Berkshire Hathaway (BRK.B) Chairman and CEO Warren Buffett needs no introduction to the world of investors. Widely regarded as the foremost advocate of value investing, the so-called “Oracle of Omaha” has amassed a legion of followers across the globe due to his successful investing journey of roughly six decades.
Along with his penchant for value investing, Buffett is known for being a great fan of companies that engage in regular share buybacks and hefty dividend payouts. With this in mind, we have compiled a list of 5 stocks from the Berkshire equity portfolio that offer dependable dividend yields - plus, decent upside potential from current levels, according to Wall Street analysts.
Buffett Stock #1: Jefferies Financial Group
Founded in 1968 in New York City, Jefferies Financial Group (JEF) is one of the world's leading full-service investment banking and capital markets firms. They offer various services, including investment banking, equities, fixed income, asset management and wealth management. Its market cap currently stands at $8.7 billion.
In 2024 so far, JEF stock is up 1.6%. Its dividend yield of 2.92% is backed by seven years of growth, and earnings are expected to rise substantially this fiscal year and the next. Most recently, Jefferies topped expectations with its fiscal Q4 results in early January.
Overall, analysts have an average rating of “Moderate Buy” for JEF stock, with a mean target price of $48.50, which implies an upside potential of about 18% from current levels. Out of only 3 analysts covering the stock, 2 have a “Strong Buy” rating and 1 has a “Hold” rating.
Buffett Stock #2: Chevron Corp
Incorporated in 1906, Chevron Corp (CVX) is one of the biggest integrated oil and gas players globally. It is involved in all aspects of the industry, from exploration and production to refining and marketing. Chevron also manufactures and sells chemicals derived from oil (CLH24) and gas (NGH24). The energy giant commands a market cap of $291.9 billion.
CVX has gained 3.5% on a YTD basis, and its dividend yield of 4.22% tops the energy sector median of 3.83%. Moreover, with 36 consecutive years of dividend growth, Chevron is one of the S&P 500 Index ($SPX) components counted among the elite “Dividend Aristocrats” club.
Analysts have rated Chevron stock a “Moderate Buy” overall, with a mean target price of $178.37. This indicates an upside potential of about 15.6% from current levels. Out of 19 analysts covering the stock, 11 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, and 6 have a “Hold” rating.
Buffett Stock #3: Coca-Cola Company
Founded in Atlanta in 1886, Coca-Cola Company (KO) has gone on to become one of the most iconic and recognizable beverage brands in the world. It manufactures and distributes carbonated soft drinks, fruit juices, bottled water, sports drinks, energy drinks, coffee, and tea. Some of its most popular brands include Coca-Cola, Fanta, Sprite, Dasani, Minute Maid, Powerade, Monster Energy, Costa Coffee, and Fuze Tea. KO currently commands a mammoth market cap of $256.76 billion.
KO is up 2.8% on a YTD basis, though the shares are down about 7% from their 52-week high of $64.99.
Coca-Cola is a “Dividend King,” meaning the company has raised its dividend each year for 50 or more consecutive years - 61 years, to be precise. KO just recently hiked its dividend again, to $0.485 per share each quarter, and the stock now yields 3.27% - well above the sector median of 2.74%.
Overall, analysts have a consensus rating of “Strong Buy” on KO stock, with a mean target price of $66.07 - which indicates an upside potential of about 9% from current levels. Out of 16 analysts covering the stock, 11 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 4 have a “Hold” rating.
Buffett Stock #4: Occidental Petroleum
Shifting from a classic Buffett favorite to a more recent pick, Occidental Petroleum (OXY) is an integrated energy company involved in locating and extracting oil and natural gas resources globally, with significant operations in the Permian Basin, North Sea, and Middle East. It also manufactures and sells basic chemicals and vinyls, primarily through its subsidiary OxyChem. Its market cap currently stands at $53.2 billion.
OXY stock is fractionally lower so far in 2024, and its dividend yield of 1.45% is relatively modest. However, with a low payout ratio of just 19.51% and a solid cash position, Occidental should be able to sustainably grow this dividend in the years to come.
Overall, analysts have deemed the stock a “Moderate Buy,” with a mean target price of $68.47. This denotes an upside potential of roughly 15.6% from current levels. Out of 19 analysts covering the stock, 7 have a “Strong Buy” rating, 11 have a “Hold” rating, and 1 has a “Strong Sell” rating.
Buffett Stock #5: Visa
Founded in 1958, Visa (V) is a global payments technology company that connects consumers, businesses, financial institutions, and governments in over 200 countries and territories. It processes over 200 billion transactions annually, with a global network of over 80 million merchants. Visa's market cap currently stands at a gigantic $511.6 billion.
Visa stock is up an impressive 5.6% on a YTD basis, outpacing the broader S&P 500. Although the credit card giant's dividend yield of 0.75% trails the sector median of 3.47%, it's worth pointing out that Visa's growth is also projected to outpace its financial industry peers going forward.
Plus, the company has been raising its dividends consistently for the past 15 years, maintains a low payout ratio of 21.58%, and has a dominant cash position to support its shareholder payouts.
Analysts have an overall rating of “Strong Buy” for Visa, with a mean target price of $293.46. This denotes an upside potential of roughly 6.8% from current levels. Out of 26 analysts covering the stock, 19 have a “Strong Buy” rating, 4 have a “Moderate Buy” rating, and 3 have a “Hold” rating.
