Warren Buffett’s Berkshire Hathaway owns stakes in six high-yield dividend stocks. The highest yielding stock is Kraft Heinz at 5.23%. Berkshire owns a significant portion of the food company.
Chevron, an oil and gas giant, is Berkshire’s fifth-largest holding with a yield of 4.09%. An unnamed British alcoholic beverage maker yields 3.47% but makes up less than 0.1% of Berkshire’s portfolio. Buffett initiated positions in Ally Financial and Citigroup in 2022.
They yield 3.37% and 3.27% respectively. Coca-Cola, which Buffett has owned the longest, yields 3.1%. Coca-Cola has increased its dividend for 62 consecutive years, earning the title of Dividend Aristocrat.
Chevron has raised its dividend for 37 straight years. Ally Financial and Citigroup have low forward price-to-earnings ratios of 7.9 and 9.4. Kraft Heinz trades at 9.8 times forward earnings. Analysts project strong earnings growth for Ally and Citigroup next year at 48.9% and 22.1%.
Chevron’s earnings are expected to grow 9.2%.
Buffett’s standout high-yield holdings
Chevron stands out as the best of Buffett’s high-yield picks.
Berkshire owns an $18.9 billion stake in the company. Chevron has an exceptional yield, a strong history of dividend growth, and trades below the energy sector average at 13.3 times forward earnings. The regulatory environment should also favor Chevron and the oil and gas industry.
Berkshire Hathaway recently sold about 70% of its stake in Apple, one of its top holdings. Buffett cited high valuations and anticipated capital gains tax increases as reasons for reducing the position. This demonstrates how investors can maintain a long-term mindset while making portfolio adjustments.
Other top Berkshire holdings include American Express, Bank of America, and Chevron. The company also took a 6.7% stake in insurance firm Chubb Limited and owns 44% of healthcare provider DaVita. Chubb and DaVita have delivered strong returns in 2024 and reported record financial results.
DaVita has been buying back shares aggressively and expanding into new international markets. Investing in Berkshire Hathaway itself, Chubb, and DaVita provides an opportunity to benefit from Buffett’s proven strategy. These companies have solid financials and growth plans that make them attractive for long-term investors.
