6 Cheap Dividend Stocks To Buy And Hold Forever

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 |  Includes: COP, INTC, JNJ, KO, MDLZ, SNY
by: Hawkinvest

After a major market correction in recent months, there is a lot of opportunity to buy stock in solid companies, at great prices for most long-term investors. The volatility is great for traders who are able to watch the markets constantly and buy or sell quickly. However, some of the most successful and richest investors of all time are the buy and hold types.

For example, Warren Buffett of Berkshire Hathaway is a classic buy-cheap-and-hold-"forever" type. Mr. Buffett is a legendary value investor who has made fortunes in the stock market for himself and his Berkshire Hathaway (NYSE:BRK.A) shareholders.

Because of his ability to buy stocks that usually pay off over time, it makes sense to watch and consider the stocks he owns or is buying now. These are the kind of investments that allow investors to have peace of mind, income and some stability, while also offering solid potential for long-term capital appreciation.

Here's a closer look at 6 top stock picks that Warren Buffett's Berkshire Hathaway has major investments in:

Intel Corporation (NASDAQ:INTC) is a leading maker of chips used in notebooks, netbooks, desktops, mobile phones, consumer electronics devices, etc. This company has a rock solid balance sheet, sells for only about 9 times earnings and pays a dividend that beats most bonds and other income investments. According to recent filings, Buffett of Berkshire Hathaway started a new position of about 9.3 million shares in Intel. Intel shares were recently hit after the company warned that the flooding in Thailand would impact the 4th quarter. This gives investors a chance to buy cheap on this dip.

Here are some key points for INTC:

  • Current share price: $24
  • The 52 week range is $19.16 to $25.78
  • Earnings estimates for 2011: $2.45 per share
  • Earnings estimates for 2012: $2.56 per share
  • Annual dividend: 84 cents per share which yields 3.3%

Kraft Foods, Inc. (KFT) is a leading maker of snacks, candy, juices, and many other food products worldwide. This company owns many well-known brands such as Oscar Mayer, Maxwell House, Trident, Dentyne, Hollywood, Halls, Jacobs, Nabisco, Oreo, LU and others. Food companies have strong pricing power in times of inflation and food products are always in demand. According to recent filings, Berkshire owns just over 99.4 million shares, which is a stake of about $3.5 billion. This stock has been strong recently, so buying on dips to around $34 continues to make sense.

Here are some key points for KFT:

  • Current share price: $36.42
  • The 52 week range is $30.21 to $36.90
  • Earnings estimates for 2011: $2.27 per share
  • Earnings estimates for 2012: $2.53 per share
  • Annual dividend: $1.16 per share which yields 3.2%

The Coca-Cola Company (NYSE:KO) is one of the most famous brands, and this company owns many other well-known brands such as Sprite, Vitamin Water, Minute Maid, Dasani, and more. Investors know that the products Coca Cola sells will do well even if the economy does not, and the stock pays a solid dividend. According to recent filings, Berkshire owns about 200 million shares, which is a stake of about $13.6 billion. I would try to buy this stock on dips to about $64.50.

Here are some key points for KO:

  • Current share price: $66.89
  • The 52 week range is $61.29 to $71.77
  • Earnings estimates for 2011: $3.83 per share
  • Earnings estimates for 2012: $4.16 per share
  • Annual dividend: $1.88 per share which yields 2.8%

Johnson & Johnson (NYSE:JNJ) is a global maker of health care and medical products. This company owns well-known brands such as Listerine, Motrin, Band-aid, Reach, Splenda, Tylenol, Lubriderm, Sudafed and many more. These types of products remain in high demand regardless of the global economic situation and the dividend pays you to wait for better times and stock valuations. This stock has dropped with the market recently and is giving long-term investors a solid value now. According to recent filings, Berkshire owns just over 42.6 millionshares, which is a stake of about $2.76 billion.

Here are some key points for JNJ:

  • Current share price: $63.51
  • The 52 week range is $57.50 to $68.05
  • Earnings estimates for 2011: $4.97
  • Earnings estimates for 2012: $5.24
  • Annual dividend: $2.28 per share which yields 3.5%

ConocoPhillips (NYSE:COP) is one of the largest integrated oil and gas companies. This company is involved in exploration, production, processing, and transportation of various energy products and fuels. This company has extensive oil and gas reserves which will increase in value as energy prices rise. According to recent filings, Berkshire owns just over 29 million shares, which is a stake of about $2 billion.

Here are some key points for COP:

  • Current share price: $70.48
  • The 52 week range is $58.65 to $81.80
  • Earnings estimates for 2011: $8.67 per share
  • Earnings estimates for 2012: $8.38 per share
  • Annual dividend: $2.64 per share which yields 3.6%

Sanofi-Aventis (NYSE:SNY) is a French pharmaceutical giant and now trades for about 7 times earnings and offers a dividend yield of over 4%. Earlier this year, these shares traded regularly for $37 to $40, so there is upside while you collect the dividends. According to recent filings, Berkshire owns just over 4 million shares, which is a stake of about $143 million. I would look to buy this stock around $33.

Here are some key points for SNY:

  • Current share price: $34.84
  • The 52 week range is $30.98 to $40.75
  • Earnings estimates for 2011: $4.58 per share
  • Earnings estimates for 2012: $4.03 per share
  • Annual dividend: about $1.32 per share which yields about 3.8%

Data is sourced from Yahoo Finance.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is forinformational purposes only. You should always consult a financial advisor.