Dogs Of Berkshire Hathaway Chase One Dividend Buy For April

Apr. 25, 2022 6:20 PM ETBAC, BK, CVX, KHC, KO, MA, RPRX, STOR, UPS, USB, V, VZ, WFC, ABBV, BMY1 Comment8 Likes

Summary

  • This Buffett holdings list from Kiplinger first appeared 2/14/22 online. YCharts and Dogs of The Dow also track this Buffett/Berkshire batch. Here is your update from 4/21/22 YCharts data.
  • 28 of 44 current Berkshire-Hathaway-owned-stocks pay dividends. As of 4/21/22, the top-ten ranged 2.7%-5.18% by annual-yield and ranged 40.63%-107.17% per broker-estimated price-target-upsides.
  • Analyst top-ten net-gain estimates for Berkshire's April dividend dogs ranged 18.96%-32.5% from VZ, STOR, RPRX, MA, USB, UPS, V, BK, WFC, and top pick, BAC per YCharts data.
  • $5k invested in the lowest-priced five top-yield Buffett/Berkshire-held April dividend dogs showed 29.03% more net-gain than from $5k invested in all ten. Little (low-priced) Buffett-collected dogs dominated Berkshire's April dividend payers.
  • Looking for a portfolio of ideas like this one? Members of The Dividend Dog Catcher get exclusive access to our model portfolio. Learn More »

Foreword

Dan Burrows and Kyle Woodley say in Kiplinger Investing:

"The Berkshire Hathaway portfolio is a diverse set of blue chips and, increasingly, lesser-known growth bets. Here's a look at every stock picked by Warren Buffett and his lieutenants."

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, this Buffett/Berkshire batch is perfect for the dogcatcher process. Here is the April 21 data for 28 dividend paying stocks in the Kiplinger-documented collection of 44 currently owned by Buffett through his Berkshire-Hathaway firm.

Another resource consulted for this article was dogsofthedow.com which also keeps an ongoing spreadsheet of the Buffett/Berkshire stocks updated quarterly per BRK SEC filings, the next of which reports in May

A rapid market recovery after the Ides of March 2020 plunge made the possibility of owning productive dividend shares reflecting this collection less viable for first-time investors.

This April 2022 update shows that the following stock now lives up to the dogcatcher ideal of paying annual dividends (from a $1K investment) exceeding its single share prices: STORE Capital Group (STOR). Four more are within 17% of the ideal: The Kraft Heinz Co (KHC) at 7.32%; US Bank (USB) at 15.62%; Bank of New York Mellon (BK) at 16.53%; Verizon Communications Inc (VZ) at 16.82%. Those are closest to price drops showing dividends from $1k invested equaling their single share prices.

To run-down the 'safer' dividends of that one and the almost four, check-out the Dividend Dog Catcher marketplace site by clicking on the last summary bullet above after May 2.

Actionable Conclusions (1-10): Analysts Estimated 18.96% To 32.5% Net Gains For Ten Top Buffett-Held Dividend Stocks Come April 2023

Five of these ten Buffett-held top dividend stocks by yield were also among the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below). Thus, this yield-based forecast for these Buffett dogs was graded by Wall St. Wizards as 50% accurate.

Source: YCharts.com

YBUF (1A) GAINERS APR 22-23

YCharts.com

Estimated-dividends from $1000 invested in each of these highest-yielding stocks and their aggregate one-year analyst median target-prices, as reported by YCharts, produced the data points for the projections below. Note: one-year target prices by lone-analysts were not applied. Ten probable profit-generating trades projected to April 21, 2023 were:

Bank of America Corp (BAC) was projected to net $324.97, based on dividends, plus the median of target price estimates from twenty-four analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 38% greater than the market as a whole.

Wells Fargo & Co (WFC) netted $312.85 based on the median of estimates from twenty-four analysts, plus dividends. The Beta number showed this estimate subject to risk/volatility 18% greater than the market as a whole.

Bank of New York Mellon Corp was projected to net $307.84, based on the median of target estimates from 17 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 12% higher than the market as a whole.

Visa Inc (V) was projected to net $290.85 based on a median of target price estimates from thirty-two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 8% under the market as a whole.

United Parcel Service Inc (UPS) was projected to net $288.86, based on the median of target price estimates from twenty-eight analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 11% greater than the market as a whole.

U.S. Bancorp was projected to net $230.21 based on dividends, plus the median of target price estimates from twenty-two analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 1% under the market as a whole.

Mastercard Inc (MA) was projected to net $220.90 based on dividends, plus the median of target price estimates from thirty-three analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 8% greater than the market as a whole.

Royalty Pharma PLC (RPRX) was projected to net $209.77, based on a median of target price estimates from eight analysts, plus dividends, less broker fees. A beta number was not available for RPRX.

STORE Capital Corp was projected to net $206.00, based on the median of target price estimates from eleven analysts plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 22% over the market as a whole.

Verizon Communications Inc netted $189.57 based on the median of estimates from twenty-four analysts, plus dividends. The Beta number showed this estimate subject to risk/volatility 61% less than the market as a whole.

The average net gain in dividend and price was estimated at 25.82% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 8% over the market as a whole.

YBUF (2)FEBDOG APR,22 Open source dog art DDC 4 from dividenddogcatcher.com

open source dog art from duvidenddogcatcher.com

The Dividend Dogs Rule

Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best called, "underdogs."

44 Buffett Holdings By Target Gains

YBUF (3A) 44BYTGT APR,22-23

YCharts.com

28 Buffett Picks By Yield

YBUF (3B) 28BYYIELD APR,22-23

YCharts.com

Actionable Conclusions (11-20): 10 Top Buffett-Held Stocks By Yield (The Dogs of Berkshire-Hathaway)

Top ten Buffett-held stocks selected 4/21/22 by yield represented seven of eleven Morningstar sectors.

First place went to the lone real estate company STORE Capital Corp [1]. Thereafter, the lone communication services company placed second, Verizon Communications Inc [2].

Next, the first of two consumer defensive sector representatives placed third, The Kraft Heinz Co [3]. The other placed tenth, Coca-Cola Co (KO) [10].

Taking fourth was one of two dogs from the healthcare sector AbbVie Inc (ABBV)[4]. The other healthcare representative placed ninth, Bristol-Myers Squibb Co (BMY)[9].

Then, two financial services representatives placed fifth, and eighth, U.S. Bancorp [5], and Bank of New York Mellon Corp [8].

Finally, one from the energy sector placed sixth, Chevron Corp (CVX) [6], and, one industrial sector member took seventh, United Parcel Service [7], to complete the April Buffett/Berkshire top ten batch of dividend dogs, by yield.

Actionable Conclusions: (21-30) Top-Ten April Berkshire/Buffett Dogs Showed 18.2%-31.26% Upsides, While (31) Three Showed Downsides of -2.84 to -5.96%.

YBUF (4) UP/DNSIDES APR,22-23

YCharts.com

To quantify top-dog rankings, analyst median price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analyst median price target estimates became another tool to dig out bargains.

Analysts Forecast A 29.03% Advantage For 5 Highest Yield, Lowest Priced, Of 10 Top Buffett-Collected Dividend Stocks To April, 2023

Ten-top Buffett/Berkshire dividend dogs were culled by yield for this update. Yield (dividend/price) results provided by YCharts did the ranking.

YBUF (5)10LIST APR 22-23

YCharts.com

As noted above, top ten Buffett-chosen dividend dogs screened 4/21/22 showing the highest dividend yields represented seven of eleven Morningstar sectors.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Buffett-Held Dogs (31) Delivering 18.39% Vs. (32) 14.25% Average Net Gains by All Ten Come April 21, 2023

YBUF (6) 10GAINS APR 22-23

YCharts.com

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten dividend Buffett-selected kennel by yield were predicted by analyst 1-year targets to deliver 55.55% more gain than $5,000 invested as $.5k in all ten. The third lowest-priced selection, Bank of New York Mellon Corp, was projected to deliver the best analyst-estimated net gain of 30.78%.

YBUF(7)10BYPRICE APR 22-23

YCharts

The five lowest-priced top-yield Buffett-backed dividend dogs as of April 21 were: STORE Capital Corp; The Kraft Heinz Co; Bank of New York Mellon Corp; US Bancorp; Verizon Communications Inc, with prices ranging from $29.72 to $51.91.

Five higher-priced Buffett-picked dividend dogs as of April 21 were, Coca-Cola Co; Bristol-Myers Squibb Co; AbbVie Inc; Chevron Corp; United Parcel Service, whose prices ranged from $65.25 to $187.15.

The distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added a unique element of "market sentiment" gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 90% accurate on the direction of change and just 0% to 15% accurate on the degree of change (within 2.5%).

Afterword

If somehow you missed the suggestion of the one stock ready for pick-up at the start of the article, here is a reprise of the list at the end.

This April 2022 update showed that the following stock now lives up to the dogcatcher ideal of paying annual dividends (from a $1K investment) exceeding its single share prices: STORE Capital Group. Four more are within 17% of the ideal: The Kraft Heinz Co at 7.32%; US Bank at 15.62%; Bank of New York Mellon at 16.53%; Verizon Communications Inc at 16.82%. Those four are closest to price drops showing dividends from $1k invested equaling their single share prices.

To run-down the 'safer' dividends of that one and the almost four, check-out the Dividend Dog Catcher marketplace site by clicking on the last summary bullet above after May 2.

Price Drops or Dividend Increases Could Get All Ten Dogs of Berkshire Back to "Fair Price" Rates For Investors

YBUF(8)FAIRVSCURPR APR 22-23

YCharts

The charts above retain the current dividend amount and adjust share price to produce a yield (from $1K invested) to equal or exceed the single share price of each stock. As you can see, this illustration shows one fair priced dogs in the top ten [STOR] and nine out-of- bounds-priced stocks (KHC, VZ, ABBV; CVX; USB; BMY; KO; UPS; BK). The outliers need to trim prices between $3.16 and $109.18 to realize the 50/50 goal for share prices equaling dividend payouts from $10k invested.

The alternative, of course, would be for these companies raise their dividends. That, of course, is a lot to ask in these highly disrupted and dollar-flooded inflationary times.

Market action is the key. Four more only need to drop 18% to become Buffet Ideal dividend dogs.

The net gain/loss estimates above did not factor-in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as possible reference points for your Buffett/Berkshire batch stock purchase or sale research process. These were not recommendations.

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boule13/iStock via Getty Images

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This article was written by

Fredrik Arnold profile picture
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Simple, straightforward 7-step analysis that finds lucrative income stocks.
Fredrik Arnold is my pen name. In 2012 I retired from doing quality service analysis in Boston and moved to North Carolina in 2013, thence to Central Oregon in 2018. My fascination with capital preservation, long-term investments, and trading systems keeps me blogging for Seeking Alpha. My articles focus on dividend yields, analyst median 1 yr targets, free cash flow yields, and one-year total returns as stock trading indicators. These are essential tools for catching the most valuable dividend dogs. My dividend dogcatcher premium site in the Seeking Alpha Marketplace shows annual real-time trading results since 2015.
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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure:
Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb; YCharts; finance.yahoo; analyst mean target price by YCharts. Open source dog art from dividenddogcatcher.com

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