The late Senator Everett Dirksen once reportedly said, “You’re talking real money here, a billion, a billion, and very quickly.” With that quote in mind, Warren Buffett’s dividend income will be real money.
Technically speaking, the dividend income will belong Berkshire Hathaway. But for many, Buffett and Berkshire are practically synonymous. And they could earn over $3 billion in dividend income in 2025 from those five stocks.
Buffett seems to have broken out somewhat Bank of America(NYSE: BAC). He significantly reduced Berkshire’s stake in Big Bank last year. However, Bank of America ( BOFA ) still contributes a lot of money to the conglomerate’s coffers.
As of September 30, 2024, Berkshire owned 766,305,462 shares of BofA. On the other hand, a dividend of $1.04 means almost $797 million in dividend income this year. Of course, if Buffett sells more of this stock, the amount of dividends received will be less.
The Coca-Cola Company(NYSE: KO) is one of Buffett’s “forever stocks.” He has held it the longest of any other stock in Berkshire’s portfolio. In his 2022 letter to Berkshire Hathaway shareholders, Buffett 704 USD million. “That total amount should be even higher this year.
Berkshire has long owned 400 million shares of Coca-Cola. Coke pays a forward dividend of $1.94. If Buffett doesn’t sell any shares (which seems a safe assumption), Berkshire will receive at least $776 million in dividend income from the Big Food and Beverage company this year. The amount, however, will be higher. It’s Coca-Cola Dividend King with 62 consecutive years of dividend increases. I fully expect the company to continue that streak in 2025.
Chevron(NYSE: CVX) is a more recent addition to Berkshire’s portfolio. Buffett launched a stake in the giant oil and gas producer in 2020 when its shares were battered by the impact of the Covid-19 pandemic.
Berkshire owned 118,610,534 shares of Chevron at the end of 2024Q3, with the company’s dividend of $6.52, the conglomerate should earn at least $773.3 million in dividend income this year. However, again, the actual total is likely to be higher. Chevron has increased its dividend for 37 consecutive years and may increase its payout soon.
Buffett wrote to Berkshire Hathaway shareholders last year American Express(NYSE: AXP) “Almost certain” to increase its dividends in 2024 by about 16%. He was close. Amex increased its dividend payout by nearly 17%.
The legendary investor also wrote that Berkshire “is certain to leave our holdings untouched throughout the year.” I assume that they will do it in 2025 as well. If so, Berkshire’s 151,610,700 American Express shares with the financial services company’s $2.80 dividend totaled at least $424.5 million in dividend income this year.
Apple(NASDAQ: AAPL) Isn’t the apple of Buffett’s eye what it used to be. Its position among the consumer tech giants is now much lower than it was a few years ago. However, Apple remains Berkshire’s largest holding. It is also an important source of dividend income.
The math with an apple is simple. Berkshire owned 300 million shares as of September 30, 2024 with a dividend of $1 per share, which means $300 million in dividend income for Buffett and his company in 2025. That amount will change if Apple increases its dividend (which is likely ) or Buffett sells more shares (which could happen).
The expected dividend income for Buffett and Berkshire from those five stocks in 2025 is $3.07 billion. What is the best choice for income investors?
I think non-billionaire income investors will find several of Buffett’s main income producers attractive types. Coca-Cola offers a particularly impressive dividend track record, along with a solid forward dividend yield of 3.14%.
However, my vote goes to Chevron as the best stock of the five for income investors. The oil and gas company has the highest dividend yield in the group (4.17%). It has also reliably increased its dividend.
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Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Keith Speights He has positions in Apple, Berkshire Hathaway and Chevron. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway and Chevron. The Motley Fool has disclosure rules.
