Legendary investor Warren Buffett has been scaling back his stock holdings, and his latest move has left many wondering what’s behind the shift. For seven consecutive quarters, Buffett’s Berkshire Hathaway has been a net seller of stocks, with 11 notable sales in the second quarter of 2024 alone. While the Oracle of Omaha has been trimming his positions in various companies, one stock stands out as a lucrative opportunity for income investors.
Among the stocks Berkshire Hathaway sold in Q2, Apple was the biggest casualty, with Buffett slashing nearly half of his stake in the tech giant. However, Apple remains the largest holding in Berkshire’s portfolio, suggesting that Buffett still sees value in the company. Other notable sales include shares of Bank of America, Capital One Financial, and Chevron, which saw a 3.6% reduction in Berkshire’s stake.
While some of the sold stocks may not be ideal for income investors due to their low or non-existent dividend yields, one company stands out for its attractive income potential: Chevron. With a forward dividend yield of 4.58%, Chevron offers a juicy return for investors seeking steady income. The company’s impressive 37-year streak of dividend increases is a testament to its commitment to rewarding shareholders.
Chevron’s prospects look bright, with potential catalysts such as lower interest rates boosting the US economy and increased oil consumption. The company’s pending acquisition of Hess, set to be resolved through arbitration next year, could also lead to significant portfolio expansion and diversification. This, in turn, could result in higher cash flow and dividend distributions to shareholders.
As the demand for oil and gas remains strong, Chevron’s investment in carbon capture and storage technology could also pay off in the long run. With Buffett still maintaining a significant stake in Chevron, income investors may want to take a closer look at this high-yield dividend stock.
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