Morningstar

2 Warren Buffett Stocks to Consider With Big Yields

These dividend stocks in Berkshire Hathaway’s portfolio may appeal to income investors today.

2 Warren Buffett Stocks to Consider With Big Yields
Securities in This Article
Chevron Corp
(CVX)
Berkshire Hathaway Inc Class A
(BRK.A)
Berkshire Hathaway Inc Class B
(BRK.B)
The Kraft Heinz Co
(KHC)

Susan Dziubinski: I’m Susan Dziubinski with Morningstar. Warren Buffett’s Berkshire Hathaway BRK.A BRK.B doesn’t intentionally buy dividend stocks. But Buffett and his team favor financially strong companies with significant competitive advantages, run by managers who thoughtfully allocate capital, and as a result, Berkshire Hathaway naturally owns many dividend-paying stocks.

Today, we’re looking at two stocks in Berkshire Hathaway’s portfolio with trailing yields that are well above the markets. These dividend stocks may be attractive ideas to pursue for income investors.

2 Warren Buffett Stocks to Consider with Big Yields

  1. Chevron CVX
  2. Kraft Heinz KHC

The first Warren Buffett stock with a big yield is Chevron CVX. Morningstar assigns the oil giant a narrow economic moat rating because we expect the firm to be able to deliver excess returns on invested capital over the next decade through a combination of an improved cost structure and the addition of higher return production volumes. Management has done an exceptional job of allocating capital, and we think there’s room to grow the dividend. We think Chevron’s stock is worth $155 per share.

Read Morningstar’s full report on Chevron.

The second Warren Buffett stock with an attractive yield is Kraft Heinz KHC. Berkshire Hathaway owns more than 26% of Kraft Heinz’s stock. This packaged foods manufacturer has carved out a narrow economic moat with its portfolio of familiar names that include its namesake brands, along with Oscar Mayer, Philadelphia, and others. The company has revamped its road map and is now focused on consistently driving profitable growth. And we forecast mid-single-digit annual increases in the dividend. We think Kraft Heinz stock is worth $51 per share.

Read Morningstar’s full report on Kraft Heinz.

For more stock ideas, listen to The Morning Filter each week, wherever you get your podcasts. And be sure to visit Morningstar.com, too.

Morningstar directors Allen Good and Erin Lash provided the research behind this segment.

Watch 3 Companies to Invest in Benefiting From Multiple Growth Trends for more from Susan Dziubinski.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

Sponsor Center