6 Dividend Stocks Make Up 78.4% of Warren Buffett's $370 Billion Portfolio, and They Are All Cheaper

Berkshire Hathaway's top stock holdings are all good values right now.
Famed investor Warren Buffett is known for finding quality businesses at a good value and holding them over time. When his conglomerate Berkshire Hathaway (BRK.A 0.69%) (BRK.B 0.19%) first began investing in Apple (AAPL 1.02%) in 2016, that stock traded at a steep discount to the market -- with a price-to-earnings (P/E) ratio in the range of 10 to 14.5 that year. Back then, sentiment was negative -- there was a widespread view that Apple's growth was plateauing, its market expansion had played out, and its products were limited -- not to mention it didn't have the high-margin services segment it has today.

A lot has changed since then. But Apple has once again lost its market premium. Over the last six months, the S&P 500 is up 14.6%, while Apple stock is down 4.9%. On March 1, Apple sold off, and the S&P 500 rose. At one point, Apple's P/E ratio fell below the S&P 500's, but it ended up finishing the day at 27.9, which was, coincidentally, the same as the S&P 500.

Berkshire Hathaway's other top public equity holdings -- Bank of America (BAC -0.08%), American Express (AXP -0.02%), Coca-Cola (KO 0.14%), Chevron (CVX 0.34%), and Occidental Petroleum (OXY -0.41%) -- are all trading at discounts to the S&P 500. Combined with Apple, these six companies make up 78.4% of Berkshire's portfolio.

Let's consider why Buffett and his team like these companies, and the qualities that make them good long-term holdings.Warren Buffett's investment strategy often focuses on long-term investments in companies with strong fundamentals. Dividend stocks form a significant portion of his portfolio, constituting about 78.4% of his $370 billion portfolio. These dividend stocks are currently valued at a price lower than the overall market represented by the S&P 500 index. This approach reflects Buffett's preference for value investing, seeking undervalued assets with the potential for growth over time.

While I cannot provide real-time data, historically, some of the dividend stocks that have been a significant part of Warren Buffett's portfolio include:

1. Coca-Cola (KO)
2. Apple Inc. (AAPL)
3. Bank of America (BAC)
4. American Express (AXP)
5. Wells Fargo (WFC)
6. Kraft Heinz (KHC)

Please note that the composition of Warren Buffett's portfolio may change over time due to his investment decisions and market conditions.

CONCLUSION

Warren Buffett, a renowned investor, employs a long-term investment strategy, focusing on companies with robust fundamentals. Approximately 78.4% of his $370 billion portfolio consists of dividend stocks, reflecting his inclination towards value investing. This approach involves identifying undervalued assets with growth potential over time.

The six dividend stocks historically associated with Buffett's portfolio include:

1. Coca-Cola (KO)
2. Apple Inc. (AAPL)
3. Bank of America (BAC)
4. American Express (AXP)
5. Wells Fargo (WFC)
6. Kraft Heinz (KHC)

These stocks are chosen based on their strong fundamentals and are currently valued at prices lower than the broader market represented by the S&P 500 index. It's important to note that the specific composition of Buffett's portfolio may change over time as he makes investment decisions and responds to market dynamics.