Warren Buffett’s Berkshire Hathaway has built an impressive stock portfolio. Two S&P 500 dividend stocks make up 42.4% of the portfolio. Apple is in the largest position at 29.4%.
Berkshire owns 400 million shares of the tech giant. Apple’s 0.4% dividend yield may seem low, but it translates to $400 million in annual income for Berkshire. Apple’s strong brand and loyal customers have kept its iPhone business highly profitable.
Its software, services, wearables, and computers also generate substantial cash. American Express is Buffett’s second-largest holding at 13%. The company’s closed-loop credit card system allows it to charge annual fees and maintain high profitability.
As a bank, it also earns interest income. Despite higher loss provisions, net interest income rose 20%, and net income jumped 39% in Q2. Younger, affluent customers are attracted to its rewards.
Revenue is up nearly 50% since 2021. American Express has paid a dividend since 1989, currently yielding 1%. The stock has outperformed the S&P 500 this year.
Buffett noted that American Express’s annual dividends have grown from $41 million in 1995 to $302 million in 2022.
Buffett’s top stock holdings explained
Apple and American Express are significant holdings for Berkshire Hathaway.
Their strong dividends and business models contribute to the firm’s ongoing success. If I could only buy one Warren Buffett stock in October, it would be Lennar. The homebuilder is well-positioned to benefit from lower interest rates, the housing shortage, and potential federal policies.
Lower rates should boost home buying and Lennar’s profits. The U.S. has a chronic undersupply of homes that will require increased production. Lennar’s valuation is attractive, with a P/E of just 12.4.
Policies from both political parties aimed at the housing shortage could further help Lennar.
Financial assistance for first-time buyers, tax credits for builders, and making federal land available are all possibilities. Other Buffett stocks like Apple, Amazon, and Occidental Petroleum are also solid picks. However, given the current environment and growth prospects, Lennar stands out as the top choice.
Two other unstoppable Buffett stocks are screaming buys for the rest of 2024 and beyond. Berkshire’s CEO has delivered incredible returns by investing in companies with competitive advantages, strong management, and dividends. Stock A and Stock B exhibit these qualities.
They are profitable, time-tested businesses with sustained competitive positions. Both are poised to deliver robust returns for years to come. Investors looking to emulate some of Buffett’s success should focus on companies with similar characteristics.
