by Warren Buffett Berkshire Hathaway Inc. Class A (NYSE: BRK-A) lists several dividend stocks among its holdings, with the highest-yielding companies returning at least 3%. These dividend-paying shares created more than $680 billion in shareholder value, who had an average annual return of 20.1% on BRK’s Class A shares.
As of summer 2022, 30 of the 47 shares currently owned by Berkshire Hathaway pay dividends.
As of this month, the top 10 ranged from 2.9% to 5.27% in annual earnings, and 45 of the 47 were between 3.87% and 101.11% by the exchange’s estimated target price.
Meanwhile, Berkshire Hathaway has also started to weed out stocks that aren’t performing well enough to be considered a worthwhile portfolio investment, including Store Capital Corp. (NYSE: STOR), General Motors Company (NYSE: GM) and Verizon Communications Inc. (NYSE: VZ).
Of the nearly 50 stocks in Buffett’s portfolio, four of his highest-dividend-paying stocks currently offer superior yield.
Apple Inc. (NASDAQ: AAPL)
Dividend yield: 0.55%
Shares held: 894,802,319
Retention amount: $122,337,373,000
Portfolio percentage: 40.76%
While Apple’s dividend yield may only be 0.55%, it still contributes a large portion of Berkshire Hathaway’s income stream simply due to the number of shares it holds.
In the first quarter of 2022, Berkshire Hathaway took advantage of a short-term slump to buy an additional 3.8 million shares, or 0.3%, to add to its already healthy holdings in Apple. Buffett, over the years, has made no secret of his love for Apple, and it remains one of the few tech stocks he has consistently invested in.
In an interview with CNBC, he said, “It’s probably the best deal I know of in the world. And that’s a bigger commitment than we have in any business except insurance and rail.”
The investment paid off well, with a 444% return since the end of Q1 2016 and four times better than the market.
Bank of America Corp. (NYSE: BAC)
Dividend yield: 2.53%
Shares held: 1,010,100,606
Retention amount: $31,444,432,000
Portfolio percentage: 10.48%
Berkshire Hathaway has cut many of its holdings in banking stocks in recent years, but remains steadfast in its investment in Bank of America as its biggest shareholder. Buffett took an active interest in BAC 11 years ago, when he put $5 billion in the bank during the recession and earned a 6% preferred stock yield, which allowed him to buy Bank of America common stock at a considerable discount. He earned $12 billion in profit from this move alone.
Berkshire Hathaway’s stake in BAC is worth $31 billion and represents 10.5% of the company’s total portfolio value. Meanwhile, Berkshire Hathaway is Bank of America’s largest shareholder, with 12.6% of its shares outstanding.
Citigroup Inc. (NYSE: C)
Dividend yield: 3.98%
Shares held: 55,155,797
Retention amount: $2,536,616,000
Portfolio percentage: 0.85%
Citigroup is a global financial services company that operates in more than 100 countries and jurisdictions in primarily two segments—the global consumer banking segment and the institutional client group. The bank’s main operations are cross-border banking needs for multinational corporations, investment banking, and trade and credit card services in the United States. Citigroup issues dividends to shareholders out of excess cash generated by Citigroup.
Kraft Heinz Co. (NASDAQ: KHC)
Dividend yield: 4.17%
Shares held: 325,634,818
Holding value: $12,419,712,000
Portfolio percentage: 4.14%
The Pittsburgh-based company’s logo — its headquarters are now in Chicago — may no longer be on the NFL Steelers’ stadium this year. Still, Kraft Heinz remains the third largest food and beverage manufacturer in North America, behind only PepsiCo Inc. (NASDAQ: PEP) and Nestlé SA ADR (OTCMKTS: NSRGY) and is the fifth greatest player in the world. In addition to its company-branded products, the company’s portfolio includes Oscar Mayer, Velveeta and Philadelphia Cream Cheese.
Outside of North America, the company’s global reach includes a distribution network in Europe and emerging markets that drive about a fifth of its consolidated sales base, as its products are sold in more than 190 countries and territories.
The reason Buffett and others invest in dividend stocks is simple. They consistently outperform stocks that do not pay dividends. Berkshire Hathaway is on track to raise over $6 billion in passive income.
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