Warren Buffett will earn over $1.33 billion this year by investing in these 2 high-yield dividend stocks

Warren Buffett and his company Berkshire Hathawaynever paid any dividends, mainly because Buffett has always believed that he could deploy capital in a more beneficial way for shareholders. Over sixty years, Omaha's Oracle proved this paper. But that doesn't mean that Buffett and his team of investors don't like investing in stocks that pay dividends. After all, it's better than knowing that every year's investment generates passive income, even if their stocks aren't always as good as expected? This year, Buffett and Berkshire will receive more than $1.3 billion in passive income from their investments in the two stocks.

Buffett and Berkshire have expressed strong interest in domestic U.S. oil and energy producers in recent years. Even if the price per barrel remains soft, Buffett clearly believes that oil and gas will continue to demand and prices will eventually rise. This paper leads Berkshire to purchase more than 118.6 million shares Herringbone (NYSE: CVX)At the end of the year, the company was slightly below 6% of Berkshire's portfolio. This also gives Chevron Berkshire the fifth largest equity holding.

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Chevron paid a quarterly dividend of $1.71 per share in the first two quarters of the year and is currently paying a dividend yield of about 5%. Assuming this continues, and assuming Berkshire owns a stake in the company Constant, then this year, Berkshire will receive a dividend of nearly $811.3 million.

The Houston, Texas-based company has a good dividend record. Chevron raised its quarterly dividend by 5% this year, marking the 38th consecutive year that the company has increased its annual dividend. Free cash flow in the first quarter of 2025 was below normal at $1.3 billion, but not including working capital, which could be the company's quarterly volatility with free cash flow of $3.7 billion, enough to cover the $3 billion dividend paid this quarter.

Additionally, management of the company's first-quarter yield rate said that assuming oil is $70 per barrel, growth projects are expected to generate an additional $10 billion in free cash flow in 2026. Management also said their priority is to increase the dividend, so if oil prices fall, management has to return capital returns and they will reduce their share buybacks before dividends.

Many investors who follow Buffett know his history very well Kraft Heinz (Nasdaq: KHC). Berkshire, in partnership with Brazilian private equity firm 3G, purchased Heinz for more than $23 billion in 2013, and then oversaw the 2015 merger with Kraft to form today’s company. Since then, the stock has been crushed. Investors have said over the years that Kraft Heinz is probably one of Buffett’s worst investments.

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YCHARTS' KHC data

In fact, some speculate that Berkshire may sell some of its positions, and two Berkshire's representatives on Kraft Heinz's board will leave the board. Kraft Heinz also said the company is evaluating strategic alternatives to unlock shareholder value, which could mean selling several units within the company.

Kraft Heinz has paid dividends over the past decade, although the company cut its dividend significantly in 2019 to help pay off debts and has never raised its dividend since. Nevertheless, Kraft Heinz's dividend yield is over 6%. Assuming Berkshire maintains its position as more than 325.6 million shares, the company will receive more than $521 million in dividends this year.

Kraft Heinz's trailing 12-month free cash flow yield is close to 9.5%, with Wall Street analysts expecting free cash flow per share this year, which easily covers the expected dividend of $1.60 per share. While this isn't the most exciting stock, strategic alternatives may indeed unlock value, and dividends now look safe.

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Bram Berkowitz has no position in any of the stocks mentioned. Motley fool has a place and recommends Berkshire Hathaway and Chevron. Motley Fool recommends Kraft Heinz. Motley Fool has a disclosure policy.

Warren Buffett will earn more than $1.33 billion this year by investing in these two high-yield dividend stocks