If a Recession Comes, 4 High-Yield Warren Buffett Stocks Are Safe Havens

If any investor has stood the test of time, it is Warren Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world, and his annual Berkshire Hathaway shareholders meeting draws thousands of loyal fans who are investors. They were stunned at this year’s meeting when Buffett announced that he is stepping down at the end of the year as CEO of the investment giant. While he will remain chair of the board and continue to have a voice in the day-to-day operations, his pre-announced successor, Greg Abel, will assume the CEO position at the end of the year.

While Wall Street appears divided on recession risks for the next year, recent developments and some uncomfortable data are showing heightened economic concerns. The consensus is cautious pessimism, with Wall Street increasingly concerned about policy impacts, particularly tariffs, combined with already weak economic data. While not unanimous, the trend has shifted toward expecting a recession sometime in 2025.

If that’s the case, then now may be the right time to move from higher beta tech stocks to more conservative dividend stocks that reside in the Berkshire Hathaway Inc. (NYSE: BRK-B) portfolio. With all of the major indices at or near all-time highs, caution makes sense as we head into the seasonally treacherous fall months. We screened Buffett’s holdings, and four high-yield dividend stocks are ideal moves now. Three of the four are rated Buy at the top firms we cover on Wall Street.

Why do we cover Warren Buffett’s stocks?

There are few investors with the results and reputation that Buffett has garnered over the past 50 years. While investing has evolved over the past half-century, buying good companies with products and services recognized worldwide, while paying dividends, will always remain a timeless approach.

Chevron

Chevron Corp. (NYSE: CVX) is an American multinational energy company that is predominantly specialized in oil and gas. This integrated giant is a safer option for investors looking to position themselves in the energy sector and pays a substantial dividend, which was raised by 5% earlier this year. Chevron operates integrated energy and chemicals businesses worldwide through two segments.

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines, and transportation, storage
• Marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum products
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.

Chevron announced in late 2023 that it had entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion. The Federal Trade Commission approved the deal last October, and it is expected to close this fall.

UBS has a Buy rating with a huge $197 target price.

Coca-Cola

Coca-Cola Co. (NYSE: KO) is an American multinational corporation founded in 1892. This company remains a top long-time holding of Buffett. He owns a massive 400 million shares that are up a solid 11% in 2025. Coca-Cola is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands.

Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands, including:

• Diet Coke
• Coca-Cola Light
• Coca-Cola Zero Sugar
• Caffeine-free Diet Coke
• Cherry Coke
• Fanta Orange
• Fanta Zero Orange
• Fanta Zero Sugar
• Fanta Apple
• Sprite
• Sprite Zero Sugar
• Simply Orange
• Simply Apple
• Simply Grapefruit
• Fresca
• Schweppes
• Dasani
• Fuze Tea
• Glacéau Smartwater
• Glacéau Vitaminwater
• Gold Peak
• Ice Dew
• Powerade
• Topo Chico
• Minute Maid

Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees, juices, and juice drinks.

Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of over 1.9 billion servings per day. It is also important to remember that the company owns 16% of Monster Beverage Corp. (NASDAQ: MNST), which continues to deliver strong financial results.

UBS has assigned a Buy rating and set a $84 target price.

Kraft Heinz

Kraft Heinz Co. (NYSE: KHC) is North America’s third-largest food and beverage company and fifth-largest globally. Even in bad times, everybody has to eat, and this company always stands to benefit while paying a tremendous dividend. Kraft Heinz was formed via the merger of H.J. Heinz and Kraft Foods and manufactures and markets food and beverage products worldwide through its eight consumer-driven product platforms:

• Taste Elevation
• Easy Ready Meals
• Hydration
• Meats
• Cheeses
• Substantial Snacking
• Desserts
• Coffee and other grocery products

The company has two reportable segments defined by geographic region: North America and International Developed Markets.

Its other segments, consisting of West and East Emerging Markets (WEEM) and Asia Emerging Markets (AEM), are combined and disclosed as Emerging Markets. It manufactures its products from a wide variety of raw materials.

Kraft Heinz brands include:

• Kraft
• Oscar Mayer
• Heinz
• Philadelphia
• Lunchables
• Velveeta
• Ore-Ida
• Capri Sun
• Maxwell House
• Kool-Aid
• Jell-O
• Golden Circle
• Wattie’s
• Plasmon
• ABC
• Master
• Quero
• Pudliszki

The company’s products are sold through its sales organizations and independent brokers, agents, and distributors.

Kraft Heinz is evaluating a potential spin-off of a significant portion of its grocery business, encompassing slower-growing brands like Velveeta, Oscar Mayer, and Jell-O, into a separate entity that could be worth $20 billion. The move aims to “unlock shareholder value” by allowing a more focused, high-growth “RemainCo” centered on premium brands such as Heinz ketchup and Philadelphia cream cheese to pursue innovation and international expansion. In contrast, the divested business could pursue its own strategic direction. Many on Wall Street feel that this could be a huge positive for shareholders, citing spin-offs at General Electric and AT&T in the past.

UBS has a Neutral rating with a $30 target price.

Kroger

This grocery chain giant is a consistently solid and conservative investment. Kroger Co. (NYSE: KR) is an American retail company that operates supermarkets and multi-department stores throughout the United States. It operates combination food and drug stores, multi-department stores, marketplace stores, and price-impact warehouses.

Its combination of food and drug stores offers:

• Natural food and organic sections
• Pharmacies
• General Merchandise
• Pet centers
• Fresh seafood and organic produce

Multi-department stores offer:

• Apparel
• Home fashion and furnishings
• Outdoor living
• Electronics
• Automotive products
• Toys

The company’s marketplace stores offer:

• Full-service grocery, pharmacy, health, and beauty care
• Perishable goods, as well as general merchandise, including apparel, home goods, and toys
• Price-impact warehouse stores sell groceries, health and beauty care products, meat, dairy, baked goods, and fresh produce

The company also manufactures and processes food products in its supermarkets and online; it sells fuel through 1,613 fuel centers.

 Jefferies has a Buy rating with an $83 price objective.

Four Safe Buy-Rated High-Yield Dividend Stocks Under $10

 

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