Dividend Stocks That Billionaires Bought in 2023

Dividend stocks offer a timeless appeal, particularly for billionaires. While high-risk, high-reward strategies can be exciting, there’s something deeply satisfying about a constant stream of income trickling into your brokerage account. For the uber-wealthy, dividend stocks aren’t just an old-school favorite; they’re a financial cornerstone.

According to a study by Hartford Funds, dividend-paying stocks have outperformed non-dividend stocks over the last four decades, offering both capital appreciation and income generation—qualities that any astute billionaire would covet.

Criteria for Billionaire-Worthy Dividend Stocks

You and I might settle for a dividend stock with a consistent track record and decent yield, but billionaires operate on another level.

For the financial elite, the benchmarks include stringent evaluations of a company’s free cash flows, balance sheet strength, and market positioning.

Oh, and don’t forget a sustainable and growing dividend payout—no one likes a dividend cut, billionaires least of all.

Data from Morgan Stanley shows that over 70% of dividend-paying companies in the S&P 500 have increased their payouts in the past five years, a key metric that savvy billionaires look at before diving in.

Why Billionaires Prefer Dividend Stocks

What makes dividend-paying stocks so irresistible to the ultra-rich? They value stability and long-term growth, something dividend stocks excel at. It’s not just opinion—J.P. Morgan research shows that dividend-paying stocks have exhibited less volatility than non-dividend stocks over the last 40 years, aligning perfectly with a billionaire’s investment philosophy.

Whether it’s Apple’s decades of market domination or Johnson & Johnson’s century-long legacy, billionaire portfolios often contain names that have withstood the test of time.

Billionaire Dividend Stock Picks

Not all tech stocks are created equal. Giants like Apple, Microsoft, IBM, Oracle, and Cisco have drawn considerable attention from billionaire investors.

Apple, with its dividend yield of around 1.2%, has been a top pick for moguls like Warren Buffett. Meanwhile, Oracle’s yield of 1.7% continues to benefit Larry Ellison to the tune of hundreds of millions of dollars annually.

Companies like Apple and Microsoft are at the top of the billionaire wishlist. According to FactSet, these companies represent two of the top five in terms of dividend payout growth among tech companies, hence their desirability among the financial elite.

Lure of Energy Sector Dividends  

Amid global shifts towards sustainability, billionaires are betting big on green energy. Companies like NextEra Energy, with a dividend yield of about 2.80%, and Brookfield Renewable Partners, yielding 5.36%, are finding their way into affluent portfolios. These investments aren’t just a nod to trends but instead they’re a long-term bet on a greener future.

A Bloomberg New Energy Finance report shows that investments in renewable energy could reach $11 trillion by 2050, indicating a massive potential for dividend growth.

Consumer Staples Are a Safe Haven  

Talk about bulletproof. The consumer staples sector is known for its resilience during economic downturns. It’s a comforting thought to know that even in times of uncertainty, people still need toothpaste, toilet paper, and food.

According to Goldman Sachs, the consumer staples sector has an average dividend yield of 2.8%, making it one of the highest-yielding sectors in the S&P 500.

Companies like Procter & Gamble, Coca-Cola, and Unilever with their dependable dividends serve as safe havens for billionaire investors. But they aren’t just household names, billionaire treat them as portfolio staples too.

Healthcare Dividend Stocks Capture Imagination

The healthcare sector brings an intriguing mix to the dividend discussion—high growth potential coupled with steady income.

Pharmaceutical giants like Merck, Pfizer, and AbbVie have become regulars in billionaire portfolios because they promise a blend of innovation and steady income that’s hard to ignore.

MarketWatch data indicate that healthcare dividends have grown at an average annual rate of 10% over the past decade or so, significantly outpacing many other sectors.

Warren Buffett’s Dividend Stock Strategy in 2023

If anyone personifies the attraction of dividend stocks, it’s Warren Buffett. He’s not just content owning pieces of profitable businesses; he wants those businesses to pay him—and pay him well.

In 2023, Buffett’s strategy has seen a significant tilt toward tech and healthcare. Data suggests that this move is part of a larger trend that blends the durability of these sectors with consistent income streams.

In 2023, Berkshire Hathaway received over $3.8 billion in dividend income from his top 5 holdings alone, a 12% increase from the previous year. This further validates Buffett’s strategy of relying on dividend income, particularly from stalwarts like Apple and Coca-Cola.

Diversifying with Dividends Using Billionaire Playbook

If you look closely, billionaires don’t put all their eggs in one basket—or one sector, to be more precise. A blend of tech, energy, consumer staples, and healthcare dividend stocks usually dominates their portfolios. This mix serves as both an income and a growth engine, adding layers of financial security that most of us can only dream of.

UBS reported that the average billionaire holds more than 500 positions, with nearly 30% allocated to dividend-paying stocks, highlighting the crucial role of dividends in diversification strategies.

Dividend Stocks Build Billionaire Wealth

The enduring charm of dividend stocks remains a cornerstone in the strategies of billionaires in 2023. It’s a balanced recipe that offers the best of both worlds—steady income and growth potential.

And while you might not be a billionaire (yet!), there’s no reason you can’t adopt a page from their investment playbook. After all, if it’s good enough for Warren Buffett, it might just be good enough for the rest of us.

In a world where investment fads come and go with dizzying speed, dividend stocks offer a reassuring constant. They are the investment equivalent of a Swiss watch—elegant, dependable, and, in the right hands, a mark of enduring quality. 

---

The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.