Income investors may find one of the stocks Warren Buffett purchased in the second quarter particularly appealing.
Warren Buffett has been at the helm of Berkshire Hathaway for over sixty years. Throughout this time, the former textile company that evolved into a massive conglomerate has never issued a dividend, not even a cent.
Nonetheless, Buffett has a penchant for dividend stocks. In Q2 of 2025, he acquired 12 dividend-paying stocks. Which of these is the most attractive for income investors?
Buffett’s Recent Dividend Purchases
The table below illustrates the 12 dividend stocks Buffett bought in Q2 (listed alphabetically):
| Stock | Dividend Yield |
|---|---|
| Allegion (NYSE: ALLE) | 1.20% |
| Chevron (CVX 0.03%) | 4.34% |
| Constellation Brands (NYSE: STZ) | 2.52% |
| Domino’s Pizza (NASDAQ: DPZ) | 1.51% |
| D.R. Horton (NYSE: DHI) | 0.94% |
| Heico (HEI -1.32%) | 0.08% |
| Lamar Advertising (LAMR -0.93%) | 4.95% |
| Lennar Class A (LEN -0.70%) | 1.48% |
| Lennar Class B (LEN.B) | 1.55% |
| Nucor(NYSE: NUE) | 1.47% |
| Pool Corp.(NASDAQ: POOL) | 1.56% |
| UnitedHealth Group(UNH -0.68%) | 2.90% |
Sources: Berkshire Hathaway 13F filings, Google Finance.
Half of these stocks were newly added to Berkshire’s portfolio. Buffett made a significant purchase of over 5 million shares in UnitedHealth Group during Q2, likely identifying it as a rare opportunity after its stock dropped by approximately 50%.
Stock Comparisons and Considerations
For many income investors, dividend yield is a primary factor when selecting stocks. Some of Buffett’s recent acquisitions with lower yields, such as Allegion, D.R. Horton, and Heico, may not attract attention. Lamar Advertising offers the highest yield, closely followed by Chevron.
However, yield alone doesn’t suffice. Investors also seek sustainable dividends, often evaluated through the payout ratio. Lamar Advertising and Constellation Brands present concerns with payout ratios exceeding 100%, while the other stocks purchased by Buffett have ratios below that threshold.
Income investors often favor companies with long histories of dividend increases. Although none of the Dividend Kings appear on Buffett’s Q2 list, Chevron stands out as a Dividend Champion with a remarkable 38 years of continuous dividend growth.
Top Picks for Income Investors
Among the 12 stocks Buffett bought in Q2, two notably stand out for income investors.
The second-best option is UnitedHealth Group, noted for its appealing dividend yield and a low payout ratio of 36.8%. As the company implements premium increases, it should rebound to growth next year.
However, Chevron emerges as the top choice. The oil and gas giant boasts a substantial dividend yield and a commendable history of increasing dividends. Although not the cheapest stock, it isn’t drastically overpriced, trading at 20 times forward earnings. Income investors can likely rely on Chevron for steady and growing dividends for the foreseeable future.
Keith Speights holds positions in Berkshire Hathaway and Chevron. The Motley Fool has positions in and recommends Berkshire Hathaway, Chevron, D.R. Horton, Domino’s Pizza, and Lennar. The Motley Fool also recommends Constellation Brands, Heico, and UnitedHealth Group. For more details, refer to the disclosure policy.
