If anyone knows that it takes money to make money, it's Warren Buffett. But the longtime Berkshire Hathaway (BRK.A 0.09%) (BRK.B 0.14%) CEO also knows that making significant passive income is actually easy if you have enough to invest in the right stocks.
Some great stock ideas can be found right in Berkshire's own portfolio. Investing $100,000 in each of these three Buffett dividend stocks can make you more than $12,800 in combined passive income per year.
1. Store Capital
Store Capital (STOR) ranks as one of the highest-yielding dividend stocks among Berkshire's holdings. Its dividend yield currently tops 5.4%. An initial investment of $100,000 in the stock would generate annual income of more than $5,400.
This shouldn't be surprising. Store Capital is a real estate investment trust (REIT). REITs must return at least 90% of their taxable income to shareholders in the form of dividends.
However, Store Capital hasn't given investors much to be happy about other than dividend income lately. Its stock has fallen with increased economic uncertainty. The REIT focuses heavily on leasing properties to restaurants, many of which have been hurt by rising inflation rates.
But Store Capital itself is largely immune to the impact of inflation on its leases. The company has built-in rent escalations that help offset rising prices. Its business should be able to weather any storm relatively well.
Chevron's (CVX 0.43%) dividend yield of a little over 3.6% is the lowest it's been in several years. However, that's enough for an investment of $100,000 to provide over $3,600 in passive income on a yearly basis.
The oil and gas giant hasn't reduced its dividend, by the way. Chevron has increased its dividend for 35 consecutive years. The company's lower dividend yield is solely due to the stock's impressive performance.
Chevron has been a big winner for Buffett. The stock now ranks as Berkshire's third-largest holding. And the Oracle of Omaha continues to be bullish about the prospects for the oil industry.
Importantly, Chevron continues to invest in both traditional energy (i.e., oil and gas) and new energy sources. The company's CEO, Mike Wirth, said in Chevron's Q1 conference call last week, "We're on a path to delivering higher returns and lower carbon and rewarding our stakeholders all along the way."
If you've been keeping track, Store Capital and Chevron together could generate at least $9,000 in passive income per year. Investing another $100,000 in AbbVie (ABBV -0.64%) would add another $3,840, bringing the total to $12,840.
AbbVie's dividend is as dependable as they come. The big drugmaker is a Dividend King with a track record of 50 consecutive years of dividend increases.
The stock has also held up well. AbbVie is handily beating the overall market so far this year. That's true even after its shares sank last week following the company's disappointing Q1 update. AbbVie missed Wall Street's revenue estimate and lowered its 2022 adjusted earnings guidance.
However, there was plenty of good news in the company's latest quarterly update. In particular, AbbVie appears to be in a solid position to quickly rebound from the loss of U.S. exclusivity for top-selling Humira next year. The pharmaceutical company should be able to keep those dividends flowing for a long time to come.