Despite Recent Rally, Baby Boomers Should Play It Safe With Warren Buffett Dividend Stocks

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Long-time investors and Warren Buffett mavens are familiar with his quote, “His favorite holding for an S&P 500 stock is forever.” So it’s not surprising to report that for all the success and stature Berkshire Hathaway has in the investment world, just seven top companies make up almost 75% of the funds’ total holdings. Berkshire Hathaway has a long history of beating the market. Over the past 20 years, Berkshire Hathaway delivered an average annual return of 12.1%, compared to the S&P 500’s 11.5%, and it is beating the S&P 500 year to date.

While Wall Street and beleaguered investors have welcomed the rally off the 10% correction lows that followed stocks hitting all-time highs in February, the reality is that the same issues that led to the sell-off remain in place. While some of the tariff concerns have been alleviated, they are still expected to take effect on April 2. Sticky inflation, which hovers around the 3% level but feels higher for food and other essential items, remains in place, and geopolitical concerns over the Middle East and the Russian-Ukraine war persist.

For baby boomers tempted to play the rally, we suggest caution. The Federal Reserve is only going to lower rates if the economy sputters in a big way, and the S&P 500 still trades at a whopping 28.77 times trailing earnings. Baby boomers looking to invest in stocks should consider some of Warren Buffett’s dividend picks in Berkshire Hathaway. We found four that are perfect ideas that can deliver growth and passive income.

Why do we cover Warren Buffett stocks?

Few investors have the results and reputation that Buffett has garnered over the past 50 years. While investing has evolved over the past half-century, buying good companies with products and services recognized worldwide while paying dividends will always remain in style.

Citigroup

Citigroup Inc. (NYSE: C) is an American multinational investment bank and financial services company based in New York City. This is a top-tier money center bank in which Buffett purchased a massive $2.5 billion worth of stock in the summer of 2022. Citigroup is a leading global diversified financial service company that provides consumers, corporations, and governments with a broad range of financial products and services.

Citigroup offers:

• Consumer banking and credit
• Corporate and investment banking
• Securities brokerage
• Transaction services
• Wealth management services

Citi operates and does business in more than 160 countries and jurisdictions in North America, Latin America, Asia, Europe, the Middle East, and Africa (EMEA).

Trading at a reasonable 9.2 times estimated 2025 earnings, this company appears attractive in a volatile stock market and in a sector that has lagged behind in 2024 but is poised to gain ground.

Coca-Cola

Coca-Cola Co. (NYSE: KO) is an American multinational corporation founded in 1892. It remains a long-time top holding of Buffett. He owns a massive 400 million shares. Coca-Cola is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands.

Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the Company’s portfolio features 20 billion-dollar brands, including:

• Diet Coke
• Coca-Cola Light
• Coca-Cola Zero Sugar
• Caffeine-free Diet Coke
• Cherry Coke
• Fanta Orange
• Fanta Zero Orange
• Fanta Zero Sugar
• Fanta Apple
• Sprite
• Sprite Zero Sugar
• Simply Orange
• Simply Apple
• Simply Grapefruit
• Fresca
• Schweppes
• Dasani
• Fuze Tea
• Glacéau Smartwater
• Glacéau Vitaminwater
• Gold Peak
• Ice Dew
• Powerade
• Topo Chico
• Minute Maid

Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks.

Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of more than 1.9 billion servings a day. It’s also important to remember that the company owns 16.7% of Monster Beverage, which continues to deliver strong financial results.

Constellation Brands

Constellation Brands Inc. (NYSE: STZ) is the largest beer import company in the United States, measured by sales, and has the third-largest market share of all major beer suppliers. If there is any company whose products remain in style, it is this one, which achieves only 7% of its sales abroad. Constellation Brands produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy.

The company provides beer primarily under these popular brands:

• Corona Extra
• Corona Premier
• Corona Familiar
• Corona Light
• Corona Refresca
• Corona Hard Seltzer
• Modelo Especial
• Modelo Negra
• Modelo Chelada
• Victoria
• Vicky Chamoy
• Pacifico

It also offers wine under:

• Cook’s California Champagne
• Kim Crawford
• Meiomi
• Mount Veeder
• Ruffino
• SIMI
• My Favorite Neighbor
• Robert Mondavi Winery
• Schrader
• The Prisoner Wine Company

Spirits are sold under the Casa Noble, Copper & Kings, High West, Mi CAMPO, and Nelson’s Green Brier brands.

Kroger

Kroger Co. (NYSE: KR) is an American retail company that operates supermarkets and multi-department stores throughout the United States. This grocery chain giant is a consistently solid and conservative investment. It operates combination food and drug stores, multi-department stores, marketplace stores, and price-impact warehouses.

Its combination of food and drug stores offers:

• Natural food and organic sections
• Pharmacies
• General merchandise
• Pet centers
• Fresh seafood and organic produce

Multi-department stores offer:

• Apparel
• Home fashion and furnishings
• Outdoor living
• Electronics
• Automotive products
• Toys

The company’s marketplace stores offer:

• Full-service grocery, pharmacy, health and beauty care
• Perishable goods, as well as general merchandise, including apparel, home goods, and toys
• Price-impact warehouse stores sell groceries, health and beauty care products, meat, dairy, baked goods, and fresh produce.

The company also manufactures and processes food products in its supermarkets and online, and it sells fuel through 1,613 fuel centers.

Why J.P. Morgan’s High-Yield Dividend ETF Is the Safest Way to Stay Invested Now

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