Warren Buffett may no longer be CEO of Berkshire Hathaway, but he's not likely to soon be forgotten.
He remains executive chair of the company, and the lessons he taught his employees and the rest of the world will surely last for generations. Buffett also left his mark on Berkshire Hathaway's massive stock portfolio, which is valued today at roughly $363 billion.
Under his leadership, the conglomerate initiated positions in a number of stocks that could remain in the portfolio for decades. Two of those stakes alone now earn the company roughly $1.44 billion in combined annual dividends.
Image source: The Motley Fool.
1. Coca-Cola: $842.5 million
The iconic consumer beverage company is the longest-held stock position in Berkshire's portfolio.
Buffett and his team began buying Coca-Cola (KO +0.22%) in the 1980s and completed their 400 million-share purchase in the early 1990s. Since then, the conglomerate hasn't sold a share, and the Coca-Cola stake is worth roughly $35.4 billion, accounting for 9.4% of Berkshire's portfolio.
Over the years, Coca-Cola has significantly expanded its beverage line-up to adapt to changing consumer preferences. The company has also moved to a less capital-intensive model, in which it franchises its bottling operations externally, allowing it to focus on adding new beverages and its marketing efforts.
Coca-Cola has proven to be one of the most durable dividend stocks in the entire market. It's part of an elite group of stocks called Dividend Kings that have increased their dividends annually for at least 50 consecutive years. In fact, Coca-Cola has done this for 64 consecutive years.
NYSE: KO
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Meanwhile, its projected free cash flow of $12.4 billion this year should easily cover its projected annual dividend distribution of roughly $9.1 billion.
At the current share price, the dividend yields roughly 2.4%, which is quite solid, particularly considering that the stock has risen nearly 29% so far this year. Based on Berkshire's long-held stake and the beverage company's payout, Berkshire will collect $842.5 million in dividends from Coca-Cola this year.
"The lesson from Coke and AMEX [American Express]? When you find a truly wonderful business, stick with it," Buffett wrote in his 2023 letter to shareholders. "Patience pays, and one wonderful business can offset the many mediocre decisions that are inevitable."
2. Chevron: $598.9 million
Berkshire has not owned shares of U.S. oil company Chevron for nearly as long as it has owned Coca-Cola shares, and it's still hard to say whether Berkshire plans to keep it in the portfolio long term. Berkshire began buying the stock in 2020 and has since both increased and reduced its position.
In the first quarter of this year, Berkshire sold 35% of its Chevron shares. Still, Berkshire currently owns an $18 billion stake in the company, which accounts for about 5% of its portfolio as of this writing. Higher gas prices resulting from the Iran war have significantly benefited Chevron.
NYSE: CVX
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The company is also the only U.S. oil company that has maintained operations in Venezuela for decades. With the ouster of former Venezuelan President Nicolás Maduro and much more U.S. influence in the region, Chevron plans to significantly increase its oil production in the country.
Chevron is also a strong dividend payer. While it doesn't raise its payout every single year, it has steadily raised it since 1990, and has never cut it in that time frame.
With a recent trailing 12-month yield of 3.3%, the company pays out close to $599 million in dividends annually. And with its recent increase in profits due to soaring gas prices, the company is well positioned to increase its payouts further.
