2 Warren Buffett Dividend Stocks to Buy Now

For nearly six decades, Warren Buffett has generated wealth-building gains for Berkshire Hathawayhis shareholders. Savvy investors thus look to Berkshire’s $315 billion portfolio for clues about how to invest their own money.

If you’re looking for some great dividend stocks to buy today, here are two of Buffett’s favorites.

Coca cola

Berkshire Hathaway bought Coca colahis (K.O 0.35%) stock in 1988. In the more than three decades since then, the investment giant’s holdings in the beverage leader have grown to $28 billion.

Don’t make the mistake of thinking of Coca-Cola as just a soda company. The $300 billion behemoth has a vast selection of product offerings. Management has wisely expanded into healthier segments such as milk, tea, coffee, juice and mineral infused water in recent years. Fairlife, Fuze Tea, Costa Coffee, Minute Maid and Aquarius are among the drinks maker’s ever-growing collection of brands.

In addition to the strength of its brands, Coca-Cola’s competition is supported by its expertise in marketing and distribution. With operations around the world, it is able to recognize and respond to changing consumer trends faster than many of its competitors.

With a proven history of successful new product launches and acquisitions, this powerful business has successfully grown sales and profits for decades – and will likely continue to do so for many years to come. In total, Coca-Cola has increased its cash payout to its shareholders for a remarkable 62 consecutive years. The strong dividend stock currently offers a solid 2.7%.

Occidental Petroleum

If you’re more interested in learning about one of Buffett’s recent purchases, you’ll want to check it out Occidental Petroleum (OXY -0.11%). Berkshire has loaded up on the energy leader’s stock over the past year. The investment conglomerate now owns nearly 30 percent of Occidental, a stake valued at nearly $15 billion.

Berkshire also acquired $10 billion worth of preferred stock and warrants to buy an additional 80 million common shares as part of its move to help Occidental finance its merger with Anadarko Petroleum as early as 2019. The deal strengthened the oil and gas company’s assets in the Permian Basin and made it one of the largest energy producers in the US

Occidental, in turn, benefited from higher oil prices. The company’s free cash flow rose to $1.3 billion in the second quarter, up from $1 billion in the year-ago period.

However, Occidental is much more than just an oil driller. Its forward looking management team is taking steps to ensure that Occidental will be a formidable player in the rapidly expanding carbon management industry.

As a leader in enhanced oil recovery techniques, Occidental has more than 40 years of experience using carbon dioxide to increase the profitability of its energy production operations. This know-how, combined with the company’s consolidated CO2 infrastructure, should give it a strong competitive advantage in the carbon capture, use and storage (CCUS) market.

Occidental is developing a process that can remove carbon from the atmosphere. The carbon can then be used for other purposes, such as the production of biofuels, or permanently stored underground. Occidental plans to license this technology to partners who will build carbon capture plants. CEO Vicki Hollub believes that one day there will be more than 1,000 of these eco-friendly facilities operating around the globe.

In addition to the environmental benefits, the potential profits are enormous. ExxonMobil estimates that the market for carbon sequestration services could grow to $4 trillion by 2050. Occidental, for its part, believes its nascent carbon management business could rival its lucrative oil and gas operations in just 15 years.

Western investors can thus expect higher dividends to be directed in the coming years. Shares of this innovative energy producer are yielding more than 1.5% today.