In this article, we discuss the 10 best dividend stocks in Warren Buffett’s most recently revealed 13F portfolio.
Warren Buffett, the CEO and Chairman of Berkshire Hathaway, recently grabbed headlines after his holding company invested over $1 billion in Nubank, a Brazilian digital bank that focuses on cryptocurrency. In the past, Buffett has asserted that cryptocurrencies are an unproductive asset with no unique value. However, his equity portfolio as of the end of 2021 includes multiple companies with direct or indirect exposure to cryptocurrencies. This comes at a time when crypto-related assets grew to $63 billion by the end of 2021, compared with $24 billion at the beginning of the year, as reported by Bloomberg.
Buffett’s value-based investment philosophy has resulted in substantial returns for shareholders over the years. From 1965 to 2020, Berkshire Hathaway has averaged a 20% return per year, which is double the S&P 500’s return of 10.2% during the same period. Moreover, his holding company’s monthly average returns came in at 0.97% from 1999 to 2017, compared with a 0.38% return for the broader market index. As of February 2022, Buffett’s real-time net worth was recorded at nearly $114 billion, up from $102 billion in October 2021, according to Forbes.
During Q4 2021, Berkshire’s 13F portfolio value increased to $331 billion from $293 billion in the previous quarter. The portfolio consists of 44 companies, the top five of which represented 79% of the portfolio’s value. Buffett invests heavily in the technology and finance sectors, with some of Berkshire’s major holdings including Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Verizon Communications Inc. (NYSE:VZ).
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Our Methodology:
In this article, we will focus on the dividend stocks in Warren Buffett’s portfolio. For this list, we considered Berkshire Hathaway’s 13F portfolio as of December 31, 2021.
Warren Buffett’s Latest Portfolio: 10 Dividend Stock Picks
10. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 67
Berkshire Hathaway’s Stake Value: $51,593,000
Dividend Yield as of February 21: 2.18%
The Procter & Gamble Company, an American consumer goods company, currently pays a quarterly dividend of $0.8698 per share, increasing it by 10% in 2021. The stock’s current dividend yield stands at 2.18%. The Procter & Gamble Company has been increasing its dividend for the past 65 years and has grown its dividend at a CAGR of 5% over the past five years.
In Q4 2021, Berkshire Hathaway did not change its position in The Procter & Gamble Company, maintaining a stake worth roughly $51.6 million. The company represented 0.01% of Warren Buffett’s portfolio, far less than other major holdings of Berkshire Hathaway like Apple Inc., Amazon.com, Inc., and Verizon Communications Inc.. In January, Morgan Stanley raised its price target on The Procter & Gamble Company to $177, while maintaining an ‘Overweight’ rating on the shares, naming the stock its favorite in the Household Products category.
At the end of Q4 2021, 67 hedge funds tracked by Insider Monkey held stakes in The Procter & Gamble Company, down from 69 in the previous quarter. The total value of these stakes is over $6.6 billion.
9. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Berkshire Hathaway’s Stake Value: $55,957,000
Dividend Yield as of February 21: 2.60%
Though there was a decline in the number of hedge funds holding stakes in Johnson & Johnson during Q4, analysts remain positive on the company’s recent performance and near-term projections. In January, both Raymond James and Citigroup raised their price targets on the stock to $185 and $195, respectively.
Of the 927 hedge funds tracked by Insider Monkey which filed 13Fs during Q4, 83 of them held stakes in Johnson & Johnson valued at over $7.3 billion. In comparison, 88 hedge funds held positions in the company in the previous quarter, with stakes valued at roughly $6.9 billion. In the fourth quarter, Fundsmith LLP was the largest shareholder among them, owning shares worth over $1.2 billion.
Johnson & Johnson is one of the best dividend stocks in Warren Buffett’s portfolio as the company has been increasing its dividend consistently for the past six decades. In 2021, the company raised its quarterly dividend by 5% to $1.06 per share, which yields 2.60% as of February 21. In Q4 2021, Johnson & Johnson accounted for 0.01% of Berkshire Hathaway’s portfolio, as the hedge fund held shares worth roughly $56 million in the company.
Distillate Capital mentioned Johnson & Johnson in its Q2 2021 investor letter. Here is what the firm had 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.”
8. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
Berkshire Hathaway’s Stake Value: $23,684,001,000
Dividend Yield as of February 21: 2.81%
American multinational beverage giant The Coca-Cola Company (NYSE:KO) experienced positive hedge fund sentiment in Q4, as the number of hedge funds tracked by Insider Monkey holding stakes in the company jumped to 70, up from 61 in the previous quarter. The consolidated value of those stakes was $28.6 billion.
On February 17, The Coca-Cola Company increased its quarterly dividend by 4.8%, marking the company’s 60th straight year of consistent dividend growth. It pays a quarterly dividend of $0.44 per share, with a dividend yield of 2.81% as of February 21. Thanks to The Coca-Cola Company continuing to improve its business model during the pandemic, Evercore ISI analyst Robert Ottenstein lifted the firm’s price target on the stock to $70 and has an ‘Outperform’ rating on the shares.
Berkshire Hathaway is one of the oldest shareholders of The Coca-Cola Company, as it started building its position in 1988. In Q4 2021, the holding company held over $23.6 billion worth of The Coca-Cola Company shares, accounting for 7.15% of Warren Buffett’s portfolio.
7. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 66
Berkshire Hathaway’s Stake Value: $324,387,000
Dividend Yield as of February 21: 3.20%
JPMorgan presented a positive stance on American multinational pharmaceutical company Bristol-Myers Squibb Company (NYSE:BMY) in December, lifting its price target on the stock to $80 and maintaining an ‘Overweight’ rating on the shares.
On the other hand, Berkshire Hathaway significantly reduced its position in Bristol-Myers Squibb Company during Q4, slashing it by 77% to leave it with over $324.3 million worth of shares. The company accounted for 0.09% of Berkshire’s 13F portfolio.
Bristol-Myers Squibb Company is famous among income investors as the company maintains a 15-year track record of consistent dividend growth and hasn’t slashed its dividend in over 30 years. Currently, its quarterly dividend stands at $0.54 per share, which was raised by 10% in December 2021. As of February 21, the stock’s dividend yield is 3.20%.
By the end of Q4 2021, 66 hedge funds tracked by Insider Monkey were bullish on Bristol-Myers Squibb Company, compared with 74 in the previous quarter. The total value of these stakes is over $3.3 billion. Among these hedge funds, Two Sigma Advisors was the company’s largest shareholder in Q4, holding shares worth $412.5 million.
6. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 46
Berkshire Hathaway’s Stake Value: $7,100,894,000
Dividend Yield as of February 21: 3.22%
U.S. Bancorp (NYSE:USB), an American bank holding company, was the eighth-largest holding of Berkshire Hathaway in Q4 2021. The hedge fund held stakes worth over $7.1 billion in the company, which represented 2.14% of Warren Buffett’s 13F portfolio, ranking it alongside Apple Inc., Amazon.com, Inc., and Verizon Communications Inc. as some of the hedge fund’s major holdings.
On June 28, 2021, U.S. Bancorp raised its quarterly dividend by 10% to $0.46 per share. The stock’s dividend yield stands at 3.22% at the time of the writing. Moreover, U.S. Bancorp’s 10-year annualized dividend growth rate is 15%, which makes it one of the best dividend stocks for income investors. This January, Odeon Capital upgraded U.S. Bancorp to ‘Buy’ from ‘Hold’.
Along with Berkshire Hathaway, Millennium Management was also one of the leading shareholders of U.S. Bancorp in Q4, holding shares worth over $138.7 million. Overall, 46 hedge funds tracked by Insider Monkey held shares in the company in Q4, up from 42 in the previous quarter. The total value of these stakes is roughly $8 billion.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 82
Berkshire Hathaway’s Stake Value: $410,744,000
Dividend Yield as of February 21: 3.92%
On October 29, AbbVie Inc. (NYSE:ABBV), an American biopharmaceutical company, hiked its quarterly dividend by 9% to $1.41 per share, which yields 3.92% as of February 21. The company has raised its dividend by over 250% since its inception in 2013.
The number of hedge funds tracked by Insider Monkey holding stakes in AbbVie Inc. inched up to 82 in Q4 from 81 in the previous quarter. These stakes hold a consolidated value of over $3.7 billion.
In February, JPMorgan praised AbbVie Inc.’s Q4 results and its developments in immunology. The firm lifted its price target on the stock to $185, while maintaining an ‘Overweight’ rating on the shares. Warren Buffett started investing in AbbVie Inc. during the third quarter of 2020. In Q4 2021, Berkshire Hathaway held stakes worth over $410.7 million after slashing its position in the company by 79%. AbbVie Inc. accounted for 0.12% of Warren Buffett’s portfolio.
Miller Howard Investments mentioned AbbVie Inc. in its Q3 2021 investor letter. Here is what the firm had to say:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”
4. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 39
Berkshire Hathaway’s Stake Value: $11,690,290,000
Dividend Yield as of February 21: 4.16%
Insider Monkey’s Q4 data shows that the hedge fund interest has spiked in The Kraft Heinz Company (NASDAQ:KHC), the American multinational food giant. As of Q4 2021, 39 hedge funds tracked by Insider Monkey held stakes in the company, up from 33 in the previous quarter. These stakes hold a consolidated value of over $12.2 billion.
Though The Kraft Heinz Company cut its dividend by 36% in 2019, the company has continued to pay dividends to shareholders over the years. Currently, it offers a quarterly dividend of $0.40 per share, which yields 4.16%. Since the beginning of the year, The Kraft Heinz Company delivered a 6.42% return to shareholders as of the close of February 20.
In Q4 2021, The Kraft Heinz Company was the fifth-largest holding of Berkshire Hathaway. Buffett’s holding company held over 325.6 million shares of KHC, valued at roughly $11.7 billion. The company made up 3.53% of Warren Buffett’s 13F portfolio value.
3. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Berkshire Hathaway’s Stake Value: $4,488,055,000
Dividend Yield as of February 21: 4.26%
Chevron Corporation (NYSE:CVX) is an American multinational energy company that specializes in the exploration for, and production of, oil and natural gas. In Q4 2021, Berkshire Hathaway increased its position in the company by 34%, which accounted for 1.35% of Warren Buffett’s portfolio. The holding company held shares worth roughly $4.5 billion in Chevron Corporation.
On January 26, Chevron Corporation raised its dividend by 6% to $1.42 per share. The stock’s current dividend yield stands at 4.26%, as recorded on February 21. Chevron Corporation has been increasing its annual dividend consecutively for the past 35 years. On February 9, Barclays lifted its price target on Chevron Corporation to $148, with an ‘Overweight’ rating on the shares.
At the end of Q4 2021, 53 hedge funds tracked by Insider Monkey reported owning stakes in Chevron Corporation, valued at over $6.5 billion. In comparison, 51 hedge funds held positions in the company in the previous quarter, with stakes valued at over $4.44 billion. Fisher Asset Management was one of the company’s leading shareholders in Q4, owning stakes worth $774.2 million.
Goehring & Rozencwajg Associates mentioned Chevron Corporation in its Q3 2021 investor letter. Here is what the firm had to say:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
2. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 63
Berkshire Hathaway’s Stake Value: $8,252,525,000
Dividend Yield as of February 21: 4.76%
This January, Deutsche Bank raised its price target on Verizon Communications Inc., an American telecommunications company, to $59, and expected about 8% upside in the stock in 2022.
In 2021, Verizon Communications Inc. raised its quarterly dividend by 2% at $0.64 per share. The stock’s dividend yield stands at 4.76%. Verizon Communications Inc. maintains a 14-year track record of consistent dividend growth.
In Q4 2021, Berkshire Hathaway did not change its position in the company, holding shares worth over $8.2 billion. Verizon Communications Inc. represented 2.49% of Warren Buffett’s portfolio. As per Insider Monkey’s Q4 data, 63 hedge funds held stakes in Verizon Communications Inc., up from 57 in the previous quarter. These stakes are valued at $10.8 billion.
Weitz Investment Management mentioned Verizon Communications Inc. in its Q4 2021 investor letter. Here is what the firm had to say:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
1. STORE Capital Corporation (NYSE:STOR)
Number of Hedge Fund Holders: 17
Berkshire Hathaway’s Stake Value: $839,882,000
Dividend Yield as of February 21: 5.05%
An American real estate investment trust, STORE Capital Corporation (NYSE:STOR) increased its quarterly dividend by 7% in 2021 to $0.385 per share. The stock’s dividend yield stands at 5.05% as of February 21. This January, Mizuho set a $33 price target on STORE Capital Corporation, while keeping a ‘Neutral’ rating on the shares.
As of the end of Q4 2021, 17 hedge funds in Insider Monkey’s database reported owning stakes in STORE Capital Corporation, up from 16 in the previous quarter. Those stakes held a value of over $906.3 million. Berkshire Hathaway accounted for most of that, holding shares worth roughly $840 million in STORE Capital Corporation at the end of 2021, which represented 0.25% of Warren Buffett’s portfolio.
Besides Berkshire Hathaway, Citadel Investment Group was one of the largest shareholders of the company in Q4, holding a stake worth over $41.6 million.
You can also take a look at 10 Healthy and Sustainable Food Stocks to Buy and 10 Best Bargain Stocks Right Now
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This article is originally published at Insider Monkey.
