Warren Buffett has always loved stocks. But there are times when he doesn’t like them very much. Now is one of those times.
The legendary investor has been net shorting stocks for seven consecutive quarters. his Berkshire Hathaway sold 11 stocks in the second quarter of 2024. But one stock still looks like the best stock for income investors.
Buffett shares sold in second quarter
Buffett’s biggest sale in the second quarter was cutting nearly half of his position at Berkshire Hathaway. apple. However, despite aggressive sales, Apple still Largest holding in Berkshire’s portfolio.
Two major financial services companies have also fallen out of Mr. Buffett’s favor to some degree. Berkshire continued to sell stock. bank of america It also sold 21% of its shares in the second quarter. capital one financial.
94-year-old investor has reduced Berkshire’s standing chevron (NYSE:CVX) It increased by 3.6% in the second quarter. He also downgraded the status of conglomerates. Liberty Media Class A and Liberty Media Class C less than 2% each.
Berkshire’s other relatively modest sales in the second quarter included: floor and decoration, Louisiana-Pacificand T-Mobile US. But he has completely stepped back from Berkshire’s position. paramount global and snowflake.
Contains multiple dividend stocks
Income investors may be telling Berkshire to hang up on some of the stocks it sold in the second quarter. Floor & Decor, Liberty Media, and Snowflake do not pay dividends.
The other two companies offer small dividends. apple’s Future dividend yield is only 0.44%, while Louisiana Pacific’s forward dividend yield is 0.97%.
Capital One Financial’s forward dividend yield of 1.63% may make it a little more attractive for income investors. T-Mobile US and Paramount Global pay even better dividends with yields of 1.73% and 1.89%, respectively.
Buffett doesn’t like Bank of America as much as he used to, but he can’t complain much about the big bank’s dividends. BofA’s future dividend yield is 2.65%. The company recently increased its dividend by 8%.
Things that income investors can buy without hesitation
However, there is one stock that Buffett sold in the second quarter that income investors would think would be a no-brainer buy. Chevron offers an impressive forward dividend yield of 4.58%. The company has continued to increase dividends for 37 consecutive years.
Chevron could be helped in the short term by several factors. Lower interest rates could boost the U.S. economy and spur more oil and gas consumption. Oil prices may continue to rise due to tensions in the Middle East.
Looking a little further down the line, the Arbitration Board plans to conduct a hearing next year to address the challenges it has raised. exxon mobil (NYSE:XOM) In connection with the pending acquisition by Chevron. hess (New York Stock Exchange: HES). Chevron CEO Mike Wirth said on the company’s second-quarter earnings call that he is confident that the arbitration will result in a positive outcome.
Assuming Wirth’s optimism is justified, Chevron’s acquisition of Hess should significantly expand and diversify the company’s portfolio of oil and gas assets. Most importantly for income investors, this transaction also results in increased cash flow and increased dividends to shareholders.
Demand for oil and gas is likely to remain strong for a long time to come, even as renewable energy deployment increases. Chevron is also making significant investments in carbon capture and storage technology. If these efforts are successful, the company’s long-term prospects could be particularly positive.
Despite selling some shares in the second quarter, Buffett still likes Chevron. Otherwise, Chevron would not have become Berkshire’s fifth-largest holding. I think income investors should also like this high dividend stock.
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Bank of America is an advertising partner of The Motley Fool’s Ascent. Keith Spates He has held positions at Apple, Bank of America, Berkshire Hathaway, Chevron, and ExxonMobil. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, Chevron, and Snowflake. The Motley Fool recommends T-Mobile US. The Motley Fool has Disclosure policy.
Warren Buffett sold 11 stocks in the second quarter. But for income investors, 1 is still a no-brainer buy. Originally published by The Motley Fool
