While many baby boomers have enjoyed a long bull market over the past 35 years, there is a point when income becomes more critical than stock appreciation. The reason is simple: those who leave their careers to enjoy a well-deserved retirement lose the benefit of a regular salary and benefits associated with their jobs, like 401(k) matching and company-paid healthcare. In addition, many baby boomers take advantage of their retirement years to travel and enjoy the rewards they have worked to achieve for a lifetime.
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. Berkshire Hathaway has a long history of beating the market. Over the past 20 years, Berkshire Hathaway delivered an average annual return of 12.1%, compared to the S&P 500’s 11.5%
That kind of performance and stability make Buffett’s blue-chip dividend stocks perfect for baby boomers. Four of the companies offer outstanding entry points and will continue to deliver their quarterly dividends for years to come. Plus, all are Buy-rated at top Wall Street firms that we cover.
Why do we cover Buffett stocks?
There are few investors with the results and the reputation Buffett has garnered over the past 50 years, and while investing has changed over the previous half-century, buying good companies with products and services that are known worldwide while paying dividends will always stay in style.
Chevron
This Buffett pick is an American multinational energy corporation predominantly specializing in oil and gas.
This integrated giant is a safer option for investors looking to position themselves in the energy sector. It pays a hefty 4.38% dividend, which was recently raised by 5%. Chevron Corp. (NYSE: CVX | CVX Price Prediction) engages in integrated energy and chemicals operations worldwide through its subsidiaries. It 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; and transportation, storage
- 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 renewable fuels
- Transporting crude oil and refined 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
It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.
Chevron announced in late 2023 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. The Federal Trade Commission approved the deal last October, and it should close soon.
Jefferies has a Buy rating and a price target of $197.
Coca-Cola
Coca-Cola is an American multinational corporation founded in 1892.
This company remains a top long-time holding of Buffett. He owns a massive 400 million shares and pays a dependable 2.82% dividend. 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
- Coca-Cola Light
- Coca-Cola Zero Sugar
- Caffeine-free Diet Coke
- Cherry Coke
- Fanta Orange
- Fanta Zero Orange
- Fanta Zero Sugar
- Fanta Apple
- Sprite
- Sprite Zero Sugar
- Simply Orange
- Simply Apple
- Simply Grapefruit
- Fresca
- Schweppes
- Dasani
- Fuze Tea
- Glacéau Smartwater
- Glacéau Vitaminwater
- Gold Peak
- Ice Dew
- Powerade
- Topo Chico
- Minute Maid
Globally, it is the top provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks. Recently, the company announced a new probiotic brand called Simply Pop aimed at the health-conscious Gen Z crowd. The company said Simply Pop contains 6g of prebiotic fiber “to support gut health,” along with Vitamin C and Zinc to “aid immune function.” The drinks, sold in 12-ounce cans, will be available in five flavors: strawberry, pineapple mango, fruit punch, lime, and citrus punch.
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 16.7% of Monster Beverage Corp. (NASDAQ: MNST), which continues to deliver big numbers.
UBS has a Buy rating with a $78 target price.
Diageo
This British multinational alcoholic beverage company is headquartered in London.
This Buffett pick is one of the largest producers of alcoholic beverages in the world and pays a solid 3.84% dividend. Diageo PLC (NYSE: DEO) produces, markets, and sells alcoholic beverages worldwide.
It offers:
- Scotch whiskey, gin, vodka, rum, beer and spirits
- 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 comprise 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
Johnnie Walker super premium brands: The Singleton, Cardhu, Talisker, Lagavulin, and other malt brands.
Bank of America Securities has a Buy rating and a $136 target price.
Kraft Heinz
This American multinational food company was formed by the merger of Kraft Foods and H.J. Heinz.
Even in bad times, everybody has to eat, and this company always stands to benefit while paying a tremendous 5.46% 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 in excess 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
- Philadelphia
- Planters
- Plasmon
- Quero
- Weight Watchers
- Smart Ones
- Velveeta
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