What Makes Buffett’s Top Dividend Stocks a Safe Bet?

TipsForTraders | June 13, 2024

Responsive image

Warren Buffett, known as the “Oracle of Omaha,” has maintained a legendary status in the investing world for decades. His annual Berkshire Hathaway shareholders meeting attracts thousands of devoted investors, a testament to his unparalleled reputation and successful track record over the past fifty years.

Buffett’s enduring investment philosophy of buying high-quality companies with globally recognized products and services that pay dividends has withstood the test of time. As the stock market appears significantly overbought and vulnerable to a steep correction, we examined Berkshire Hathaway’s portfolio for companies well-positioned to endure a potential 20% or greater market decline. Here are five top Berkshire holdings that are rated Buy by leading Wall Street firms and offer substantial, reliable dividends.

Why Warren Buffett Stocks?

Our extensive experience of over 15 years in covering Warren Buffett and Berkshire Hathaway at 24/7 Wall St. involves continuous monitoring of their portfolio to identify stocks suited for the current investment climate. Following a significant market surge over the past 18 months, safer investment options are now more attractive.

Bank of America (NYSE: BAC)

Bank of America is a prominent multinational investment bank and financial services company. The firm recently posted strong first-quarter results and offers a robust 2.48% dividend yield. Bank of America’s extensive operations include:

  • Banking and financial services for individual consumers, small and mid-market businesses, institutional investors, corporations, and governments in the U.S. and internationally.
  • Operating 5,100 banking centers, 16,300 ATMs, call centers, and online and mobile banking platforms.

Bank of America’s expansion into new U.S. markets and its global scale ideally position it for accelerated loan growth over the next two years. Unlike smaller competitors, its scale allows for substantial investment increases without significantly impacting returns, thereby driving further market share gains.

Buffett’s Berkshire Hathaway holds 1,032,852,006 shares of Bank of America, comprising 13% of the float and 9.5% of Berkshire’s portfolio.

Chevron (NYSE: CVX)

Chevron is a multinational energy corporation focused on oil and gas. As a safer investment in the energy sector, Chevron offers a generous 4.07% dividend yield. The company operates through two segments:

  • Upstream: Engages in the exploration, development, production, and transportation of crude oil and natural gas. It also handles liquefied natural gas (LNG) processing and transportation.
  • Downstream: Involves refining crude oil, marketing petroleum products and lubricants, manufacturing renewable fuels, and producing commodity petrochemicals and fuel additives.

Chevron’s recent agreement to acquire Hess Corp. for $53 billion underscores its strategic expansion. Under the terms, Hess shareholders will receive 1.025 Chevron shares per Hess share, valuing the transaction’s total enterprise value at $60 billion, including debt.

Berkshire Hathaway owns 122,980,207 shares of Chevron, representing 6.7% of Chevron’s outstanding stock and 5.2% of Berkshire’s portfolio. This holding generates $776,734,888 annually in dividend income.

Coca-Cola (NYSE: KO)

Coca-Cola remains a cornerstone of Buffett’s portfolio, with 400 million shares, amounting to 9.3% of the float and 6.6% of the portfolio. As the world’s largest beverage company, Coca-Cola offers over 500 brands, including:

  • Diet Coke
  • Fanta
  • Sprite
  • Coca-Cola Zero
  • Vitaminwater
  • Powerade
  • Minute Maid
  • Simply

Coca-Cola’s extensive distribution network allows consumers in more than 200 countries to enjoy its products, totaling over 1.9 billion servings daily. Additionally, Coca-Cola owns nearly 20% of Monster Beverage Corp., which continues to deliver impressive results. Investors benefit from a reliable 3.06% dividend yield.

Kraft Heinz (NYSE: KHC)

Kraft Heinz, formed by the merger of H.J. Heinz Company and Kraft Foods Group, is a leading global food company. Berkshire Hathaway’s stake includes 325,634,818 shares, which is 3% of the portfolio and 26.8% of the float. Kraft Heinz generates approximately $25 billion in annual revenues from well-known brands like Kraft, Heinz, Oscar Mayer, and Maxwell House.

As North America’s third-largest food and beverage manufacturer, Kraft Heinz derives 76% of its revenues domestically and 24% internationally. Its extensive brand portfolio includes ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Weight Watchers, Smart Ones, and Velveeta. The company offers a substantial 4.47% dividend yield.

Kroger (NYSE: KR)

Kroger is a major American retail company operating supermarkets and multi-department stores across the U.S. Known for its stability, Kroger offers a 2.03% dividend yield. The company operates various store formats, including:

  • Combination food and drug stores with natural and organic food sections, pharmacies, and general merchandise.
  • Multi-department stores offering apparel, home goods, outdoor living products, electronics, and toys.
  • Marketplace stores with full-service grocery, pharmacy, health and beauty care, and general merchandise.
  • Price impact warehouse stores providing grocery, health and beauty items, meat, dairy, baked goods, and fresh produce.

Kroger’s acquisition of Albertsons Companies Inc. for about $1.9 billion aims to merge two of the nation’s largest grocery chains. However, this merger is subject to antitrust review by the Federal Trade Commission, which could delay or derail the process.

Berkshire Hathaway holds 50 million shares of Kroger, representing nearly 7% of the float.

Key Takeaways

  • Diverse Holdings: Buffett’s portfolio spans various sectors, offering stability and growth potential.
  • Strong Dividends: Each of these companies pays substantial dividends, providing consistent income.
  • Strategic Acquisitions: Recent acquisitions by Chevron and Kroger indicate strategic expansion and market consolidation.


Investing in Warren Buffett’s top dividend stocks offers a blend of stability, reliable income, and potential for growth, making them attractive choices amid market uncertainty. These companies, backed by Buffett’s confidence, are well-positioned to weather potential market downturns, ensuring long-term value for investors.