam
• Atlanta
• Bogota
• Boston
• Detroit
• Lima
• London-Heathrow
• Los Angeles
• Mexico City
• Minneapolis-St. Paul
• New York-JFK and LaGuardia
• Paris-Charles de Gaulle
• Salt Lake City
• Santiago (Chile)
• Sao Paulo
• Seattle
• Seoul-Incheon
• Tokyo

The company’s Airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the United States and around the world, and it includes its loyalty program and other ancillary businesses.

Its Refinery segment operates for the benefit of the airline segment by providing it with jet fuel from its own production and through jet fuel obtained through agreements with third parties. The refinery’s production includes jet fuel and non-jet fuel products.

TD Cowen has a Buy rating and a $105 target price.

D.R. Horton

In its ongoing efforts to expand its U.S. housing market holdings, Berkshire Hathaway initiated a very small new position in this homebuilder, which pays a 1.21% dividend. D.R. Horton (NYSE:DHI) is a homebuilding company that primarily acquires and develops land and constructs and sells residential homes, with operations in more than 126 markets across 36 states.

The company’s segments include:

• Homebuilding
• Rental
• Forestar
• Financial Services

The Homebuilding division primarily acquires and develops land and constructs and sells residential homes. The Rental segment consists of single-family and multifamily rental operations. The single-family rental operations construct and lease single-family homes within a community and then generally market each community for a bulk sale of rental homes.

The Forestar segment is a residential lot development company with operations in 64 markets across 23 states, and the Financial Services segment provides mortgage financing and title agency services to homebuyers in many of the company’s homebuilding markets.

Goldman Sachs has a Buy rating and a $190 target price.

Lennar

This is another popular U.S. homebuilder that Berkshire Hathaway added heavily to both share classes in the second quarter, and it pays a solid 2.38% dividend. Lennar (NYSE:LEN) is a homebuilder and an originator of residential and commercial mortgage loans. It provides title insurance and closing services and develops multifamily rental properties through these segments:

• Homebuilding
• Multifamily
• Financial Services
• Lennar Other

The Homebuilding segment primarily includes constructing and selling single-family attached and detached homes, as well as purchasing, developing, and selling residential land directly and through the company’s unconsolidated entities. The Multifamily segment focuses on developing a geographically diversified portfolio of institutional multifamily rental properties in select United States markets.

The Financial Services segment primarily provides mortgage financing, title and closing services for buyers of Lennar homes, and property and casualty insurance. The Lennar Other segment includes fund investments.

Macy’s

This legacy retailer saw Berkshire Hathaway’s stake double in the second quarter, and it pays investors a hefty 3.37% dividend. Macy’s (NYSE:M) is an omnichannel retail company. It operates stores, websites, and mobile applications under three brands: Macy’s, Bloomingdale’s and Bluemercury. Its merchandise includes apparel and accessories (men’s, women’s, and kids’), cosmetics, home furnishings, and other consumer goods.

The company has stores in 43 states, the District of Columbia, Puerto Rico, and Guam, operating under these banners:

• Macy’s
• Macy’s Backstage
• Macy’s small format
• Bloomingdale’s
• Bloomingdale’s The Outlet
• Bloomie’s
• Bluemercury

Bloomingdale’s in Dubai, United Arab Emirates, and Al Zahra, Kuwait, operate under a license agreement with Al Tayer Insignia.

The principal private label brands offered by the company include Alfani, And Now This, Aqua, Bar III, Cerulean 6, Charter Club, Club Room, Epic Threads, first impressions, Giani Bernini, Holiday Lane, Home Design, Hotel Collection, Hudson Park, Ideology, I-N-C, jenni, and JM Collection.

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