The stock market bounced back some on Wednesday, after the worst day since June of 2020, when the COVID-19 pandemic was in full effect. Yet, there are some very ominous clouds on the investing horizon as we approach fall. The only metric that kept the inflation numbers from being worse than they were is that gasoline prices have dropped dramatically over the summer. Some of the top firms and investors on Wall Street still see some imminent danger in the coming months.

Bond guru Jeff Gundlach said recently he thinks the stock market could drop 20% to 25%, a fall that would leave the S&P 500 at around the 3,000 level (it is currently 3,946). High-profile investor Scott Minerd said last week that he expects stocks to fall another 20% by mid-October. Michael Burry of “Big Short” fame is also quite negative and has sold all the equity positions in his hedge fund. Morgan Stanley’s Mike Wilson noted that the market could have 17% to 27% downside risk.

One investor who always is long term with his stock positions is Warren Buffett. One reason for Berkshire Hathaway’s stunning success over the years is that Buffett and his colleague Charlie Munger always have tried to stay with stock ideas they understand. That has proven to be a winning hand. In addition, many of the companies in their portfolio pay solid and reliable dividends.

Longtime investors and Buffett mavens are familiar with his quote that his “favorite holding for an S&P 500 stock is forever.” So, it is not really surprising to report that for all of the success and stature of Berkshire Hathaway, most of its holdings are reasonably safe and many pay dividends. We screened the portfolio looking for safe ideas that make sense now in these volatile times. Seven top stocks stood out, as they are rated Buy and pay very dependable dividends.

With that noted, it is important to remember that no single analyst report should be used as the sole basis for any buying or selling decision.

Chevron

This integrated giant is a safer way for investors looking to get positioned in the energy sector, and shares have backed up nicely. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide.

Chevron’s Upstream segment is involved in the exploration, development, production and transportation of crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas (LNG); transportation of crude oil through pipelines; and transportation, storage and marketing of natural gas, as well as operating a gas-to-liquids plant.

The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products and lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It is also involved in cash management and debt financing activities, insurance operations, real estate activities and technology businesses.

The company sports a 3.56% dividend. Credit Suisse has a $202 target price on Chevron stock, while the consensus target is $181.52. The shares closed on Wednesday at $163.27.

This remains a top Buffet holding, as he owns 400 million shares. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It has an incredibly strong worldwide brand, with 40% overseas sales.

The company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.

Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.

Coca-Cola stock investors receive a 2.91% dividend. HSBC’s target price is $76, and the consensus target is $69.80. Wednesday’s close was at $60.79.

Diageo

One of the largest producers of alcoholic beverages in the world, Diageo PLC (NYSE: DEO) produces, markets and sells alcoholic beverages worldwide, including scotch whiskey, gin, vodka, rum, beer, Irish cream liqueurs, wine, Raki, tequila, Canadian and American whiskey, Cachaça and brandy, as well as adult beverages and ready to drink products. The company’s premium brands include Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray and Guinness.

Its reserve brands include Johnnie Walker Blue Label, Johnnie Walker Green Label, Johnnie Walker Gold Label 18-year-old, Johnnie Walker Gold Label Reserve, Johnnie Walker Platinum Label 18-year-old, John Walker & Sons Collection, Johnnie Walker The Gold Route, Johnnie Walker The Royal Route and other Johnnie Walker super-premium brands, as well as The Singleton, Cardhu, Talisker, Lagavulin and other malt brands.

Shareholders receive a 2.17% dividend. BofA Securities has set a $206 price target. The consensus target for Diageo stock is higher at $213.85, but the closing price on Wednesday was $176.07 a share.

Johnson & Johnson

With a diverse product base and a very popular and solid brand, this is among the most conservative big pharmaceutical plays, and vaccine demand could spike again. Johnson & Johnson (NYSE: JNJ) researches, develops, manufactures and sells various products in the health care field worldwide.

Its Consumer Health segment offers baby care products under the Johnson’s and Aveeno Baby brands; oral care products under the Listerine brand; skin health/beauty products under the Aveeno, Clean & Clear, Neutrogena and OGX brands; acetaminophen products under the Tylenol brand; cold, flu and allergy products under the Sudafed brand; allergy products under the Benadryl and Zyrtec brands; ibuprofen products under the Motrin IB brand; smoking cessation products under the Nicorette brand; and acid reflux products under the Pepcid brand.
This segment also provides women’s health products, such as sanitary pads and tampons under the Stayfree, Carefree, and o.b. brands; wound care products comprising adhesive bandages under the Band-Aid brand; and first aid products under the Neosporin brand.

Johnson & Johnson’s Pharmaceutical segment offers products in various therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension and cardiovascular and metabolic diseases.

The Medical Devices segment provides electrophysiology products to treat cardiovascular diseases; neurovascular care products to treat hemorrhagic and ischemic stroke; orthopedics products in support of hips, knees, trauma, spine, sports and other; advanced and general surgery solutions that focus on breast aesthetics and ear, nose and throat procedures; and disposable contact lenses and ophthalmic products related to cataract and laser refractive surgery under the Acuvue brand.

The dividend yield is 2.80%. The $201 Citigroup price target is well above the $187.52 consensus target. Johnson & Johnson stock closed at $166.66 on Wednesday.

Kroger

This grocery chain giant is always a solid idea when the going gets rough as people tend to go out less. Kroger Co. (NYSE: KR) operates as a retailer in the United States. It operates combination food and drug stores, multi-department stores, marketplace stores and price impact warehouses.

Its food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood and organic produce. Its multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products and toys.

The company’s marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys. The price impact warehouse stores provide grocery and health and beauty care items, as well as meat, dairy, baked goods and fresh produce items.

The company also manufactures and processes food products for sale in its supermarkets and online, and it sells fuel through 1,613 fuel centers. As of January 29, 2022, the company operated 2,726 supermarkets under various banner names in 35 states and the District of Columbia.

Kroger stock comes with a 2.11% dividend. The $75 target price at BofA Securities compares with a $54.88 consensus target and the most recent close at $48.94.

Mondelez

This consumer sector giant makes good sense for conservative investors. Mondelez International Inc. (NASDAQ: MDLZ) manufactures and markets snack food and beverage products worldwide. It offers biscuits, including cookies, crackers and salted snacks; chocolates, and gums and candies; powdered beverages and coffee; and cheese and grocery products.
Its primary brand portfolio includes LU, Nabisco and Oreo biscuits; Cadbury, Cadbury Dairy Milk and Milka chocolates; Trident gum; Jacobs Kaffee; and Tang powdered beverages.

Mondelez sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and other retail food outlets through direct store delivery, company-owned and satellite warehouses, distribution centers and other facilities, as well as through independent sales offices and agents.

Shareholders receive a 2.57% dividend. The Mondelez International price target at Bernstein is $79. The consensus target is lower at $73.16, and shares closed on Wednesday at $60.24.

Procter & Gamble

The company offers a very solid dividend as well as a host of recognizable products. Procter & Gamble Co. (NYSE: PG) is one of the world’s largest consumer products companies and one of the oldest in the Fortune 500. Its many brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn.

The company sells its products through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, baby stores, specialty beauty stores, high-frequency stores and pharmacies. The company has been very innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends.

Investors receive a 2.59% dividend. Wells Fargo’s $160 price objective is higher than the $156.08 consensus target. Wednesday’s closing share price for Procter & Gamble stock was $138.51.

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It should be noted that investors like Burry and Jeremy Grantham (who also sees massive market downside) are perpetually bearish, but the saying “don’t fight the Federal Reserve” works in both directions. Interest rates are headed higher, with another big increase coming next week. All these Berkshire Hathaway holdings likely would trade lower in a big market move down, but they should hold their ground better than most.

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