11 Best Dividend Stocks To Buy According To Warren Buffett

In this article, we discuss the 11 best dividend stocks to buy according to Warren Buffett. You can skip our detailed analysis of Buffett’s hedge fund and his investment philosophy and go directly to read the 5 Best Dividend Stocks To Buy According To Warren Buffett.

Warren Buffett is an American businessman, investor, and CEO of Berkshire Hathaway. He is known as the most successful investor of all time. Buffett is the sixth richest man in the world as his net worth stands at $103.1 billion, as of October 2021.

Some of the most notable dividend stocks in his portfolio include Chevron Corporation (NYSE:CVX), Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), Bristol-Myers Squibb Company (NYSE:BMY), and AbbVie Inc. (NYSE:ABBV).

Our Methodology:

Let’s analyze our list of the best dividend stocks to buy according to Warren Buffett. We chose stocks with the highest dividend yields in Berkshire Hathaway’s 13F portfolio as of Q2 2021.

11 Best Dividend Stocks To Buy According To Warren Buffett

Warren Buffett

Why it is important to pay attention to hedge funds’ stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

11 Best Dividend Stocks To Buy According To Warren Buffett

11. Johnson & Johnson (NYSE:JNJ)

Berkshire Hathaway’s Stake Value: $53,886,000

Percent of Berkshire Hathaway’s 13F Portfolio: 0.01%

Number of Hedge Fund Holders: 88

Dividend Yield: 2.63%

Johnson & Johnson (NYSE:JNJ) ranks eleventh on our list of the best dividend stocks to buy according to Warren Buffett. It is a holding company that is involved in the research and development of pharmaceutical products. Along with this, the company also deals in consumer retail and medical devices.

In Q2 2021, Berkshire Hathaway did not make any changes to its stake in Johnson & Johnson (NYSE:JNJ) and owns 327,100 shares in the company, worth $53.8 million.

Of the 873 hedge funds tracked by Insider Monkey, 88 hedge funds have positions in Johnson & Johnson (NYSE:JNJ) in Q2 2021, up from 81 in the previous quarter. These stakes are valued at over $7 billion. Fundsmith LLP is the company’s leading shareholder, with shares worth $1.1 billion.

Like Chevron Corporation (NYSE:CVX), The Coca-Cola Company (NYSE:KO), Bristol-Myers Squibb Company (NYSE:BMY), and AbbVie Inc. (NYSE:ABBV), Johnson & Johnson (NYSE:JNJ) is one of the most notable stocks in 2021.

Distillate Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter. Here is what the firm has to say:

“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”

10. U.S. Bancorp (NYSE:USB)

Berkshire Hathaway’s Stake Value: $7,342,802,000

Percent of Berkshire Hathaway’s 13F Portfolio: 2.5%

Number of Hedge Fund Holders: 41

Dividend Yield: 2.97%

U.S. Bancorp (NYSE:USB) is an American bank holding company and is the parent company of the U.S. Bank National Association. The company ranks tenth on our list of the best dividend stocks to buy according to Warren Buffett.

As of Q2 2021, Berkshire Hathaway owns approximately 129 million shares in U.S. Bancorp (NYSE:USB), worth $7.34 billion. The company accounts for 2.5% of the hedge fund’s 13F portfolio. Recently, U.S. Bancorp (NYSE:USB) launched its cryptocurrency custody services to its global institutional investment managers with private funds in the U.S. The company has increased its dividend by 44.8% in the past three years.

9. The Coca-Cola Company (NYSE:KO)

Berkshire Hathaway’s Stake Value: $21,644,001,000

Percent of Berkshire Hathaway’s 13F Portfolio: 7.38%

Number of Hedge Fund Holders: 62

Dividend Yield: 3.11%

In Q2 2021, Berkshire Hathaway did not make any changes to its stake in The Coca-Cola Company (NYSE:KO) and owns 400 million shares in the company, valued at over $21.6 billion. The company constitutes 7.38% of the hedge fund’s 13F portfolio.

Of the 873 hedge funds tracked by Insider Monkey, 62 hedge funds have positions in The Coca-Cola Company (NYSE:KO) in Q2 2021, up from 61 in the previous quarter. The total value of these stakes is $24.9 billion.

Like Chevron Corporation (NYSE:CVX), Bristol-Myers Squibb Company (NYSE:BMY), AbbVie Inc. (NYSE:ABBV), and Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO) is one of the most notable dividend stocks in Buffett’s portfolio as of Q2.

8. Merck & Co., Inc. (NYSE:MRK)

Berkshire Hathaway’s Stake Value: $712,155,000

Percent of Berkshire Hathaway’s 13F Portfolio: 0.24%

Number of Hedge Fund Holders: 79

Dividend Yield: 3.19%

Merck & Co., Inc. (NYSE:MRK) is an American pharmaceutical company that deals in biologics, medicines, vaccines, and other consumer products. The company stands eighth on our list of the best dividend stocks to buy according to Warren Buffett.

On October 1, Citigroup lifted its price target on Merck & Co., Inc. (NYSE:MRK) to $105, while keeping a ‘Buy’ rating on the shares. Since the beginning of the year, the stock delivered a 4.85% return to shareholders, while its 12-month returns came in at 5.48%.

As of Q2 2021, 79 hedge funds tracked by Insider Monkey have positions in Merck & Co., Inc. (NYSE:MRK), the same as in the last quarter. The total value of these stakes is $5.2 billion. Kahn Brothers is the company’s leading shareholder, with shares worth $55.7 billion.

Like Chevron Corporation (NYSE:CVX), Bristol-Myers Squibb Company (NYSE:BMY), AbbVie Inc. (NYSE:ABBV), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO), Merck & Co., Inc. (NYSE:MRK) is also gaining investors’ attention as a dividend stock.

Artisan Partners mentioned Merck & Co., Inc. (NYSE:MRK) in its Q1 2021 investor letter. Here is what the firm has to say:

“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”

7. Bristol-Myers Squibb Company (NYSE:BMY)

Berkshire Hathaway’s Stake Value: $1,756,983,000

Percent of Berkshire Hathaway’s 13F Portfolio: 0.59%

Number of Hedge Fund Holders: 73

Dividend Yield: 3.35%

Bristol-Myers Squibb Company (NYSE:BMY) stands seventh on our list of the best dividend stocks to buy according to Warren Buffet. It is an American multinational pharmaceutical company that specializes in the development and marketing of medicines for patients with serious diseases.

As of Q2 2021, Berkshire Hathaway owns 26.2 million shares in Bristol-Myers Squibb Company (NYSE:BMY), valued at $1.75 billion. The company represents 0.59% of the hedge fund’s 13F portfolio. Recently, Morgan Stanley lifted its price target on Bristol-Myers Squibb Company (NYSE:BMY) to $71, while keeping an ‘Equal Weight’ rating on the shares. On September 9, the company’s board announced its quarterly dividend of $0.49 per share, offering an annualized yield of 3.35%.

Like Chevron Corporation (NYSE:CVX), AbbVie Inc. (NYSE:ABBV), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO), analysts and investors are also paying attention to Bristol-Myers Squibb Company (NYSE:BMY) in 2021.

6. Organon & Co. (NYSE:OGN)

Berkshire Hathaway’s Stake Value: $46,918,000

Percent of Berkshire Hathaway’s 13F Portfolio: 0.01%

Number of Hedge Fund Holders: 44

Dividend Yield: 3.43%

Organon & Co. (NYSE:OGN) is a global pharmaceutical company that develops and delivers innovative health solutions, medicines, and related products across a range of therapeutic areas. The company stands sixth on our list of the best dividend stocks to buy according to Warren Buffett.

Organon & Co. (NYSE:OGN) is one of the newest acquisitions of Berkshire Hathaway, as the fund started building its position in the company in Q2 2021. The fund owns over 1.5 million shares in the company, valued at $46.9 million.

Of the 873 hedge funds tracked by Insider Monkey, 44 hedge funds have positions in Organon & Co. (NYSE:OGN) in Q2, valued at $427.8 million. There were no hedge fund positions in the company in the previous quarter.

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