Berkshire Hathaway, led by Warren Buffett, boasts an impressive stock portfolio valued at $300.5 billion. A detailed examination indicates that a significant 39.5% of this portfolio is concentrated in just two S&P 500 dividend-paying stocks: Apple and American Express. Among these, Apple represents Berkshire’s largest investment, comprising 24.2% of its overall stock assets.
This technology powerhouse has showcased remarkable performance, leading the smartphone segment and excelling in diverse areas such as software, services, and wearable technology. Apple currently offers a modest dividend yield of approximately 0.4%, translating to an annual income of $300 million for Berkshire based on its holdings of 300 million shares. Nevertheless, Buffett has made the decision to divest a substantial amount of Apple stock, cutting this position down by almost 70% compared to last year.
In the ranking of Buffett’s largest positions, American Express comes in second, representing 15.3% of the portfolio. Buffett has been a shareholder since 1995 and has held onto every share without selling any. Berkshire owns a 21.5% stake in American Express.
This financial services firm occupies a distinctive niche, catering to affluent consumers, imposing annual fees, and operating as its own banking entity. This structure enables American Express to provide robust rewards programs and leverage multiple revenue channels.
Buffett’s principal S&P 500 investments
The stock offers a yield of 0.9% and boasts a 25-year record of consistent dividend payouts. Buffett’s focus on these two companies aligns with his preference for high-caliber businesses that yield steady returns and offer dependable dividends. While he doesn’t always pursue the highest yields, he emphasizes the importance of stability and proven performance.
American Express, in particular, has demonstrated exceptional gains in Buffett’s collection, with a 58% surge recorded in 2024 to date. The firm capitalizes on its strong brand recognition, pricing power, and the advantages of network effects. Over the past decade, it has consistently increased revenue and earnings.
Even with the rise in stock valuations, investors who prioritize quality could still find it appealing. In addition to Apple and American Express, Buffett’s portfolio includes numerous other prominent dividend stocks that may attract passive income seekers. These are reputable companies like Coca-Cola, Chevron, Kraft Heinz, Verizon, Bank of America, Procter & Gamble, Johnson & Johnson, and Moody’s.
Each of these organizations boasts a robust and sustainable business framework along with a history of delivering shareholder value through steady dividends. By analyzing Buffett’s dividend stock choices, individual investors may glean valuable insights into constructing a reliable passive income stream. However, it is crucial to perform personal due diligence to ensure that any investment aligns with one’s financial objectives and risk appetite.
