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• With interest rates headed lower, dividend stocks will be in favor.
• Berkshire Hathaway is up over 20% in 2024.
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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. Known for his long buy-and-hold strategies and his massive portfolio of public and private holdings, he remains one of the preeminent investors in the entire world.

One reason for Berkshire Hathaway’s stunning success over the years is that Buffett always tried to stay with stock ideas he understood, which has proven to be a winning hand. In addition, many companies pay solid and reliable dividends in their portfolio.

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 just seven top companies make up 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.

Why do we cover Warren Buffett stocks?

With a 15-year track record of covering Buffett and Berkshire Hathaway at 24/7 Wall St., it is important to keep our readers updated on the top news from the financial powerhouse. Berkshire Hathaway had an excellent second quarter and looks poised to post tremendous results for 2024.

American Express

This stock has been strong in 2024 and pays a 1.07% dividend. American Express Co. (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 12.9% of the portfolio.

Apple

It’s almost hard to comprehend that the legacy technology giant still makes up a stunning 28% of the Berkshire Hathaway portfolio with 400 million shares and holds nearly 2.6% of Apple’s stock even after selling over 500 million 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, video, 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 0.46% dividend.

Bank of America

The company posted solid second-quarter results and pays a 2.66% dividend. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States. Through its subsidiaries, it provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide.

It operates in four segments:

• Consumer Banking
• Global Wealth & Investment Management (GWIM)
• Global Banking
• Global Markets

The Consumer Banking segment offers:

• Traditional and money market savings accounts
• certificates of deposit and IRAs
• Non-interest and interest-bearing checking accounts, investment accounts, and products
• Credit and debit cards
• Residential mortgages and home equity loans
• Direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans

The GWIM segment provides investment management, brokerage, banking, trust and retirement products and services, wealth management solutions, customized solutions, and specialty asset management services.

The Global Banking segment offers:

• Lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending
• Treasury solutions, such as treasury management, foreign exchange, short-term investing options, and merchant services
• Working capital management solutions
• Debt and equity underwriting and distribution
• Merger-related and other advisory services
• Fixed-income and equity research and certain market-based services.

The Global Markets segment provides market-making, financing, securities clearing, settlement, custody services, securities and derivative products, and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products.

Warren Buffett owns 858,180,506 bank shares after selling almost 200 million shares this year, 11.1% of the float and 11% of Berkshire Hathaway’s portfolio.

Chevron

This integrated giant is a safer option for investors looking to position themselves in the energy sector. It pays a rich 4.59% dividend and looks cheap after the recent oil sell-off. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries. The company operates in two segments.

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 almost a year ago that it has entered into a definitive agreement with Hess Corp. (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.

Berkshire Hathaway owns 6.5% of Chevron’s outstanding stock with 118,610,534 shares, and the energy giant makes up 5.5% of the portfolio.

Coca-Cola

This company remains a top Warren Buffet holding as he owns a massive 400 million shares, 9.3% of the float and 9.3% of the Berkshire Hathaway portfolio. Coca-Cola Co. (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, it is the number one 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 is also important to remember that the company owns almost 20% of Monster Beverage Corp. (NASDAQ: MNST), which continues to deliver big numbers.

Investors are paid a very dependable 2.70% dividend.

Kraft Heinz

Even in bad times, everybody has to eat, and this company always stands to benefit while paying a tremendous 4.49% dividend. Kraft Heinz Co. (NYSE: KHC) was formed via the merger of H.J. Heinz and Kraft Foods.

The company is a leading global food company with estimated annual revenues of $25 billion from well-known brands such as Kraft, Heinz, Oscar Meyer, and Maxwell House.

Kraft Heinz is North America’s third-largest food and beverage manufacturer. It derives 76% of its revenues from that market and 24% from International.

The Company’s additional brands include:

• ABC
• Capri Sun
• Classico
• Jell-O
• Kool-Aid
• Lunchables
• Ore-Ida
• Oscar Mayer
• Philadelphia
• Planters
• Plasmon
• Quero
• Weight Watchers
• Smart Ones
• Velveeta
• Target

Occidental Petroleum

Over the past two years, Berkshire Hathaway has been buying the shares heavily. Now, there are a massive 255,281,524 shares, which account for 4.3% of the portfolio and pay a decent 1.72% dividend. Occidental Petroleum Corp. (NYSE: OXY) 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.

The 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.

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 of this year, Buffett bought the company’s shares for nine straight days, upping his stake to an astounding 27.3%. 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.

Conclusion

Buffet’s penchant for only owning the stock of companies he understands inside and out makes sense now for growth and income investors worried about the potential for a steep market decline. While these top companies could sell off in a significant correction, they will hold on far better than most, and many of these top companies (except Apple) are offering the best entry points and dividends in some time.

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