Most people who enjoy tracking Warren Buffet’s investments know that the Oracle of Omaha is a major fan of dividend-paying investments. The dividend holdings held by Berkshire Hathaway have played a big role in the overall returns to the company for many decades. Of the 49 stocks in Buffett’s portfolio, 31 currently pay dividends, and he’s estimated to have collected more than six billion dollars in dividends in 2023. This number has continued to grow over time, as Buffett collected just above $6 billion in dividends in 2022, $5.06 billion in 2021, and $4.89 billion in 2020. It’s important to know that Buffet's love of dividends isn’t new, but that he’s been a fan of dividend-paying investments for decades.

According to Rich Duprey from Investor Palace, since becoming CEO of Berkshire Hathaway in 1965, Warren Buffett has generated 3.7 million percent returns for investors. In comparison, the S&P 500 returned 24.7 thousand percent. Although both are really impressive, it’s obvious that Warren has been the overall better investor by a significant amount. It seems clear that he’s very much aware of the power of compounding dividends and their importance when it comes to returns. I’ve shown this graph before, which shows the overall returns of the S&P 500 when dividends were taken into consideration as opposed to not being factored in. Over time, dividend-paying investments in S&P have been a significant source of total shareholder returns.

Through the years, Warren's has held a lot of dividend-paying stocks, including some that are specifically designed to pay high amounts of dividends, such as real estate investment trusts. In 2017, he invested in Store Capital, picking up about 9.8% of all outstanding shares. This stock was actually my second favorite REIT before it was acquired and delisted in early 2023. If you include the holdings held by New England Asset Management, a subsidiary of Berkshire Hathaway, they hold other high-yielding stocks, including business development companies. But Warren recently made headlines when he went on a $600 million dollar buying spree into a sector that’s known for paying large dividends.

  / dividendbull  

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