32% of Warren Buffett's $281 Billion Berkshire Hathaway Portfolio Is Invested in These 2 S&P 500 Dividend Stocks

Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett has steered his company to market-crushing performance over multiple decades -- so much so that he has earned the nickname "the Oracle of Omaha." When he steps down from his role as the company's chief executive at the end of this year, it will mark the close of one of the most fantastic corporate leadership runs in history.

Under Buffett's tenure as Berkshire Hathaway's CEO, the company has never paid a dividend. Notably, the Oracle of Omaha has preferred to use the company's excess capital to make new acquisition moves, buy back shares of its own stock, or invest in bonds that also reliably generate income. But even though Berkshire is not a dividend-paying stock, the company's investment portfolio is heavily weighted toward companies that do return cash directly to shareholders. In fact, just two S&P 500 dividend stocks account for roughly 32% of Berkshire Hathaway's total public stock portfolio.

Read on as two Motley Fool contributors explain why Buffett and Berkshire have put so much faith in this pair of income-generating companies.

Image source: The Motley Fool.

1. Apple's dominance and focus helps it continue to lead

Jennifer Saibil: Buffett began buying Apple (NASDAQ: AAPL) stock in 2016, and although Berkshire sold off about half of its Apple holdings last year, it's still the largest position in the Berkshire Hathaway portfolio at 21.4%.

The stock pays a dividend yielding 0.5%, and Apple has raised its payout annually for 13 years running. Apple was recently inducted into the group of stocks Buffett said he'd never fully sell, although he's leaving at the end of the year, and that could change under new leadership. Buffett has praised Apple many times for its strong management and incredible brand, and at this year's annual meeting just a few weeks ago, Buffett cracked that CEO Tim Cook has made Berkshire Hathaway shareholders more money than he ever has. While that's just humor, it indicates the esteem in which Buffett holds Cook and Apple's business.

Apple has created an ecosystem of interconnected devices with a strong user experience in mind. People who switch to Apple's products often never look back, but they continue to invest in other Apple devices and typically upgrade to new launches. That's a steady revenue stream coming from loyal fans who line up to buy the latest products.

Although this goes for the entire business, iPhones are Apple's biggest segment, accounting for about half of total sales. Investors were disappointed with iPhone sales growth in the 2025 fiscal second quarter (ended March 29), which was 2% year over year. But Apple still has the lead in smartphones, with about 27% of the market. Smartphones are still a growing industry, expected to increase at a compound annual growth rate of 3.76% through 2029, according to Statista.

Apple has its own generative artificial intelligence (AI) business called Apple Intelligence. It offers a powerful package of premium features that are free with Apple products and are in the palm of your hand with iPhones. Apple's been very careful about releasing its AI, but there's no question that it's going to be a major part of the company's growth strategy going forward. Cook said that in countries where Apple Intelligence has already rolled out, iPhone sales were stronger in the second quarter. The company has a broad, holistic approach to launching the AI throughout the ecosystem, reinforcing its branding and focus on the user experience.

It's still unclear how iPhones will be impacted by new tariffs, and the company is trying to diversify its sourcing to avoid being hit too severely. Although it could feel short-term pressure, the company's dominance and focus on what matters make it likely that it will continue to lead for the foreseeable future.

2. Coca-Cola is a reliable winner for Berkshire

Keith Noonan: Buffett has famously said that he would never sell a share of Coca-Cola (NYSE: KO) stock, and recent portfolio realignment moves at Berkshire have made it the investment conglomerate's third-largest overall stock holding. Coke accounts for roughly 10.2% of Berkshire's public stock portfolio, and it's been a reliable winner for Buffett through the years. It's not hard to see why Buffett is such a big fan of the company.

Coca-Cola has a fantastic portfolio of beverage products that reliably generate billions of dollars in sales. Even as consumption trends changed and consumers purchased less soda, the company managed to serve up reliable earnings growth. It managed this feat through pricing increases enabled by its unsurpassed brand strength and by branching into new product categories.

Coca-Cola also has one of the best supply chain and distribution networks of any company in the consumer goods sector. The good news for investors is that the company will likely be able to deliver continued efficiency improvements that help pave the way for margin expansion.

While Coke isn't usually thought of as an AI stock, the beverage giant will likely see some significant tailwinds tied to the revolutionary tech trend. Factory and warehouse automation have the potential to significantly lower the company's operating costs over time.

Coca-Cola has one of the best track records of dividend payout growth of any stock on the market. The company has delivered an annual payout increase for 63 years running. With its yield sitting at roughly 2.8% as of this writing, Coke pays a solid dividend -- and investors can look forward to shares purchased at today's prices paying a bigger yield over time.

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Jennifer Saibil has positions in Apple. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.