The 3 stocks that protect Warren Buffett from high inflation

  • The Oracle of Omaha is betting on strong dividing stocks and oil companies remain their favorites.
  • Buffett has amassed nearly $2 billion in dividend income in a year from just three stocks: US Bancorp, Coca-Cola and Chevron.
  • In addition, the investor has bought the fall of several companies in recent times, demonstrating calm and optimism in the long term, while the markets collapse.

This Friday the market received a severe blow after the data on inflation in the United States was released, which reached 8.6% in the last twelve months, being the highest in 40 years.

While analysts believe that we are close to the bottom, others say that there are still downsides ahead. In any case, investors, instead of buying low and selling high, are buying low and selling, in many cases, at a loss.

However, this runs counter to Warren Buffett’s thoughts of being ambitious when others are fearful. That’s why the Oracle of Omaha has been buying the decline of several stocks, including its biggest holding: Apple.

But to escape high inflation right now, Buffett bets on strong dividend stocks. Just three of his holdings have generated nearly $2 billion in profit from this passive income. Next, we see them in detail.

U.S. Bancorp (USB)

The parent company of US Bank, US Bancorp is one of the largest financial institutions in the United States.

The bank recently increased its quarterly cash dividend from 42 cents to 46 cents per share, which equates to $1.84 per annualized share.

Buffett’s Berkshire owns 144,046,330 US Bancorp shares, meaning he’s earning more than $265 million in annual dividend income from this holding alone.

USB titles are trading at almost 49 USD and accumulate a loss of 13.4% in 2022.

Coca-Cola (KO)

Beloved by Buffett, the Oracle of Omaha began amassing Coca-Cola stock in the 1980s and already owns 400 million shares of the company.

In February, the board approved the company’s 60th consecutive annual dividend increase, raising the annual payout to $1.76 per share, indicating that Berkshire collects $704 million in dividends a year from Coca-Cola.

The stock is trading around $61.50 and up nearly 4% year-to-date, widely outperforming the S&P 500.

Chevron (CVX)

Oil stocks are preferred at this inflationary moment for Warren Buffett. So much so that he bought and expanded his stake in Occidental Petroleum and also in Chevron. These companies have benefited greatly from the surge in oil, which has shot up to over $120 a barrel.

At the end of the first quarter, the nonagenarian had nearly 160 million Chevron shares worth nearly $28 billion, the third-largest holding in Berkshire.

In January, Chevron’s board approved a 6% increase in the quarterly dividend rate to $1.42 per share, making Buffett rake in more than $900 million a year in dividends.

Chevron shares are already up 48% in 2022 and now offer an annual dividend yield of 3.2%.