You probably won't hear Warren Buffett referred to as an income investor very often. But that doesn't mean that he doesn't like dividends.
There's a pretty good case to be made that Buffett actually loves dividends. Just look at Berkshire Hathaway's (BRK.A +1.44%) (BRK.B +1.12%) portfolio. Buffett has over $270 billion invested in these five dividend stocks.
1. Apple
Apple (AAPL 0.04%) accounts for a huge chunk of that total investment all by itself. Berkshire's stake in the technology giant is worth close to $173.5 billion. That makes Apple by far the biggest position in Berkshire's portfolio.
NASDAQ: AAPL
Key Data Points
It might be easy to forget that Apple pays a dividend. Sure, the company's dividend yield of only 0.51% isn't anything to get excited about. However, when you own as many Apple shares as Berkshire does, that nominal yield can still add up to a lot of annual income.
2. Bank of America
Buffett isn't as big a fan of bank stocks as he used to be. However, he clearly still likes Bank of America (BAC 1.64%). After Buffett bought more BofA shares in the first quarter of 2023, Berkshire now owns close to $29.6 billion of the stock.
NYSE: BAC
Key Data Points
The banking crisis has caused Bank of America's share price to fall this year. Buffett's buying in Q1 was no doubt spurred in large part by the stock's valuation looking more attractive as a result of this sell-off. But the decline also pushed BofA's dividend yield higher. It currently stands at nearly 3.1%.
3. American Express
American Express (AXP 1.01%) ranks as one of Buffett's longest-held positions. The legendary investor first bought shares of American Express for Berkshire's portfolio three decades ago. Amex is also one of Berkshire's biggest positions, with a valuation of over $26 billion.
NYSE: AXP
Key Data Points
The financial services company isn't known for its juicy dividends. Its dividend yield is only around 1.4%. However, Buffett's yield based on cost is much higher because he's held onto Berkshire's Amex shares for so long.
4. The Coca-Cola Company
How much does Buffett like The Coca-Cola Company (KO 1.01%)? In addition to owning Coca-Cola shares for 35 years, he once revealed that he drinks five Cokes per day. Berkshire's stake in Coca-Cola currently tops $24 billion.
The income that Coca-Cola generates for Berkshire is enough to pay for all the drinks Buffett could ever want. Coca-Cola's dividend yield stands at nearly 3.1%. Berkshire should make in the ballpark of $736 million this year in dividends from its position in the food and beverage company.
5. Chevron
Buffett sold some shares of Chevron (CVX 1.44%) in the first quarter of 2023. However, the integrated oil and gas producer remains Berkshire's fifth-largest holding with a value of close to $20.7 billion.
Chevron's dividend yield is currently a little under 3.9%. That makes it one of Berkshire's highest-yielding stocks.
The best of the bunch
Which of Buffett's top dividend stocks is the best of the bunch? I think the answer depends on your investing style.
For income investors, Chevron will probably be the most attractive of these stocks. Although it could be somewhat volatile as a result of oil price fluctuations, the company has increased its dividend for 36 consecutive years.
If you're more of a value investor, you might prefer Bank of America. Its shares trade at a forward earnings multiple of around 8.1x.
Growth investors, on the other hand, will likely view Apple as the best pick. Technology trends such as the adoption of artificial intelligence and augmented reality/virtual reality could provide nice tailwinds for the stock over the long term. And even growth investors should like the extra income from Apple's dividend.
