If any investor has stood the test of time, it’s Warren Buffett, and with good reason. For years the “Oracle of Omaha” has had a rock star-like presence in the investing world, and his annual Berkshire Hathaway shareholders meeting draws thousands of loyal fans. Known for his long buy-and-hold strategies, and his massive portfolio of public and private holdings, he remains one of the preeminent investors on Earth.

Long-time investors and Buffett mavens are familiar with his quote “His favorite holding for an S&P 500 stock is forever”, so it’s not surprising to report that for all of the success and stature Berkshire Hathaway has in the investment world, 5 top companies make up almost 75% of the fund’s total holdings. While much more concentrated than most portfolio managers would ever consider, the strategy has worked for Berkshire Hathaway investors for years, and likely will in the future.

3 stocks Warren Buffett has in the Berkshire Hathaway portfolio are members of the exclusive Dividend Aristocrats club. The 67 companies that made the cut for the 2023 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years or longer. But the requirements go even further, with the following attributes also mandatory for membership on the dividend aristocrats list:

• Companies must be worth at least $3 billion at the time of each quarterly rebalancing.
• Average daily volume of at least $5 million in transactions for every trailing three-month period at every quarterly
• Be a member of the S&P 500

Here are the three Dividend Aristocrats Warren Buffett owns in Berkshire Hathaway.

Chevron

This integrated giant is a safer way for investors looking to get positioned in the energy sector and pays a rich 4.14% dividend. Chevron Corporation (NYSE: CVX) through its subsidiaries, engages in integrated energy and chemicals operations worldwide. The company operates in two segments, Upstream and Downstream.

• The 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; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as operates 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 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.

Chevron recently announced a massive $53 billion purchase of Hess Corporation (NYSE: HES) for the second huge energy sector acquisition deal to be announced this fall. This comes after Exxon Mobil Corporation (NYSE: XOM) announced a $59 billion merger with Pioneer Natural Resources Company (NYSE: PXD)

This is one of only two energy holdings in Berkshire Hathaway which holds 123 million shares of the integrated giant.

The Coca-Cola Company

This company has remained a top Warren Buffet holding for years as he owns a massive 400 million shares and shareholders are paid a very solid 3.26% dividend. The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands. Led by Coca-Cola, one of the world’s most valuable and recognizable brands, 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, they are the No. 1 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 the company’s beverages at a rate of more than 1.9 billion servings a day. It’s also important to remember that the Coca-Cola Company also owns 16.7% of Monster Beverage (NASDAQ: MNST) which continues to deliver big numbers.

Johnson & Johnson

With a diverse product base and a very popular brand, this is among the most conservative big health care plays and is the only big pharma stock in Berkshire Hathaway which owns 327,000 shares that pay a solid 3.21% dividend. Johnson & Johnson (NYSE: JNJ) researches develops, manufactures, and sells various products in the healthcare field worldwide.

The healthcare giant operates in three segments: Consumer Health, Pharmaceutical, and Medical Devices.

• The 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, DR. CI: LABO, 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.
• The 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, ear, nose, and throat procedures; and disposable contact lenses and ophthalmic products related to cataract and laser refractive surgery under the ACUVUE brand.

Three Dividend Aristocrats who have been longtime members of the Berkshire Hathaway portfolio generate steady and dependable dividends. Last year alone Buffett collected $704 million in dividends from just Coke, so you can bet that it will remain in the portfolio for years to come, as will the others.

 

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