Warren Buffett's Top Dow Stocks for Income Investors

Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, has a penchant for buying and holding large-cap stocks for the long term. Among his portfolio, six Dow Jones Industrial Average (^DJI 0.78%) stocks stand out, offering attractive income opportunities for investors. Let's dive into these six stocks and determine the best pick for income investors right now.

1. Coca-Cola (KO 0.74%)
Coca-Cola is one of Buffett's longest-held stocks, with a 34-year history in his portfolio. The beverage giant has a strong track record of dividend growth, with a 62-year streak of consecutive increases. Its forward dividend yield is 3.1%, and the company has consistently rewarded shareholders with rising dividends.

2. American Express (AXP 0.35%)
Buffett has owned American Express since 1991, and the financial services giant has a forward dividend yield of 1.4%. Although its yield is lower than Coca-Cola's, American Express has a more reasonable valuation, with a forward P/E ratio of 20.5. The company has also shown strong earnings growth, with a 70% increase in its share price over the last 12 months.

3. Apple (AAPL 0.75%)
Buffett began buying Apple in 2016, and the tech giant has since become Berkshire Hathaway's largest holding. Apple has a forward dividend yield of 0.75%, which may not appeal to income investors. However, the company's strong earnings growth and Buffett's praise for its business model make it an attractive long-term holding.

4. Chevron (CVX 1.31%)
Buffett began aggressively buying Chevron in the fourth quarter of 2020, and the oil stock has since become one of Berkshire's largest holdings. Chevron has a forward dividend yield of 4.05%, the highest among Buffett's Dow stocks. The company has increased its dividend for 37 consecutive years, making it an attractive choice for income investors.

5. Amazon (AMZN 2.39%)
Buffett owns a small stake in Amazon, with the e-commerce giant making up less than 1% of Berkshire's portfolio. Amazon has a forward dividend yield of 0%, as the company prioritizes growth over dividend payments. However, its strong earnings growth and dominant market position make it an attractive long-term holding.

6. Visa (V 0.75%)
Visa is another small holding in Buffett's portfolio, with the financial services company making up less than 1% of Berkshire's portfolio. Visa has a forward dividend yield of 1.2%, which may not appeal to income investors. However, the company's strong earnings growth and dominant market position make it an attractive long-term holding.

In conclusion, Warren Buffett's six Dow stocks offer attractive income opportunities for investors. Among these, Chevron stands out as the best pick for income investors, with its high forward dividend yield of 4.05% and a 37-year history of consecutive dividend increases. However, income investors can also consider Coca-Cola, with its 3.1% forward dividend yield and 62-year streak of consecutive dividend increases. Both stocks offer strong income potential and are well-suited for long-term holdings in an income-focused portfolio.