In this article, we discuss the 11 best dividend stocks to buy according to Warren Buffett.
Warren Buffett is an American businessman, investor, and CEO of Berkshire Hathaway. He is known as the most successful investor of all time. Buffett is the sixth richest man in the world as his net worth stands at $103.1 billion, as of October 2021.
Some of the most notable dividend stocks in his portfolio include Chevron Corporation (NYSE:CVX), Johnson & Johnson, The Coca-Cola Company (NYSE:KO), Bristol-Myers Squibb Company (NYSE:BMY), and AbbVie Inc. (NYSE:ABBV).
Our Methodology:
Let’s analyze our list of the best dividend stocks to buy according to Warren Buffett. We chose stocks with the highest dividend yields in Berkshire Hathaway’s 13F portfolio as of Q2 2021.
Warren Buffett
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11 Best Dividend Stocks To Buy According To Warren Buffett
11. Johnson & Johnson (NYSE:JNJ)
Berkshire Hathaway’s Stake Value: $53,886,000
Percent of Berkshire Hathaway’s 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 88
Dividend Yield: 2.63%
Johnson & Johnson ranks eleventh on our list of the best dividend stocks to buy according to Warren Buffett. It is a holding company that is involved in the research and development of pharmaceutical products. Along with this, the company also deals in consumer retail and medical devices.
In Q2 2021, Berkshire Hathaway did not make any changes to its stake in Johnson & Johnson and owns 327,100 shares in the company, worth $53.8 million.
Of the 873 hedge funds tracked by Insider Monkey, 88 hedge funds have positions in Johnson & Johnson in Q2 2021, up from 81 in the previous quarter. These stakes are valued at over $7 billion. Fundsmith LLP is the company’s leading shareholder, with shares worth $1.1 billion.
Like Chevron Corporation, The Coca-Cola Company, Bristol-Myers Squibb Company, and AbbVie Inc., Johnson & Johnson is one of the most notable stocks in 2021.
Distillate Capital mentioned Johnson & Johnson in its Q2 2021 investor letter. Here is what the firm has to say:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
10. U.S. Bancorp (NYSE:USB)
Berkshire Hathaway’s Stake Value: $7,342,802,000
Percent of Berkshire Hathaway’s 13F Portfolio: 2.5%
Number of Hedge Fund Holders: 41
Dividend Yield: 2.97%
U.S. Bancorp (NYSE:USB) is an American bank holding company and is the parent company of the U.S. Bank National Association. The company ranks tenth on our list of the best dividend stocks to buy according to Warren Buffett.
As of Q2 2021, Berkshire Hathaway owns approximately 129 million shares in U.S. Bancorp, worth $7.34 billion. The company accounts for 2.5% of the hedge fund’s 13F portfolio. Recently, U.S. Bancorp launched its cryptocurrency custody services to its global institutional investment managers with private funds in the U.S. The company has increased its dividend by 44.8% in the past three years.
9. The Coca-Cola Company (NYSE:KO)
Berkshire Hathaway’s Stake Value: $21,644,001,000
Percent of Berkshire Hathaway’s 13F Portfolio: 7.38%
Number of Hedge Fund Holders: 62
Dividend Yield: 3.11%
In Q2 2021, Berkshire Hathaway did not make any changes to its stake in The Coca-Cola Company and owns 400 million shares in the company, valued at over $21.6 billion. The company constitutes 7.38% of the hedge fund’s 13F portfolio.
Of the 873 hedge funds tracked by Insider Monkey, 62 hedge funds have positions in The Coca-Cola Company in Q2 2021, up from 61 in the previous quarter. The total value of these stakes is $24.9 billion.
Like Chevron Corporation, Bristol-Myers Squibb Company, AbbVie Inc., and Johnson & Johnson, The Coca-Cola Company is one of the most notable dividend stocks in Buffett’s portfolio as of Q2.
8. Merck & Co., Inc. (NYSE:MRK)
Berkshire Hathaway’s Stake Value: $712,155,000
Percent of Berkshire Hathaway’s 13F Portfolio: 0.24%
Number of Hedge Fund Holders: 79
Dividend Yield: 3.19%
Merck & Co., Inc. is an American pharmaceutical company that deals in biologics, medicines, vaccines, and other consumer products. The company stands eighth on our list of the best dividend stocks to buy according to Warren Buffett.
On October 1, Citigroup lifted its price target on Merck & Co., Inc. to $105, while keeping a ‘Buy’ rating on the shares. Since the beginning of the year, the stock delivered a 4.85% return to shareholders, while its 12-month returns came in at 5.48%.
As of Q2 2021, 79 hedge funds tracked by Insider Monkey have positions in Merck & Co., Inc., the same as in the last quarter. The total value of these stakes is $5.2 billion. Kahn Brothers is the company’s leading shareholder, with shares worth $55.7 billion.
Like Chevron Corporation, Bristol-Myers Squibb Company, AbbVie Inc., Johnson & Johnson, and The Coca-Cola Company, Merck & Co., Inc. is also gaining investors’ attention as a dividend stock.
Artisan Partners mentioned Merck & Co., Inc. in its Q1 2021 investor letter. Here is what the firm has to say:
“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”
7. Bristol-Myers Squibb Company (NYSE:BMY)
Berkshire Hathaway’s Stake Value: $1,756,983,000
Percent of Berkshire Hathaway’s 13F Portfolio: 0.59%
Number of Hedge Fund Holders: 73
Dividend Yield: 3.35%
Bristol-Myers Squibb Company stands seventh on our list of the best dividend stocks to buy according to Warren Buffet. It is an American multinational pharmaceutical company that specializes in the development and marketing of medicines for patients with serious diseases.
As of Q2 2021, Berkshire Hathaway owns 26.2 million shares in Bristol-Myers Squibb Company, valued at $1.75 billion. The company represents 0.59% of the hedge fund’s 13F portfolio. Recently, Morgan Stanley lifted its price target on Bristol-Myers Squibb Company to $71, while keeping an ‘Equal Weight’ rating on the shares. On September 9, the company’s board announced its quarterly dividend of $0.49 per share, offering an annualized yield of 3.35%.
Like Chevron Corporation, AbbVie Inc., Johnson & Johnson, and The Coca-Cola Company, analysts and investors are also paying attention to Bristol-Myers Squibb Company in 2021.
6. Organon & Co. (NYSE:OGN)
Berkshire Hathaway’s Stake Value: $46,918,000
Percent of Berkshire Hathaway’s 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 44
Dividend Yield: 3.43%
Organon & Co. is a global pharmaceutical company that develops and delivers innovative health solutions, medicines, and related products across a range of therapeutic areas. The company stands sixth on our list of the best dividend stocks to buy according to Warren Buffett.
Organon & Co. is one of the newest acquisitions of Berkshire Hathaway, as the fund started building its position in the company in Q2 2021. The fund owns over 1.5 million shares in the company, valued at $46.9 million.
Of the 873 hedge funds tracked by Insider Monkey, 44 hedge funds have positions in Organon & Co. in Q2, valued at $427.8 million. There were no hedge fund positions in the company in the previous quarter.
5. The Kraft Heinz Company (NASDAQ:KHC)
Berkshire Hathaway’s Stake Value: $13,279,388,000
Percent of Berkshire Hathaway’s 13F Portfolio: 4.53%
Number of Hedge Fund Holders: 33
Dividend Yield: 4.35%
The Kraft Heinz Company (NASDAQ:KHC) is an American food company that holds over 200 iconic brands. The company stands fifth on our list of the best dividend stocks to buy according to Warren Buffett.
In Q2 2021, Berkshire Hathaway did not make changes to its position in The Kraft Heinz Company. The hedge fund holds over 325.6 million shares in the company, with a total value of over $13.2 billion. The company accounts for 4.53% of the fund’s 13F portfolio. Recently, The Kraft Heinz Company announced its acquisition of the Brazilian condiments company, Hemmer, through which the company would promote its taste elevation strategy. On August 4, The Kraft Heinz Company announced a quarterly dividend of $0.40 per share, yielding 4.53%. The company has been growing its dividends for the past two years.
This September, Morgan Stanley assumed coverage of The Kraft Heinz Company with an ‘Equal Weight’ rating and a $37 price target. Since the beginning of the year, the stock delivered a 7.45% return to shareholders, while its 12-month returns came in at 18.23%.
As of Q2 2021, 33 hedge funds tracked by Insider Monkey have positions in The Kraft Heinz Company, the same as in the previous quarter. These stakes are valued at $13.5 billion.
2. STORE Capital Corporation (NYSE:STOR)
Berkshire Hathaway’s Stake Value: $842,568,000
Percent of Berkshire Hathaway’s 13F Portfolio: 0.28%
Number of Hedge Fund Holders: 13
Dividend Yield: 4.65%
STORE Capital Corporation (NYSE:STOR) stands fourth on our list of the best dividend stocks to buy according to Warren Buffett. It is an American real estate investment trust that is engaged in the management and acquisition of single-tenant real estate properties.
As of Q2 2021, Berkshire Hathaway holds over 24.4 million shares in STORE Capital Corporation, valued at $842.5 million. The company represents 0.28% of the hedge fund’s 13F portfolio. Recently, S&P Global raised its outlook on STORE Capital Corporation to positive due to the company’s outstanding portfolio performance. On September 13, the company’s board increased its quarterly dividend by 7% to $0.385 per share, offering an annualized yield of 4.65%. STORE Capital Corporation has increased its dividend by 18.33% in the past three years. This August, Mizuho lifted its price target on STORE Capital Corporation to $37, while keeping a ‘Neutral’ rating on the shares. The stock gained 17.76% in the past year.
As of Q2 2021, 13 hedge funds tracked by Insider Monkey have positions in STORE Capital Corporation, the same as in the previous quarter. These stakes are valued at $899 million.
3. Verizon Communications Inc. (NYSE:VZ)
Berkshire Hathaway’s Stake Value: $8,898,941,000
Percent of Berkshire Hathaway’s 13F Portfolio: 3.03%
Number of Hedge Fund Holders: 63
Dividend Yield: 4.71%
Verizon Communications Inc. (NYSE:VZ) is an American multinational telecommunications company that provides information and entertainment products and services to its consumers around the world. The company stands third on our list of the best dividend stocks to buy according to Warren Buffett.
In Q2 2021, Berkshire Hathaway did not change its position in Verizon Communications Inc. and holds roughly 159 million shares in the company. These stakes are valued at over $8.8 billion and the company currently accounts for 3.03% of the hedge fund’s 13F portfolio. On September 2, Verizon Communications Inc. increased its dividend by 2% at $0.64 per share, yielding 4.71%. In September, Raymond James reiterated its ‘Buy’ rating on Verizon Communications Inc., with a $64 price target. In Q2 2021, Verizon Communications Inc. posted an EPS of $1.37, beating the estimates by $0.07.
As of Q2 2021, 63 hedge funds tracked by Insider Monkey have positions in Verizon Communications Inc., compared with 69 in the previous quarter. These stakes are valued at over $10.9 billion.
2. AbbVie Inc. (NYSE:ABBV)
Berkshire Hathaway’s Stake Value: $2,312,258,000
Percent of Berkshire Hathaway’s 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 82
Dividend Yield: 4.68%
As of Q2 2021, Berkshire Hathaway owns 20.5 million shares in AbbVie Inc., valued at $2.3 billion. The company accounts for 0.78% of the hedge fund’s 13F portfolio. In September, JPMorgan lifted its price target on AbbVie Inc. to $140, while keeping an ‘Overweight’ rating on the shares. The company pays an annual dividend of $5.20 per share, yielding 4.68%. AbbVie Inc. has been growing its dividend for the past 49 years and its 3-year dividend growth stood at 84.3%. In Q2 2021, AbbVie Inc. posted an EPS of $3.11, beating the estimates by $0.08. In the past year, the stock returned 26.77%.
The number of hedge funds having stakes in the company grew to 82 in Q2, compared with 72 in the previous quarter. The total value of these stakes is $5.35 billion.
1. Chevron Corporation (NYSE:CVX)
Berkshire Hathaway’s Stake Value: $2,421,999,000
Percent of Berkshire Hathaway’s 13F Portfolio: 0.82%
Number of Hedge Fund Holders: 50
Dividend Yield: 5.1%
Chevron Corporation tops our list of the best dividend stocks to buy according to Warren Buffett. It is an American multinational energy company and is the second-largest oil company in the U.S.
As of Q2 2021, Berkshire Hathaway owns over 23 million shares in Chevron Corporation, valued at $2.42 billion. The company represents 0.82% of the hedge fund’s 13F portfolio. Recently, Chevron Corporation has announced that it plans to increase its total capital investment in lower-carbon energy businesses to $10 billion, by 2028. Along with this, the company also plans to invest $2 billion to reduce the carbon intensity of its operations.
Chevron Corporation pays an annual dividend of $5.36 per share, yielding 5.1%.
ClearBridge Investments mentioned Chevron Corporation in its Q1 2021 investor letter. Here is what the firm has to say:
“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names, (including) Chevron. We are positive on the company’s strong balance sheets, competitive positions and exposure to an economic recovery.”
You can also take a look at 10 Stocks Warren Buffett is Selling and 10 Best Stocks to Buy According to Warren Buffett
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This article is originally published at Insider Monkey.
