Wall Street is cluttered with large financial investment banks, wealth management companies, mutual funds, and hedge funds. But in the end, none can hold a candle to the simplistic yet effective value investing style that Warren Buffett has brought to the table over the past 60-plus years.

In a little more than six decades, Warren Buffett has transformed his roughly $10,000 seed investment into approximately $81 billion. That's a compound annual return rate of around 28% since the mid-1950s, whereas the stock market has returned an average of 7% per year, inclusive of dividend reinvestment and when factoring in inflation, over the long run.

Berkshire Hathaway CEO Warren Buffett answering questions during his company's annual meeting.

Warren Buffett answering questions during Berkshire Hathaway's annual shareholder meeting. Image source: The Motley Fool via Flickr.

How much will Buffett's company pocket in dividends this year?

You might think the Oracle of Omaha has some magic trick he's used to create wealth for himself and his company, Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B), over time, but it's really no magic at all. Buffett's buy-and-hold ethos and his ability to identify inexpensive businesses with long-term staying power have done the trick and pushed Berkshire's investment portfolio to a value of $186.5 billion as of Jan. 13, 2019.

Of course, it's not just stock appreciation that interests Buffett. Dividend income does as well.

Companies that pay a dividend have historically outperformed companies that don't offer a regular payout over the long run. That's because dividend-paying companies often have time-tested business models, and they wouldn't be sharing a percentage of their profits with their shareholders if they didn't foresee continued growth and profitability. In 2019, Berkshire Hathaway stands to collect a pretty penny in dividend income.

How much, you ask? Let's take a closer look.

A businessman counting a stack of crisp cash bills in his hands.

Image source: Getty Images.

The non-dividend payers in Berkshire's portfolio

According to Berkshire Hathaway's 13-F filing with the Securities and Exchange Commission on Nov. 14, 2018 -- a filing required of all firms with more than $100 million in assets under management -- it held shares in 47 securities, some of which had multiple voting classes available. The first step is to weed out which of these 47 securities will not pay a regular dividend in 2019. Those investments are:

  • Axalta Coating Systems
  • Charter Communications
  • DaVita
  • Liberty Global Class A
  • Liberty Global Class C
  • Liberty Latin America Class A
  • Liberty Latin America Class C
  • Liberty SiriusXM Group Series A
  • Liberty SiriusXM Group Series C
  • StoneCo
  • Teva Pharmaceutical Industries
  • United Continental Holdings
  • USG Corp.
  • Verisign

These 14 companies don't provide any dividend income to Buffett. But in another context, it means that 33 of his holdings do.

Buffett is raking in big bucks with these dividend stocks

Understandably, a lot can change over the course of the year. Berkshire's holdings are unlikely to remain static, and the 33 dividend-paying companies could also see their payouts increase or, in rarer cases, decrease. But if things were to remain as they are as of the 13-F filing on Nov. 14, here's how much Berkshire Hathaway would pocket in dividend income from each of his holdings.

Company Shares Owned Annual Dividend Estimated Income
American Airlines Group 43,700,000 $0.40 $17,480,000
Apple 252,478,779 $2.92 $737,238,035
American Express 151,610,700 $1.56 $236,512,692
Bank of America (NYSE:BAC) 877,248,600 $0.60 $526,349,160
Bank of NY Mellon 77,849,476 $1.12 $87,191,413
Costco Wholesale 4,333,363 $2.28 $9,880,068
Delta Air Lines 65,535,000 $1.40 $91,749,000
General Motors 52,461,411 $1.52 $79,741,345
Goldman Sachs 18,353,635 $3.20 $58,731,632
JPMorgan Chase 35,664,767 $3.20 $114,127,254
Johnson & Johnson 327,100 $3.60 $1,177,560
Kraft Heinz (NASDAQ:KHC) 325,634,818 $2.50 $814,087,045
Coca-Cola 400,000,000 $1.56 $624,000,000
Southwest Airlines 56,047,339 $0.64 $35,870,297
Mastercard 4,934,756 $1.32 $6,513,878
Moody's Corp. 24,669,778 $1.76 $43,418,809
Mondelez International 578,000 $1.04 $601,120
M&T Bank 5,382,040 $4.00 $21,528,160
Oracle 41,404,791 $0.76 $31,467,641
Procter & Gamble 315,400 $2.87 $905,198
PNC Financial Services 6,087,319 $3.80 $23,131,812
Phillips 66 15,433,024 $3.20 $49,385,677
Restaurant Brands Int'l 8,438,225 $1.80 $15,188,805
Sirius XM Holdings 137,915,729 $0.05 $6,895,786
Store Capital 18,621,674 $1.32 $24,580,610
Synchrony Financial 20,803,000 $0.84 $17,474,520
Torchmark 6,353,727 $0.64 $4,066,385
Travelers Cos. 3,543,688 $3.08 $10,914,559
United Parcel Service 59,400 $3.64 $216,216
U.S. Bancorp 124,923,092 $1.48 $184,886,176
Visa 10,562,460 $1.00 $10,562,460
Verizon 928 $2.41 $2,236
Wells Fargo 442,361,700 $1.72 $760,862,124

Table and income calculations by author. Data source: Berkshire Hathaway 13-F, Yahoo! Finance.

Add those 33 columns up, and Buffett's Berkshire Hathaway is in line to receive $4,646,737,673 in dividend payments in 2019.

Mind you, most of these companies raise their quarterly payout each year, meaning Berkshire may have an outside chance at $5 billion in annual dividend income by perhaps 2020, in my view.

What stands out?

Aside from simply loving boring businesses that make money, there are a few things that stick out from the data above.

The Oscar Mayer Wienermobile parked on a highway.

Oscar Mayer is one of many brands under the Kraft Heinz umbrella. Image source: Kraft Heinz.

First of all, you might be shocked to learn that Apple, despite being Buffett's largest holding by market value, isn't Berkshire's top income stock. In fact, it actually slots in third, behind the nearly $761 million Wells Fargo will bring in and the $814 million Kraft Heinz will generate. Kraft Heinz, the company behind the namesake Kraft foods and Heinz condiments, is a smart hold in practically any economic environment. Consumers' food-buying habits tend to be relatively predictable, and brand-name companies like Kraft Heinz often have a loyal customer base that's willing to accept higher prices when needed. That's a formula for consistent cash flow, and it's a big reason why Kraft Heinz offers such a robust payout.

You'll also likely notice that Buffett has a love affair with big banks -- at least in the dividend department. Between Wells Fargo, Bank of America, U.S. Bancorp, JPMorgan Chase, American Express, and Goldman Sachs (and ignoring his smaller bank holdings), Buffett's company will bring in almost $1.9 billion in dividends in 2019. That's assuming these payouts don't increase even more. A rising rate environment is usually a very good thing for banks, as variable-rate loans reset higher and higher credit card interest rates allow for improved net interest income. Bank of America is particularly sensitive to interest rate increases and has seen its net interest income expand faster than that of any of its peers as rates have risen over the past three years.

Long story short, if dividends have been a major contributing factor to Warren Buffett's success, they can be so for you, too.

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