What do dividend investors like almost as much as high yields? Consistency. They prefer stocks that regularly pay dividends quarter after quarter with no drama.
You might not think of Warren Buffett as a dividend investor. Most of the stocks owned by Berkshire Hathaway (BRK.A -0.88%) (BRK.B -0.83%), though, do pay dividends. In fact, nearly $212 billion of Buffett’s portfolio is invested in these three super-reliable dividend stocks.
1. Apple
Apple (AAPL -1.47%) ranks as Buffett’s favorite stock other than Berkshire itself. The conglomerate’s stake in the tech giant currently stands at nearly $161.8 billion, making Apple the biggest position in the stock portfolio by far.
Sure, Apple’s dividend yield of 0.55% isn’t anything to get overly excited about. But what it lacks in yield, it makes up for in dividend growth. Apple has increased its payouts by more than 150% since it initiated its dividend program in 2012.
There’s also no question about Apple’s ability to keep the dividends flowing and growing. It generated operating cash flow of $26 billion in the fiscal quarter ending July 1 — a staggering amount.
Of course, there are plenty of other things to like about Apple aside from its dividend. The company’s services business continues to grow. Apple also has new products on the way, notably including its Vision Pro mixed-reality headset, which CEO Tim Cook says will begin “a new era for computing.”
2. Bank of America
Berkshire is the single largest shareholder of Bank of America (BAC -2.41%). Its 13% stake in the big bank is worth nearly $28.3 billion right now, enough to make the stock Berkshire’s second-biggest position after Apple.
Bank of America had to slash its dividend during the financial crisis of 2007 to 2009. Since then, though, the company has boosted it by more than 20 times. Its dividend yield currently tops 3.5%.
One reason why Bank of America’s dividend yield is so high now is that its stock has fallen sharply this year. The regional banking crisis and a host of macroeconomic headwinds have taken their toll on its share price.
However, Bank of America remains strong financially and can easily cover its dividend. This share price pullback won’t last indefinitely, either. This Buffett dividend stock is likely to rebound in a major way in the not-too-distant future.
3. Coca-Cola
Berkshire Hathaway has owned shares of Coca-Cola (KO 0.41%) for longer than it has held any other company currently in its portfolio. The conglomerate’s stake in it is valued at close to $21.7 billion, making it Buffett’s fourth-largest position.
Coca-Cola pays an attractive dividend yield of 3.4%. Even more impressive, though, is the company’s dividend track record. It’s a Dividend King with 61 consecutive years of payout increases.
The keys to its ability to keep that streak going are generating solid earnings and cash flow. Coca-Cola continues to do both. Its earnings per share soared 34% year over year in the second quarter of 2023. Operating cash flow increased by $83 million to $4.6 billion.
While Coca-Cola stock has been a huge winner in the past, it probably won’t deliver jaw-dropping gains from here. However, its resilient business and solid dividend make it a good pick, especially for conservative investors with a long-term perspective.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Keith Speights has positions in Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.