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Warren Buffett Sells Bank of America - 6 Dividend Stocks Are Now 78.3% of the Portfolio
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- For the first time in almost five years, Warren Buffett trims his Bank of America stake
- Large cap financials have posted mixed second-quarter results
- Grab this free report today Access 2 legendary, high-yield dividend stocks Wall Street loves
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 who are investors.
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, that 6 top companies make up almost 80% of the funds’ total holdings.
Despite his buy-and-hold stance, Mr. Buffett recently parted ways with 33.9 million shares of Bank of America, Inc. (NYSE: BAC) stock, which totaled almost $1.5 billion last week at an average selling price of $43.56. This is the first time since the fourth quarter of 2019 that Berkshire Hathaway has sold stock in the ubiquitous money-center banking giant. Despite the share reduction, Bank of America remains the second largest Warren Buffett holding with a stunning 998,961.079 shares that make up 10.4% of the portfolio.
Along with Bank of America, five additional companies comprise 78.3% of Berkshire Hathaway. While much more concentrated than most portfolios with publicly traded stocks, it’s important to remember that Berkshire Hathaway has sizable stakes in many well-known private companies, such as Acme Brick, Benjamin Moore, Dairy Queen, Duracell, GEICO, Lubrizol, and many more.
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Why are we covering this?
With a 15-year track record of covering Mr. Buffett and Berkshire Hathaway at 24/7 Wall St., we like to keep our readers updated on the top news from the financial powerhouse. It should be noted that Berkshire Hathaway’s overall performance has lagged the S&P 500 this year.
American Express
This stock has been strong and absolutely blew out second-quarter results. It pays a 1.16% dividend. American Express Company (NYSE: AXP) provides charge and credit payment card products and travel-related services worldwide.
The company operates through three segments:
- Global Consumer Services Group
- Global Commercial Services
- Global Merchant and Network Services.
Its products and services include:
- Payment and financing products
- Network services
- Accounts payable expense management products and services
- Travel and lifestyle services.
The company’s products and services also comprise:
- Merchant acquisition and processing
- Servicing and settlement
- Point-of-sale marketing
- Information products and services for merchants
- Fraud prevention services and the design and operation of customer loyalty programs
Berkshire Hathaway owns 151,610,700 shares, 21.3 % of American Express’s float, and 9.1% of the portfolio.
Apple
It’s almost hard to comprehend that the legacy technology giant, with 789,368,450 shares, makes up a stunning 43.8% of the Berkshire Hathaway portfolio, which holds 5.1% of Apple’s stock even after selling millions of shares over the last year. Apple Inc. (NASDAQ: AAPL) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.
The company offers:
- The iPhone, a line of smartphones
- Mac, a line of personal computers
- iPad, a line of multi-purpose tablets
- Wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod
Apple also provides AppleCare support and cloud services and operates various platforms, including the App Store, which allows customers to discover and download applications and digital content such as books, music, videos, games, and podcasts.
In addition, the company offers various services, such as:
- Apple Arcade, a game subscription service
- Apple Fitness+, a personalized fitness service
- Apple Music, which gives users a curated listening experience with on-demand radio stations
- Apple News+, a subscription news and magazine service
- Apple TV+, which offers exclusive original content
- Apple Card, a co-branded credit card
- Apple Pay, a cashless payment service
Apple Investors are paid a modest 0.45% dividend.
Chevron
This integrated giant is safer for investors looking to get positioned in the energy sector, paying a rich 4.10% dividend, and Buffett added 16 million shares in the first quarter. Chevron Corporation (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries.
The company operates in two segments:
- Upstream
- Downstream
The Upstream segment is involved in the following:
- 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
- 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 product
- Marketing crude oil, refined products, and lubricants
- Manufacturing and marketing renewable fuels
- Transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car
- Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives
Chevron announced last fall that it has entered into a definitive agreement with Hess Corporation (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion.
Three lawsuits have been filed against Hess, charging inadequate disclosure over the sale, and Chevron has said arbitration over Hess’ Guyana assets could delay the closing timeline until October 2025. However, most Wall Street analysts feel the deal will ultimately be completed, and Chevron will emerge even more powerful in the energy sector.
Berkshire Hathaway owns 6.7% of Chevron’s outstanding stock, 122,980,207 shares, and the energy giant makes up 4.8% of the portfolio.
The Coca-Cola Company
This company remains a top Warren Buffet holding as he owns a massive 400 million shares, 9.3% of the float and 6.4% of the portfolio. 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
- Del Valle
Globally, they are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juice drinks.
Through the world’s most extensive 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 company owns almost 20% % of Monster Beverage (NASDAQ: MNST), which continues to deliver big numbers.
Investors are paid a very dependable 2.97% dividend.
Occidental Petroleum
Over the last two years, Berkshire Hathaway has been buying the shares in a big way, which now amounts to a massive 255,281,524 shares that pay a decent 1.39% dividend. Occidental Petroleum (NYSE: OXY), together with its subsidiaries, is engaged in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, Africa, and Latin America.
It operates through three segments:
- Oil and Gas
- Chemical
- Midstream and Marketing
The company’s Oil and Gas segment explores, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas.
Its Chemical segment manufactures and markets basic chemicals, including:
- Chlorine
- Caustic soda
- Chlorinated organics
- Potassium chemicals
- Ethylene dichloride
- Chlorinated isocyanurates
- Sodium silicates, and calcium chloride
- Vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene
The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment trades around its assets, including transportation and storage capacity, and invests in entities.
Warren Buffett has loaded the boat on Occidental Petroleum, which pays Berkshire Hathaway a reported annual dividend of $903,847,747. This includes $224,647,747 from the common stock and $679,200,000 from a $10 billion position of Occidental preferred stock, which yields 8%.
In addition, he owns warrants to buy an additional 83.9 million shares for $5 billion, which translates to $59.62 per share.
In June, Mr. Buffett bought company shares for nine straight days, upping his stake to an astounding 28.8%. It was reported that from June 5th on, he acquired an additional 7.3 million company shares at prices around the $60 level for the next nine trading days. Occidental Petroleum is Berkshire Hathaway’s sixth-largest holding, and it is by far the largest institutional investor in the company.
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