Consistently ranking as one of the richest individuals in the world, Warren Buffett got that way by being an all-time great investor. This is one of the reasons it's worth paying attention to the stocks that are owned by the Oracle of Omaha's Berkshire Hathaway (BRK.A 0.03%) (BRK.B 0.14%).
If you're an investor seeking attractively priced, high-yielding dividend growth stocks, here are two in the Berkshire portfolio that are potentially excellent picks to buy hand over fist in July. Let's find out a bit more about them.
1. U.S. Bancorp
Banks are the lifeblood of the economy. With $587 billion in assets and over 2,200 banking offices in the United States, U.S. Bancorp (USB 2.46%) plays an important role in providing capital to businesses and individuals in the U.S. The funds that U.S. Bancorp provides to its customers are used by businesses to expand their operations, and consumers purchase homes and vehicles with the proceeds.
And nobody understands the importance of U.S. Bancorp to the U.S. economy better than Warren Buffett. With the company's 9.7% stake in U.S. Bancorp valued at $6.6 billion, the stock is Berkshire Hathaway's 10th largest holding.
Thanks to rising interest rates that will push the bank's net investment income higher, analysts expect that U.S. Bancorp's earnings will grow at 5.5% annually through the next five years. The stock's 3.9% dividend yield is also more than double the S&P 500 index's 1.7% yield.
And with the dividend payout ratio hovering around 40.5%, U.S. Bancorp's dividend is positioned to increase by the mid-single-digits each year for the foreseeable future. Along with its market-trouncing yield, this makes the stock a compelling buy for investors seeking a mix of income and growth potential.
U.S. Bancorp's forward price-to-earnings (P/E) ratio of 10.5 is moderately higher than the regional bank industry average forward P/E ratio of 9.3. But this premium is arguably justified by the stock's status as a well-run leader in its industry.
2. Verizon Communications
What are smartphones used for in 2022? Perhaps the better question would be as follows: What aren't smartphones used for nowadays? Chances are you're reading this article on your smartphone. And many smartphone users also shop online, check their emails, and video stream on their smartphones. Berkshire Hathaway's $70 million stake in Verizon Communications (VZ 0.63%) is admittedly a small position.
But with a 31.5% U.S. wireless subscriptions market share in the first quarter of 2022, Verizon is a major player in the telecom sector. As smartphones become more essential with each passing year, demand for Verizon's wireless services is expected to rise over time. This is why analysts believe that the company will log a 3.6% compound annual growth rate in its earnings for the next five years.
Berkshire Hathaway has to be pleased with Verizon's market-tripling 5% dividend yield. And considering that the stock's payout ratio will likely come in below 48% in 2022, Verizon should have little difficulty in handing out dividend raises in the years to come.
Best of all, the stock's forward P/E ratio of 9.5 is well below the communication services sector forward P/E ratio of 14.5. Verizon's significant discount to its sector means that it could eventually soar once a favorable market sentiment returns to the stock.