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2 Dividend Stocks You Can Buy Cheaper Than These Billionaires Did

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One constant investors can count on is the reliability of dividend stocks to see them through periods of volatility. We’re definitely in one of those periods today.

The stock market plummeted the other day, only to bounce back the following one. A lot of uncertainty hangs in the air ahead of President-elect Donald Trump’s inauguration. While there is a lot of hope, many of his economic proposals carry with them a lot of uncertainty. That makes today an excellent time to buy dividend stocks.

24/7 Wall St. Insights:

  • Dividends offer a powerful multiplier effect to your portfolio and historically have accounted for most of the gains by the S&P 500.
  • A number of excellent dividend stocks are down below the price billionaire investors recently paid, making them excellent entry points for small, retail investors.
  • Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks“ now.

The asset managers at Hartford Funds looked at the performance of the benchmark S&P 500 going all the way back to 1930, and found that dividends contributed 34% to the total return of the index over that 93-year period. 

The study also found that from 1960 on, dividends represented an astounding 85% of the index’s total return. Reinvesting dividends in the benchmark, coupled with the power of compounding, would have turned a $10,000 investment into more than $5.1 million compared to the $796,432 that grubstake would have become based just on the index’s price alone.

It’s why billionaires love dividend stocks. Warren Buffett, one of the greatest investors of our time, collects around $6 billion every year in dividend payments for Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B). While he might not specifically buy a stock because it pays a dividend, he still owns about two dozen income generators.

Below are two stocks billionaires have been buying, but you can get them at a cheaper price than they did.

Occidental Petroleum (OXY)

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The leading Permian Basin oil and gas giant is one of Warren Buffett’s favorite fossil fuel companies

Speaking of Buffett, his favorite oil company is on sale. Occidental Petroleum (NYSE:OXY) is down 35% from its 52-week high and is trading under $46 a share, a new 52-week low. In fact, the oil stock is trading at a level it has seen since 2022 when Buffett began buying OXY with two hands.

Occidental stock is depressed because oil prices are falling. West Texas Intermediate (WTI) crude is down to $70 a barrel, 5% lower than a year ago, but nearly 20% below the highs it hit in April. However, OXY’s midstream assets actually benefit from lower crude oil and transportation rates from the Permian to the Gulf Coast. It’s not a wash, but but it helps bolster the bottom.

Yet there is reason to believe that could begin turning around. Trump has promised to encourage domestic oil production that has been thwarted in many ways by the Biden administration. Because the oil- and gas-rich Permian Basin is critical to the country’s reserves, and Occidental is the largest independent producer in the region, it could dramatically benefit from favorable policies coming out of the White House.

Buffett owns 255 million shares of OXY at an average price of $51 per share. Its valued at $13.2 billion, the sixth largest position in his portfolio. It pays a dividend that yields 1.92% annually. 

Look for Occidental Petroleum to rebound from this depressed level, but you can buy in now and pay less than Buffett did.

LVMH Moet Hennessy Louis Vuitton (LVMUY)

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Luxury retailer LVMH Moet Hennessy Louis Vuitton is trading below prices founder Bernard Arnault paid all through the year

Luxury goods retailer LVMH Moet Hennessy Louis Vuitton (OTC:LVMUY) is another stock that’s trading lower this year. Shares are down 20% year-to-date as concerns about the economy, especially in China, have weighed on performance.

Yet the company remains steadfast in its belief it can wait out the turmoil. The French fashion house owns not only its namesake brands, but also Tiffany, Dior, Fendi, Dom Perignon, and Sephora. There are some 75 different “houses” featuring 60 different brands. 

Company founder Bernard Anault has said, “Luxury goods are the only area in which it is possible to make luxury margins.” And Arnault has been buying LVMH stock all through the year, spending tens of millions of dollars in the process. As investing legend Peter Lynch once noted, “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”

The luxury retailer is an impressive dividend growth stock, too. As a European company, it pays dividends twice annually , but has grown the payout by a compound annual growth rate of 13% over the past decade. 

With China initiating a billion-dollar stimulus program to reignite consumer spending, coupled with hopes for a robust market here in the U.S., LVMH Moet Hennessy Louis Vuitton is a stock worth adding to your portfolio today.

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We’ve assembled some of the best credit cards for users today.  Don’t miss these offers because they won’t be this good forever.

 

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

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