Chevron, a major player in the oil industry, stands out for its high dividend yield. The company pays investors $1.71 per share each quarter, or $6.84 annually. The stock, which has recently been trading in the low $140s, translates to a strong 4.9% dividend yield.
A resilient business model supports Chevron’s dividend. The company has the lowest break-even level for its upstream business in the industry at around $30 a barrel. With oil prices in the $60s, Chevron can generate enough cash to cover its dividend payments and capital spending.
The company’s balance sheet also supports its stability. Chevron closed the first quarter with a net debt ratio of 14%, which is low compared to its peers. This strong balance sheet allows Chevron to invest in growth and return cash to shareholders, even during lower oil prices.
Chevron has increased its dividend for 38 consecutive years. We’ve grown our dividend for 38 straight years, through multiple commodity cycles, leading our peers in growth over the last decade,” said CFO Eimear Bonner during the company’s first-quarter earnings call. Chevron plans to increase its oil and gas production at a compound annual rate of 6% through next year.
The company estimates that its investment in high-margin output will generate an additional $9 billion in free cash flow by next year, assuming oil prices remain at $60 per barrel. Chevron’s growth prospects extend into the future, with ongoing production growth expected in several regions. We’re also expanding our pipeline of future opportunities,” stated CEO Mike Wirth.
Chevron has added more than 11 million net exploration acres since the start of last year and is advancing projects in various areas. Its potential acquisition activities further bolster its growth strategy. The company is confident about a favorable outcome in an arbitration hearing regarding a stake in an offshore oilfield in Guyana.
Chevron is a strong dividend stock for those seeking passive income. Its high-yielding dividend, backed by a solid business model and financial footing, promises continued growth. Investors can enjoy a lucrative stream of passive dividend income by purchasing shares of Chevron.
The Coca-Cola Company, an American multinational beverage company, is a long-time investor favorite. Its iconic brand and loyal global customer base enable the company to grow revenues steadily, even during periods of economic uncertainty. Despite macroeconomic pressures, The Coca-Cola Company continued to deliver in Q1 2025.
The company reported a 2% increase in global sales volumes and a 6% rise in organic revenue. Between 2021 and 2024, its revenue grew from $38.6 billion to $47.06 billion, while gross profit surged from $23.3 billion to $28.6 billion. The Coca-Cola Company’s value proposition becomes even more compelling in recessionary environments.
Chevron’s high-yield dividend sustainability
Its products remain in demand when consumers cut back on premium spending. CEO James Quincey noted that the company’s “all-weather strategy” delivers resilient results despite economic and geopolitical uncertainties.
The Coca-Cola Company has increased its dividend for 63 consecutive years. In FY2024, it generated $6.8 billion in operating cash flow and $4.7 billion in free cash flow, returning $9.4 billion to shareholders in dividends. While the current dividend yield of 2.85% might not be the highest, it reflects remarkable consistency.
In an uncertain market, Coca-Cola’s stability, consistent cash flow, and long history of dividend growth make it a strong candidate for any income-focused portfolio. Warren Buffett’s company, Berkshire Hathaway, has famously eschewed paying dividends. However, Buffett enjoys receiving dividends from the companies Berkshire invests in.
Here are three top options for those who like Buffett’s style but also want reliable dividend income:
1. Chevron
Berkshire Hathaway holds more than 118.6 million shares of Chevron, representing 6.8% of the oil company’s outstanding shares, worth over $16.3 billion. Chevron currently offers a dividend yield of nearly 5%.
Chevron has increased its dividends for 38 consecutive years, even through volatile oil markets. The company boasts one of the most resilient portfolios in the oil sector, with a break-even oil price of around $30 per barrel. Chevron’s strong financial foundation, highlighted by its low leverage ratio of 14%, makes its dividend very sustainable.
2. Coca-Cola
Coca-Cola is Berkshire Hathaway’s third-largest holding, constituting 10.1% of its investment portfolio. Berkshire owns 400 million shares, or 9.3% of Coca-Cola’s outstanding stock, valued at over $28.6 billion.
Coca-Cola has been a steady dividend payer for years. Recently, it increased its dividend by 5.2%, marking its 63rd consecutive year of dividend increases. The payout currently yields about 2.9%. This dividend is well-supported by the company’s expected free cash flow of approximately $9.5 billion this year.
3. Kraft Heinz
Kraft Heinz ranks as Berkshire’s eighth-largest holding, with Berkshire owning over 325 million shares, or 27.5% of the food company’s outstanding stock, valued at more than $9 billion. Kraft Heinz offers a high-yielding dividend of 5.7%.
Last year, Kraft Heinz generated $3.2 billion in free cash flow after capital expenditures, a 6.6% increase from the previous year. This easily covered the $2.7 billion returned to investors via dividends and share repurchases. Kraft Heinz is focused on returning to growth, positioning itself to generate even more free cash flow.
While Warren Buffett’s company doesn’t pay dividends, it enjoys collecting dividend income from its investments. This strategy has allowed Berkshire Hathaway to benefit from the reliable cash flow of its portfolio companies, making it an attractive model for individual investors looking for dividend income.
