There are more than 50 stocks in Berkshire Hathaway's (BRK.A 1.18%) (BRK.B 1.30%) stock portfolio, many of which were hand-selected by Warren Buffett himself. And since Buffett is a fan of reliable, passive income, it shouldn't come as much of a surprise that many of Berkshire's stocks are dividend payers.
While rock-solid dividend stocks have generally fared better than growth stocks, they haven't exactly been immune to the recent market downturn. As a result, some of Berkshire's top dividend stocks look like excellent opportunities for income-seeking investors.
In no particular order, here are 10 dividend stocks from Berkshire's portfolio that look like especially strong buying opportunities right now.
Coca-Cola (Yield: 2.8%)
It's tough to call Coca-Cola (KO 2.14%) a "bargain" stock right now, as it is only about 6% below its high and is handily outperforming the S&P 500 in the current downturn. However, it's tough to find a more stable and predictable dividend stock to create a steadily growing income stream in your portfolio. In fact, Coca-Cola recently announced its 60th consecutive annual dividend increase.
Store Capital (Yield: 5.7%)
The only real estate investment trust, or REIT, in Berkshire's portfolio, Store Capital (STOR) owns a portfolio of single-tenant commercial properties occupied by tenants in the service, retail, or manufacturing industries. Store's tenants are generally well-positioned to weather recessions and e-commerce disruption, and the company is not only one of the highest-yielding stocks in Berkshire's portfolio, but it has given investors a raise every year since its IPO.
Bank of America (Yield: 2.7%)
Bank of America (BAC 3.35%) is one of Berkshire's largest investments, and it has been beaten down significantly in the recent market decline, down 36% from the highs. However, the bank is well-capitalized and should weather any economic conditions just fine. In fact, as one of the more interest rate-sensitive banks, Bank of America could be a major beneficiary of rising interest rates in 2022 and 2023.
Chevron (Yield: 3.8%)
A more recent investment for Berkshire, Chevron (CVX 1.54%) has quickly become one of the portfolio's largest positions. While Chevron is one of the portfolio's best performers, up 35% over the past year, it has pulled back quite a bit from the recent highs and could continue to outperform if oil prices stay elevated.
Mastercard (Yield: 0.6%)
Mastercard (MA 0.15%) isn't exactly a high-yield dividend stock, but it's a powerhouse business. There's essentially a duopoly in the payment network space (the other one is coming later in the list), and with many areas of the world still in the earlier stages of the cashless payment revolution and an estimated $185 trillion global payment opportunity, Mastercard still has plenty of room to grow.
U.S. Bancorp (Yield: 3.9%)
U.S. Bancorp (USB 2.56%) is down by 26% from its recent highs, but it is still one of the more expensive big bank stocks on a price-to-book basis. Even so, you get what you pay for with this one. U.S. Bancorp has a fantastic track record of profitability and responsible lending -- in fact, it was one of the few banks to stay profitable throughout the 2008-09 financial crisis.
Vanguard S&P 500 ETF (Yield: 1.6%)
Technically, this isn't a stock, but an exchange-traded fund, or ETF. However, Buffett has said several times that the best investment most people can make is a low-cost S&P 500 index fund like this, so it's worth including on the list. The Vanguard S&P 500 ETF (VOO -0.84%) invests in all 500 companies in the S&P 500 and is essentially a bet on American business as a whole.
Visa (Yield: 0.7%)
Berkshire owns both Mastercard and Visa (V -0.59%) in its portfolio, and both are great stocks to own, especially with both about 20% off the highs. With a massive global payments opportunity, this industry leader could still have plenty of room to grow, and since it makes its money by taking a percentage of each transaction on its network, it could actually end up being a net beneficiary of inflation.
Apple (Yield: 0.6%)
Apple (AAPL -1.22%) is the largest investment in Berkshire's stock portfolio, and it isn't even close. Buffett isn't the most tech-savvy investor, but he knows a great business when he sees one. Apple has an incredibly loyal customer base, tremendous pricing power, and a great history of innovation. With shares 22% below the highs, now could be a smart time to take a closer look at this unstoppable business.
American Express (Yield: 1.3%)
American Express (AXP 6.22%) has declined by 27% from its highs, but this is a best-in-breed business that is worth a closer look. Unlike Visa and Mastercard, Amex is a lender and a payment processor and benefits from both fee and interest income. Not only should its interest income rise with overall interest rates, but inflation could end up driving transaction volume higher over the coming years.
A collection of rock-solid businesses that should deliver strong returns over time
It's hard to make a solid case against any of these businesses as long-term investments, so the best choice(s) for you depends on your particular income needs and investment goals. Buffett has absolutely no idea what any of them will do over the next few weeks or months (and neither do I), but these are rock-solid businesses that should deliver excellent performance for investors focused on the long run.
