Warren Buffett’s Berkshire Hathaway has a massive $300.5 billion stock portfolio. A closer look reveals that 39.5% of this portfolio is invested in just two S&P 500 dividend stocks: Apple and American Express. Apple is Berkshire’s biggest bet, accounting for 24.2% of its total stock holdings.
The tech giant has been a strong performer, dominating the smartphone market and seeing success in other categories like software, services, and wearables. Apple pays a small dividend yield of about 0.4%, which would generate $300 million in annual income for Berkshire based on its current holdings of 300 million shares. However, Buffett has recently sold a significant portion of Apple stock, reducing the position by nearly 70% since last year.
American Express is Buffett’s second-largest holding at 15.3% of the portfolio. He has owned the stock since 1995 and has never sold a single share. Berkshire owns 21.5% of American Express.
The company has a unique position in the financial industry, targeting affluent customers, charging annual fees, and acting as its own bank. This model allows American Express to offer strong rewards programs and benefit from multiple revenue streams.
Buffett’s major S&P 500 holdings
The stock yields 0.9% and has a 25-year history of paying dividends. Buffett’s investment in these two companies aligns with his preference for high-quality businesses that generate consistent returns and pay reliable dividends. While he doesn’t always chase the highest yields, he values consistency and long track records.
American Express, in particular, has been an unstoppable performer in Buffett’s portfolio, soaring 58% in 2024 so far. The company benefits from a strong brand, pricing power, and network effects. It has grown revenue and earnings at a steady pace over the past decade.
Although the stock’s valuation has risen, investors who prioritize quality may still find it attractive. Beyond Apple and American Express, Buffett’s portfolio contains several other notable dividend stocks that could appeal to passive income investors. These include well-known names like Coca-Cola, Chevron, Kraft Heinz, Verizon, Bank of America, Procter & Gamble, Johnson & Johnson, and Moody’s.
Each of these companies has a strong, sustainable business model and a history of returning value to shareholders through consistent dividends. By studying Buffett’s dividend stock picks, individual investors can gain insights into building a reliable passive income stream. However, it’s important to conduct personal due diligence and ensure any investment fits with one’s own financial goals and risk tolerance.
