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Tags: warren buffett | dividend stocks | bank of america | chevron | kraft-heinz

Bob Ciura: 3 Warren Buffett Stocks for Dividend Investors

Bob Ciura: 3 Warren Buffett Stocks for Dividend Investors
Bill Gates and Warren Buffett speak at Columbia Business School in New York. (Getty Images / 2017 file photo)

Bob Ciura By Thursday, 21 July 2022 12:38 PM EDT Current | Bio | Archive

The consumer price index rose 9.1% in June compared with the same month last year. This means inflation is rising at the fastest pace since December 1981. And with the Federal Reserve likely to respond aggressively with continued rate hikes, it is possible the U.S. economy will tip into recession.

Investors looking to prepare for a recession should focus on quality companies with competitive advantages, and above-average dividends.

Investors can look to none other than the Oracle of Omaha himself, Warren Buffett, for quality dividend stocks.

This article will discuss three Warren Buffett stocks that have strong dividends and long-term growth potential.

Warren Buffett Stock: Bank of America (BAC)

As of March 31, 2022, Buffett’s Berkshire Hathaway owned just over 1.01 billion shares of Bank of America (BAC) for a market value exceeding $32.6 billion.

Bank of America is one of the largest financial institutions in the United States, with more than $3.2 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking, and global markets. Bank of America’s consumer-facing business lines includes its branch and deposit-gathering operations, home mortgage lending, vehicle lending, credit and debit cards, and small-business services.

Bank of America is off to a strong start to 2022. In the first quarter, revenue increased 1.7% to $23.2 billion, while earnings-per-share of $0.80 declined 7% year-over-year. Average loan and lease balances were up $70 billion, or 8%, to $978 billion, led by strong commercial loan growth and higher consumer balances.

Bank of America competes with the largest banks in the U.S. The company is a leader in online banking, with tens of millions of active digital banking users and strong growth rates across its digital payments solutions. It also has advantages of scale given its massive branch footprint, digital presence, and balance sheet that puts it among the largest banks in the world.

The stock has a 2.7% dividend yield. With a dividend payout ratio of 25% expected for 2022, the dividend appears highly secure.

Warren Buffett Stock: Chevron Corporation (CVX)

As of March 31st, 2022, Buffett’s Berkshire Hathaway owned just over 159 million shares of the Chevron Corporation (CVX) for a market value of nearly $26 billion. Chevron Corp. represents about 7% of Berkshire Hathaway’s investment portfolio.

Chevron is the third-largest oil major in the world, behind only Saudi Aramco and ExxonMobil (XOM).

Chevron engages in upstream oil and gas production, as well as downstream refining businesses.

Chevron is a major beneficiary of inflation, which has caused global oil prices to spike. In the first quarter, Chevron’s adjusted earnings-per-share increased 31%. U.S. oil and gas production rose by 10% over the first quarter of 2021.

Chevron’s competitive advantage in the highly cyclical energy sector comes primarily from its size and financial strength. The company’s operational expertise allowed it to successfully navigate the 2020 coronavirus pandemic with its dividend growth streak intact. Chevron has increased its dividend for over 30 consecutive years. Shares currently yield 4%.

Warren Buffett Stock: Kraft-Heinz (KHC)

Buffett’s Berkshire Hathaway owns just over 325.6 million shares of The Kraft Heinz Company (KHC) for a total market value exceeding $12.58 billion. Kraft-Heinz is a processed food and beverages company with a large product portfolio that includes food products such as condiments, sauces, cheese and dairy, frozen and chilled meals, and infant diet and nutrition.

The company’s well-known brands are Heinz ketchup, Mayo, Lunchable, Oscar Mayer, Jell-o, and Kool-Aid. For the first quarter, total sales were down 5.5% compared to the first quarter of 2021. Total sales were $6,045 million compared to 1Q2021 of $6,394 million. However, year-over-year organic net sales growth was 6.8% for the quarter versus the first quarter of 2021.

Net income for the quarter was up substantially. The company reported a profit of $781 million compared to a profit of $568 million in the same quarter last year. Earnings per share increased 30% for the quarter.

Shares of Kraft Heinz stock currently yield 4.1%. With a payout ratio of 60%, the dividend appears well-covered.
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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.

© 2022 Newsmax Finance. All rights reserved.


BobCiura
The consumer price index rose 9.1% in June compared with the same month last year. This means inflation is rising at the fastest pace since December 1981.
warren buffett, dividend stocks, bank of america, chevron, kraft-heinz
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2022-38-21
Thursday, 21 July 2022 12:38 PM
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