Warren Buffett likes buying businesses. He’s also very good at it. You don’t become one of the world’s richest billionaires and most famous investors without a knack for spotting a solid business model.
Buffett is serious, too, about how solid he wants his investments to be. He likes battle-tested companies he can hold for decades. And the qualities that provide corporate staying power are often the same qualities that enable a company to pay dividends reliably.
It’s not surprising, then, that several of Buffett’s favorite stocks pay dividends — and at good yields. Here’s a look at five of those stocks which, combined, could generate a five-digit passive income stream down the road.
1. Chevron (NYSE: CVX)
Buffett first bought shares of Chevron in 2020. But he recently tripled his position in the energy company — a sign of his confidence in Chevron’s long-term prospects. Chevron is now the fourth-largest position in Berkshire Hathaway’s stock portfolio.
Chevron’s current annual dividend is $5.68 per share, which works out to a 3.7% yield. The company has increased its dividend annually for the past 35 years.
2. Paramount Global (NASDAQ: PARA)
Media company Paramount Global is a new position for Buffett. He bought up 68 million shares for Berkshire in the first quarter of this year.
Paramount’s dividend dates to 2006. The history is less consistent than Chevron’s, but the annual dividend did double between 2013 and 2022. The current yield for Paramount is 3.9%.
3. Coca-Cola (NYSE: KO)
Buffett first bought a piece of Coke back in 1988. While Buffett hasn’t increased the position this year, Berkshire does own more than 9% of the beverage company.
Coca-Cola has been increasing its dividend payments annually for 61 years. The current yield is 2.9%.
4. Bank of America (NYSE: BAC)
Bank of America is Berkshire’s second-largest stock position. Berkshire first reported ownership in the bank in 2017. Today, the position totals more than 1 billion shares.
Bank of America’s dividend dates to 2005, though it was a lean payout between 2008 and 2017. The current yield is 2.5% based on annual payments totaling $0.84.
5. Citigroup (NYSE: C)
Buffett closed out his position of Wells Fargo earlier this year and picked up 55 million shares of Citigroup instead.
Citigroup’s yield of 4.2% is the highest on this list. Citigroup’s dividend, like Bank of America’s, faltered in the years following the 2008 financial crisis. But in recent years, the shareholder payout has grown, from $0.64 annually in 2016 to $2.04 in 2021.
Getting to $10,000 in passive dividend income
The average dividend yield across these five stocks is 3.48%. To turn that yield into $10,000 in annual passive income, you’d need roughly $290,000 in the dividend-paying assets.
Chances are, you don’t have an extra $290,000 sitting around. But you can build to that number with some planning. As you’ll see in the table below, investing $960 monthly for 15 years sets you up to reach that $290,000 milestone.
In case $960 monthly is a stretch right now, the table also shows projections for smaller monthly investments.
Projected Balance After 15 Years
Approx. Passive Income at 3.48% Yield
The numbers assume your investments grow 7% on average annually. That’s a reasonable growth rate for periods of 10 years or more — as long as you reinvest your dividends.
Next steps to passive income
If you’re committed to developing a passive income stream with dividend stocks, your next step is research. Dive deeper into these Buffett stocks and other companies that interest you. Then, make your plan and start investing.
Now’s a good time to kick off that plan, too. Stock prices are down which, in turn, pushes yields higher. Those trends create opportunities for the longer-term investor who, in Buffett’s words, is ready to “be greedy when others are fearful.”
10 stocks we like better than Chevron
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Catherine Brock has positions in Coca-Cola. The Motley Fool recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
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PREVIOUS OPENINGS AND CLOSINGS
· Coal Winery and Kitchen at 81 Broad St., Bethlehem, has closed as its owner searches for a new location for the business, according to its Facebook page.
· Lowhill Township supervisors approved a 312,120-square-foot commercial warehouse and distribution center on a 43.4-acre tract on the west side of Route 100, south of the Kernsville Road intersection.
· The Mint Gastropub at 1223 W. Broad St., Bethlehem, announced that it has temporarily closed to undergo a merger with a “well-known restaurant group” from Bethlehem.
· The Slatington Farmers Market opened its 28,000-square-foot showroom, which includes space for 53 vendors, as well as a 4,000-square-foot event space.
· St. Luke’s University Health Network opened a new pediatric inpatient unit next to the eight-bed pediatric intensive care unit at St. Luke’s University Hospital – Bethlehem.
· 25th Asian House opened at the location of the former Tin Tin Chinese restaurant in the 25th Street Shopping Center in Palmer Township.
· The Chick-Fil-A in Broadcasting Square shopping center in Spring Township was razed to make way for a new, expanded facility for the popular chicken sandwich restaurant.
· Plans for drive-thru locations of a Chipotle and a Starbucks at the intersection of Ivy League Drive and Kutztown Road were rejected by Maxatawny Township planners.
· Cumru Township plannes reviewed preliminary plans for NorthPoint-Morgantown Commerce Center, a 738,720-square-foot warehouse to be built on 75.2 acres at Morgantown Road (State Route 10) and Freemansville Road.
· Kutztown University has plans to expand its historic Poplar House to 13,161 square feet with an addition around its side and back, but keep the 129-year-old structure intact.
· A wine store and beverage outlet could be coming to a new two-unit building along the commercial strip of Blakeslee Boulevard Drive East in Lehighton, Carbon County.
· ChristianaCare, a Delaware health care organization, has announced it will buy the former Jennersville Hospital in West Grove, Chester County.
· Garden of Health Inc. celebrated the opening of the food bank’s new warehouse at 201 Church Road, North Wales, in Montgomery County.
· Silverline Trailers Inc. opened its first location in Pennsylvania and in the Northeast at 223 Porter Road, Pottstown, where it sells utility, cargo, dump, equipment and car hauler trailers.
· A new smoothie and bowl restaurant, Sips & Berries, opened at 285 Maple Ave., Harleysville, in Montgomery County.
· Terrain on the Parkway offers 160 new 1-, 2- and 3-bedroom apartments at 1625 Lehigh Parkway East in Allentown.
· Lehigh Valley native Don Wenner is moving his real estate investment and finance firm DLP Capital from Bethlehem to Allentown at 835 W. Hamilton St.
· While Wells Fargo has been the leader in closing banks lately, it will hold a ribbon-cutting for its new downtown Allentown office at 740 Hamilton St. on June 30.
· If you’re in the market for sterling silver jewelry, minerals and semi-precious gemstones, C& I Minerals is now operating at the South Mall at 3300 Lehigh St. in Allentown.
· The Allentown-based utility company PPL Corp. bought a major Rhode Island utility.
· Ownership at Martellucci’s Pizzeria in Bethlehem has changed, but Paul and Donna Hlavinka and their family are running the pizza place at 1419 Easton Ave., just as it has been operated for 49 years.
· Dr. Jacob Kasprenski’s new Kasprenski Family Eye Care opened at 1088 Howertown Road, Catasauqua.
· Josie’s New York Deli in downtown Easton closed early in the COVID-19 pandemic, but a June 13 Historic District Commission meeting approved a request for a new sign at its building at 14 Centre Square.
· Zekraft cafe has opened its second location in the Easton Silk Mill in Easton. The first Zekraft restaurant was opened in Bethlehem. The restaurants’ menus change frequently, with a focus on local ingredients.
· Manta Massage at 319 Main St., Emmaus, will hold its grand opening on July 10 starting at 11 a.m.
· The former Iron Lakes Country Club, constructed in the late 1950s and early 1960s, will operate at 3625 Shankweiler Road in North Whitehall Township under its new name, The Club at Twin Lakes.
· Prologis, a titan in the logistics industry, will own and operate three warehouses proposed in Upper Macungie Township at the former Air Products headquarters campus at 7201 Hamilton Blvd.
· Lehigh Valley Health Network ceremonially opened its first Carbon County hospital — a $78 million, 100,578-square-foot facility at 2128 Blakeslee Boulevard Drive East in Mahoning Township.
· Pocono Township commissioners voted to accept Swiftwater Solar’s preliminary final plan for the $111 million, 80-megawatt field on a private 644-acre site on top of Bear Mountain that would include about 200,000 solar panels.
· Firetree Ltd. wants to expand its in-patient rehab operation at the former Sands Ford auto dealership at 440 N Claude A Lord Blvd. (Route 61), Pottsville.
· A Dunkin’ in Schuylkill County located at 400 Terry Rich Blvd., St. Clair, has become just the fourth location of the donut and coffee chain to go entirely digital.
· The Conservatory music school in Bucks County will close after 34 years, and school officials say the COVID-19 pandemic is the cause. The nonprofit, located at 4059 Skyron Drive, Doylestown, will close June 30.
· A Popeyes Louisiana Kitchen and Arby’s will be built on the site of the former Ahart’s Market on Route 22 in Phillipsburg, New Jersey.
· Hunterdon County Chamber of Commerce offices and the Unity Bank Center for Business & Entrepreneurship will be located at 119 Main St., Flemington.
· Honeygrow opens Quakertown location, next to Chipotle on Route 309, on June 3.
· Dunkin’ reopens remodeled restaurant at 1174 MacArthur Road in Whitehall Township
· Muse Modern Med Spa at 325 Fifth St. in Whitehall Township will hold a grand opening June 4.
· Around Again, a consignment store, opened at 154 S. Main St., Phillipsburg
· Steak and Steel Hibachi, a restaurant in the works at 44 W. Walnut St., Bethlehem, still plans on opening late this summer.
· Take It Outdoors Recreation Hub has moved to a spot along the Schuylkill River Trail at Riverfront Park in Pottstown, Montgomery County
· Pedego Electric Bikes has a new outlet in Lambertville, N.J. at 13 N. Union St.
· Amanda Vachris has opened a new Keller Williams Real Estate office at 15 St. John St. in Schuylkill Haven.
· Easton’s new West Ward Market will open Wednesday and be open on Wednesday’s through the summer from 3 p.m. to 7 p.m. The market, created by the Greater Easton Development Partnership, will sell fresh produce on 12th Street, next to Paxinosa Elementary School.
· Ciao Sandwich Shoppe is adding a second location, this time on College Hill in Easton. Ciao plans to open at 325 Cattell St. in late summer. Ciao already operates in downtown Easton at 12 N. Third St
· Ma’s Crepes and Cakes will hold a grand opening and ribbon-cutting June 16 at 46 W. Broadway, Jim Thorpe. The celebration starts at 5 p.m., with the ribbon cutting at 5:45 p.m.
· Bethlehem’s Back Door Bakeshop will reopen as a wholesale operation at 7 E. Church St. in the city’s historic district. The business was open for nine years as a retail outlet at Broad and Center streets, before announcing in March that it would close the storefront April 3 and “go back to its origins as a wholesale business.”
·The Beef Baron on Catasauqua Road in Bethlehem is closed indefinitely for renovations
· The Brothers That Just Do Gutters are opening a new location in Allentown at 1302 N. 18th St.
· St. John Chrysostom Academy, an Orthodox school serving grades 1-9 starting this fall, held a grand opening at its St. Francis Center, Bethlehem, campus.
· Easton Commons, a shopping center anchored by Giant Foods at 2920 Easton Ave., Bethlehem Township, has a new name: The Shops at Bethlehem.
· Carbon County is getting a taste of Brazil at Uai Brasil BBQ at 315 Lehigh Ave. in Palmerton.
· The Keystone Pub in Bethlehem Township, at 3259 Easton Avenue, has reopened after a lengthy and expensive renovation.
· The Trading Post Depot opened at 401 Northampton St., Easton. The rustic furniture store makes custom tables for dining rooms, desktops, conference centers and more.
· The Easton area has a new gym: Homemade Fitness at 444 Cedarville Road in Williams Township.
· Il Gaetano Ristorante opened at its 665 Columbus Ave., Phillipsburg, location.
· Ciao! Sandwich Shoppe to open second location on College Hill in Easton, replacing The Kettle Room
· Rene and Grisellies Benique have opened Ezekiel 47 Cafe at 10 S. Fifth Ave., off Fifth and Penn avenues, in West Reading.
· Alter Ego Salon and Day Spa in Emmaus is holding a grand opening Sunday, May 22, from 11 a.m. to 3 p.m., with a ribbon cutting at noon.
· Origen Latin Fusion has opened at the site of the former Tomcat Cafe in Sinking Spring, Berks County.
· Sellersville Senior Residences will hold a ribbon-cutting ceremony May 24. The Bucks County affordable-housing community for adults 55 and older has 50 apartments, with eight allocated for people with behavioral health needs.
· The House and Barn in Emmaus has opened its Shed outdoor dining and cigar bar area. The House and Barn is at 1449 Chestnut St. in Emmaus.
· Realtor Amanda Vachris and the Schuylkill Chamber of Commerce will hold a ribbon cutting at Vachris’s new Keller Williams Real Estate office at 15 St. John St., Schuylkill Haven, at 4 p.m. on May 24.
· Il Gaetano Ristorante will hold a grand opening on Friday, May 20, at 5:30 p.m. The 665 Columbus Ave., Phillipsburg.
· First Commonwealth Federal Credit Union will hold a grand opening at its new headquarters in Trexlertown, 6126 Hamilton Blvd., on May 18.
· Vinyl Press Signs & Graphics has relocated within Emmaus. The new site is 15 S. Second St., not far from the former Sixth Street location.
· Pedro’s Cafe in Emmaus to close
· SV Sports (formerly Schuylkill Valley Sports) to close Quakertown location
· Flemington DIY will host a Grand Re-Opening on May 14 at 26 Stangl Road, Flemington. The celebration will kick off at 10 a.m.
· Elpedio’s Ristorante at Seipsville opened at 2912 Old Nazareth Road in Easton. The restaurant is open Wednesday through Sunday.
· Uai Brazil opened at 315 Lehigh Ave, Palmerton, offering both a seated or buffet option.
· Colombian Mex Restaurant opened at 107 E Union Blvd in Bethlehem, offering traditional Colombian cuisine.
· Precision Ink opened at 161 W Berwick St. in Easton.
· King Wing opened a location in Bethlehem at 129 E. Third St., serving wings and sandwiches.
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