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The Smartest Dividend Stocks in Warren Buffett's Portfolio to Buy With $5,000 Right Now
KOCoca-Cola(KO) The Motley Fool·2025-05-03 08:49

Group 1: Berkshire Hathaway's Investment Strategy - Berkshire Hathaway has a massive equities portfolio valued at nearly 277billion,focusingoncompaniesthatbuybackstockandpaydividends,providingcapitaltoshareholderswithoutrelyingheavilyonstockpricefluctuations[1]−WarrenBuffett′sinvestmentphilosophyincludesselectingreliabledividendstocks,whichcanalsobenefitretailinvestors[2]Group2:SiriusXM−SiriusXMhasadividendyieldof5277 billion, focusing on companies that buy back stock and pay dividends, providing capital to shareholders without relying heavily on stock price fluctuations [1] - Warren Buffett's investment philosophy includes selecting reliable dividend stocks, which can also benefit retail investors [2] Group 2: Sirius XM - Sirius XM has a dividend yield of 5% and is down about 2% in 2024, outperforming the broader market, with Berkshire Hathaway increasing its stake in anticipation of a turnaround [3][4] - The company aims to add 10 million subscribers to reach approximately 50 million and grow free cash flow by 50% to about 1.8 billion through new pricing options and expanded offerings [4] - Despite a reported loss in 2024 due to a non-cash impairment charge, the dividend payments consumed only about 36% of earnings in 2023, with a free cash flow yield of close to 13% [5] Group 3: Coca-Cola - Coca-Cola has a dividend yield of 2.8% and constitutes about 10.5% of Berkshire's total holdings, being a long-term favorite of Buffett [6] - The company has shown strong performance, with a nearly 17% increase in stock value this year and positive earnings surprises in recent quarters [7] - Coca-Cola has raised its annual dividend for 63 consecutive years and has returned over 93billiontoshareholderssince2010,withaprojectedfreecashflowofabout93 billion to shareholders since 2010, with a projected free cash flow of about 9.5 billion in 2025 [8]