Warren Buffett is a taker, not a giver. At least that’s the case when it comes to dividends.
The legendary investor has never been supportive of having Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) pay dividends. However, Buffett seems to love receiving dividends. Berkshire’s portfolio is loaded with dividend stocks.
Some of those stocks contribute a lot of money to the giant conglomerate’s coffers. These three dividend stocks alone will make Buffett’s Berkshire Hathaway a whopping $2.6 billion this year.
Chevron (NYSE: CVX) has vaulted into Berkshire’s top four holdings. Buffett continued to scoop up shares of the oil and gas giant in the first quarter of 2022. Berkshire now owns more than 159 million Chevron shares.
This significant stake translates to a hefty amount of dividend income. Chevron’s dividends this year should total $5.68 per share. At that level, Berkshire stands to make in the ballpark of $904 million in dividends in 2022 from this one stock.
But Buffett and Berkshire will probably profit a lot more from Chevron. The stock is already up around 25% year to date. It had soared even higher before President Biden publicly rebuked several large oil companies, including Chevron, for what he called their excessive profits.
Chevron should continue to prosper with fuel prices likely to remain at high levels for a while. We’ll have to wait and see, though, if Buffett will hold onto the stock once the global energy market settles down.
2. Bank of America
Bank of America (NYSE: BAC) has long been one of Buffett’s favorite bank stocks. Berkshire owns more than 1 billion shares of the financial services company. BofA ranks as the No. 2 position in Berkshire’s portfolio.
In 2022, Bank of America is expected to pay out dividends per share totaling $0.84. That might not seem like much at first glance. But when you own as many shares as Berkshire does, it adds up to nearly $868 million in dividend income.
This amount might not be enough to offset the decline in BofA’s share price, though. The stock has plunged close to 30% so far this year.
However, Buffett has a long-term perspective. He knows that Bank of America has a solid underlying business that’s built to last. And while the multibillionaire isn’t a big fan of Wall Street analysts, he’d probably agree with them that Bank of America has tremendous upside potential.
Buffett likes Apple (NASDAQ: AAPL) so much that he refers to the technology company as one of Berkshire’s “four giants”. Apple is the only one of those giants that Berkshire doesn’t wholly own. But it’s by far Berkshire’s biggest holding.
Apple isn’t known for its dividend. That’s understandable with the company’s paltry dividend yield of 0.71%.
However, the $0.92 per share in dividends that Apple pays times Berkshire’s more than 911 million shares equals more than $838 million in dividend income. Combining this amount with the dividends Berkshire will receive from Chevron and Bank of America this year brings the total to more than $2.6 billion.
Apple’s year-to-date stock performance isn’t anything to get excited about. But the company has plenty of long-term growth drivers, notably including its moves into augmented reality. Look for Buffett and Berkshire to make a lot more dividend income from Apple over the coming years.
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 (B shares). The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.