Buffett’s Preferred Dividend Stocks Increase Payouts, Yet Retail Investors May Hold a Significant ‘Structural Edge’ over the Oracle of Omaha

Warren Buffett’s favorite dividend stocks have once again increased their payouts, but retail investors may have a significant edge over the Oracle. Buffett has consistently achieved market-beating returns through his value investing strategy, which involves purchasing high-quality companies with durable competitive advantages and holding them until their shares appreciate.

Berkshire Hathaway’s portfolio mainly comprises such companies, including Coca-Cola, which it began investing in the late 1980s. The company’s shares are currently worth $25.8 billion, and Berkshire holds 400 million of them. These companies can consistently reward shareholders with regular dividends that grow over time. However, retail investors may have a structural advantage over Buffett due to their flexibility in pursuing long-term investment strategies.

Coca-Cola and Chevron are two iconic brands that have been able to maintain their dividends despite economic downturns. In 2022, Coca-Cola paid $7.6 billion in dividends, and their payout continues to grow, with a 4.6% increase in the quarterly dividend to 46 cents per share in February.

Chevron raised its quarterly dividend by about 6% to $1.51 per share in January, and their dividend has been resilient, expected to mark its 36th consecutive year of dividend growth in 2023.

Despite Berkshire Hathaway’s exponential growth, it may come with a disadvantage for finding opportunities for explosive growth, which is where retail investors can have an advantage.