Billionaires buy dividend stocks for the same reasons other people do. They like the assurance of money flowing in regularly. Of course, they also prefer that their stocks grow as well as pay dividends.
Warren Buffett and George Soros without question rank among the most successful billionaire investors on the planet. The two men don't agree about everything, but they're not polar opposites. Here are three dividend stocks that billionaires Buffett and Soros both own.
1. Occidental Petroleum
Buffett has been gobbling up shares of Occidental Petroleum (OXY 0.89%) for Berkshire Hathaway's (BRK.A 1.18%) (BRK.B 1.30%) portfolio like it's going out of style. Occidental now ranks as the sixth-largest position for Berkshire. The company secured regulatory approval in August to buy up to 50% of Oxy.
Soros appears to be a fan of the oil stock, too. Like Buffett, he has added to his stake in Occidental Petroleum. His Soros Capital Management investment firm now owns 221,500 shares of the oil and gas producer.
Did these two billionaires buy Occidental for its dividend? It's highly unlikely. Oxy's dividend yield stands at only 0.8%. Even though the company expects to increase its dividend significantly going forward, that's probably not a major factor in why Buffett and Soros both like Occidental.
Instead, they almost certainly were attracted to Occidental's valuation and growth prospects. Oxy's shares currently trade at only 10 times expected earnings even after the stock has skyrocketed over 120% this year. The company should also be able to grow over the next few years with continued demand for fossil fuels and its expansion into carbon capture.
2. Raytheon Technologies
You won't find Raytheon Technologies (RTX 0.84%) listed among Berkshire's holdings. However, Buffett and Berkshire do have a position in the aerospace giant. Berkshire owns New England Asset Management, which has a small stake in Raytheon. It also owns 3.5% of Markel, which has a small number of shares of Raytheon as well.
Soros' ties to Raytheon are more direct. His Soros Capital Management owns 50,300 shares of the aerospace and defense company.
Raytheon is much more generous with its dividends than Occidental Petroleum. The company's dividend yield currently tops 2.5%. Raytheon has also paid a dividend every year since 1936.
Another plus for Raytheon is its relative stability. The company has long been a leading defense contractor. Its merger with United Technologies in 2020 made Raytheon a top player in the commercial aerospace market as well. This gives the company balance and more growth opportunities.
3. Microsoft
Buffett has been friends with Microsoft (MSFT -1.27%) co-founder Bill Gates for years, but he never bought the tech stock. However, he and Berkshire do indirectly own a stake in Microsoft thanks to their ownership of New England Asset Management and position in Markel.
Soros, on the other hand, invested in Microsoft years ago. While Soros Capital Management's stake in the tech giant is lower than in the past, it still owns 45,400 shares.
Microsoft's dividend is often an afterthought for anyone buying the stock. The company's dividend yield is a little under 1%. However, Microsoft has steadily boosted its payout with the dividend growing nearly 170% over the past 10 years.
There's a pretty good argument that Microsoft ranks as the safest big tech stock around. It dominates the office productivity market. The company is also a leader in multiple fast-growing markets, including cloud hosting, cybersecurity, and gaming.
