Investing $25,000 in These 2 Warren Buffett Stocks Will Generate $1,200 in Annual Passive Income
Investing can be extremely volatile, as experienced this year when the market fell into bear market territory from its highs in February. After recouping those losses it's now approaching near all-time highs.
That's why investors may want to consider adding some dividend stocks that can generate reliable passive income each year. There's no better place to look than in the portfolio of Berkshire Hathaway, the conglomerate run by Warren Buffett that has generated market-crushing returns for over six decades. Investing $25,000 in these two Warren Buffett stocks will generate roughly $1,200 in annual passive income.
Chevron: 4.77% dividend yield
Buffett and his team of investors have been piling into oil and gas stocks in recent years. One of those is the Houston, Texas-based Chevron (NYSE: CVX), which is now the fifth-largest position in Berkshire's massive $283 billion equities portfolio, making up 6% of the portfolio.
Chevron operates extensive upstream and downstream oil operations with a significant presence in the Permian Basin, and plans to ramp up wells and other projects worldwide. In the Permian Basin, Chevron is projecting 5% to 6% compound annual growth in oil production, along with declining capital expenditures that will lead to $2 billion of free cash flow growth by 2026.
Overall, Chevron expects to increase total free cash flow by $9 billion by 2026, assuming Brent Crude Oil per barrel is in the $60 range. Chevron also hopes to further integrate alternative sources of energy in its business, like renewables, hydrogen, and carbon capture and storage, while lowering the carbon intensity of its downstream operations.
In addition, the company is a proven dividend payer, having increased its dividend for 38 straight years and paying an extremely healthy dividend yield of nearly 4.8%. With a 12-month trailing free cash flow yield of nearly 5.3%, Chevron can cover its dividend. Remember, the company expects to significantly increase free cash flow between now and 2026. Furthermore, Chevron is repurchasing $10 billion to $20 billion in stock per year, which is also a way to return capital to shareholders.
Sirius XM: 4.80% dividend yield
The large digital audio operator Sirius XM (NASDAQ: SIRI) has been a dismal investment over the last five years, with the stock down about 59%. The company, which owns Sirius Satellite Radio and the Pandora streaming service, has struggled to grow subscribers amid rising competition from major players like Spotify.
However, Buffett and his team are betting big that management can right the ship, buying up over 35% of outstanding shares. Sirius' management team has a long-term plan to grow subscribers from 40 million to 50 million and free cash flow by 50% from $1.2 billion to $1.8 billion. The plan involves building new in-car technology and launching a new pricing structure. Management also plans to grow its advertising business and has purchased the exclusive advertising and distribution rights of several big-name podcasts.
Seaport Global analyst David Joyce earlier this year noted the company is a relatively safe pick for investors concerned about tariffs because it has a sticky subscriber base of mainly U.S. consumers. Furthermore, ad revenue still only makes up 20% of Sirius' business and could provide a runway for growth.
The company has a high dividend yield of 4.8% and has paid and increased its dividend every year since 2016. Sirius' trailing-12-month free cash flow yield in excess of 12% should make the dividend easy to cover and increase each year, and Sirius is also conducting share repurchases. The turnaround will require patience, but management has a plan; the stock is cheap, trading at less than 8 times forward earnings, and investors will be well compensated while they wait.
Should you invest $1,000 in Chevron right now?
Before you buy stock in Chevron, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!*
Now, it's worth noting Stock Advisor 's total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of June 23, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
24 minutes ago
- Globe and Mail
3 Magnificent S&P 500 Dividend Stocks Down 25%+ to Buy and Hold Forever
Despite some volatility earlier this year, the S&P 500 has rallied about 10% over the last 12 months. However, while most stocks are up in the past year, several have missed the market's current rally. Alexandria Real Estate Equities (NYSE: ARE), Oneok (NYSE: OKE), and PepsiCo (NASDAQ: PEP) are currently down more than 25% from their 52-week highs. The silver lining to their sell-offs is that dividend yields move in the opposite direction of stock prices. Because of that, they currently offer much higher yields. With magnificent records of growing their payouts, they're great stocks to buy and hold for a potential lifetime of dividend income. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » A healthy dividend Alexandria Real Estate Equities' stock price has tumbled over the past year due to slowing demand for lab space. As a result, the healthcare REIT 's yield has risen above 7%. However, the life science real estate pioneer has one of the largest and highest-quality portfolios in the sector, leased to a leading tenant group. Because of that, it generates durable and high-quality cash flows, 57% of which it pays out in dividends. That conservative payout ratio enables it to retain meaningful excess free cash flow to fund development projects. Alexandria also has a fortress balance sheet, giving it significant financial flexibility. Alexandria is investing heavily in developing and redeveloping more lab space for the life science sector. These projects will supply it with incremental streams of durable rental income as they stabilize in the coming years. That should enable the REIT to continue increasing its dividend. It has grown its payout at a 4.5% average annual rate over the past five years. A lot of fuel to continue growing Oneok's stock price has tumbled due in part to lower oil prices. That has driven up the energy midstream company's dividend yield to around 5%. However, the pipeline company has demonstrated the durability of its integrated midstream platform over the years. It has grown its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 11 straight years (and at an impressive 16% annualized rate), which included two significant oil market downturns. Fueling that growth has been a combination of organic expansion and value-enhancing acquisitions. Oneok's durable midstream business model has enabled it to deliver more than a quarter century of dividend stability and growth. While the pipeline company hasn't increased its payout every single year, it has nearly doubled its payment over the past decade. The company is targeting to increase its dividend by 3% to 4% annually in the future. It should have plenty of fuel to achieve that target. Oneok expects to continue benefiting from a recent string of acquisitions, which should continue boosting its bottom line through 2027 as it captures deal synergies. In addition, the company has several expansion projects underway, including an export terminal and related pipeline that should enter commercial service in early 2028. A satisfying income stream PepsiCo's stock slump has pushed the food and beverage giant's dividend yield up toward 4.5%. That's a tasty yield for a company with PepsiCo's magnificent dividend-growth track record. It recently extended its growth streak to 53 straight years, keeping it in the elite group of Dividend Kings. The company should have plenty of pop to continue pushing its payout higher. It's investing heavily to organically grow its revenue and bolster its margins through product innovation and productivity enhancements. PepsiCo anticipates these investments will drive 4% to 6% annual organic revenue growth and high-single-digit earnings-per-share (EPS) increases over the long term. PepsiCo also has a strong balance sheet, which it's using to accelerate the transformation of its portfolio toward healthier options. It recently closed its $1.7 billion deal for healthier soda maker Poppi and acquired Siete and Sabra. These deals should enhance its ability to continue increasing its dividend in the future. A great time to buy these top dividend stocks Shares of Alexandria Real Estate Equities, Oneok, and PepsiCo have sold off over the past year. Because of that, these magnificent dividend growth stocks currently offer much higher yields. With more growth ahead, they're great dividend stocks to buy and hold for a potential lifetime of income. Should you invest $1,000 in PepsiCo right now? Before you buy stock in PepsiCo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PepsiCo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor 's total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 23, 2025
National Post
an hour ago
- National Post
EXCLUSIVE: With digital tax scrapped, U.S. ambassador says he's 'confident we will have an agreement'
OTTAWA — With Canada's digital services tax now scrapped, a free trade deal between Canada and the Unites States is just a question of time, United States Ambassador Pete Hoekstra told National Post today. Article content In an exclusive interview, Hoekstra said he's not sure if trade talks between the two North American neighbours can be resolved by July 21, a target agreed to by the two sides when they met in mid-June in Kananaskis, Alta. But the ambassador said he's very confident that a deal will get done. Article content Article content Article content 'We will get to an agreement. The only question is how long will it take,' he said during an interview. 'I'm confident we will have an agreement.' Article content Article content Hoekstra emphasized that free trade between Canada and the U.S. is good for both countries, but that policies such as Canada's now-defunct digital services tax are irritants that get in the way. Article content He said the tax, however, was not the only trade irritant irking the U.S. Others include provincial policies that have pulled American alcohol off store shelves and other anti-competitive measures that make it difficult for U.S. companies to compete in this market. U.S. President Donald Trump has also made it clear that he doesn't like Canada's supply management policies towards the dairy and poultry industries because they make it difficult for American producers to compete in the Canadian market. Article content 'There's lots of issues that need to be covered. Some of them are going to be tougher than others,' Hoekstra said. 'The important thing is that this really sets the table.' Article content Article content Prime Minister Mark Carney told reporters on Monday that he had always expected the digital services tax to be a casualty of the trade negotiations with the U.S., so it was pointless for the government to collect that tax revenue. Article content 'It's something that we expected, in the broader sense, that would be part of a final deal,' said Carney, without explaining why the decision to scrap the tax was made only hours before it came into effect at midnight on Sunday. Article content 'It doesn't make sense to collect tax from people and then remit them back, so it provides some certainty. And as I just said, negotiations have restarted. We're going to focus on getting the best deal for Canadians. We're making progress,' said Carney. Article content Canada's digital services tax was considered a big deal to the U.S., Hoekstra said, because it unfairly targeted American big tech companies. The tax was raised consistently by the U.S. in every recent conversation about trade, he added. Article content But Carney called Trump Sunday to say that he would be cancelling the tax, just two days after Trump insisted that the U.S. would walk away from trade talks with Canada and impose retaliatory tariffs if the tax wasn't killed. The first digital services tax payments were due Monday, although they were to be retroactive to 2022.
Globe and Mail
an hour ago
- Globe and Mail
What Makes FortiGate the Core Driver of Fortinet's Product Growth?
Fortinet 's FTNT FortiGate platform remains central to its secure networking strategy. As the first product for most customers, FortiGate firewalls help drive hardware adoption and make it easy to expand into other solutions. Powered by Fortinet's FortiASIC chips and unified FortiOS software, FortiGate delivers strong performance, simpler management and lower energy use. These strengths have supported wide adoption and helped Fortinet grow its market share. Customers often begin with FortiGate and later integrate Fortinet's switches, access points or software offerings through FortiLink and FortiOS. Large enterprise wins, such as an eight-figure deal with a Fortune 500 company in the first quarter of 2025, highlight the increasing stickiness of FortiGate-driven customer relationships. Fortinet launched the FortiGate 700G series in May, a high-performance firewall designed for mid-sized businesses and distributed enterprises. This new model delivers a 5-10 times performance boost over competitors and strengthens Fortinet's value proposition by combining performance with energy efficiency and low total cost of ownership. The company believes continued product innovation and deeper enterprise penetration will fuel near-term top-line growth. In the first quarter of 2025, product revenues, which accounted for 30% of total revenues, grew 12% year over year to $459 million. FortiGate hardware outpaced overall product growth, expanding in the mid-teens and remaining Fortinet's primary product driver. Our model estimate for 2025 product revenues is pegged at $2.14 billion, indicating 12.3% growth year over year. FTNT Faces Stiff Competition in the Firewall Space Fortinet faces increasing competition from Palo Alto Networks PANW and Check Point Software CHKP, both of which are seeing strong adoption of their firewall capabilities. In the third quarter of fiscal 2025, Palo Alto Networks saw 20% year-over-year growth in its Software Firewall ARR, driven by public cloud deployments. As AI accelerates cloud adoption, Palo Alto Networks' long-term demand for software firewalls is likely to expand. It is also seeing stable demand for its firewall appliances. In the first quarter of 2025, Check Point Software saw strong demand for its Quantum Force firewall appliances, which drove a 14% year-over-year rise in product and license revenues. Check Point Software expects this firewall momentum to continue through 2026, as customers increasingly adopt its next-generation appliances amid broader infrastructure refresh cycles. FTNT's Share Price Performance, Valuation and Estimates FTNT shares have risen 11.1% in the year-to-date (YTD) period, underperforming the Zacks Security industry's growth of 23.4%. FTNT has outperformed the Zacks Computer and Technology sector's return of 6.1%. FTNT's YTD Price Performance From a valuation standpoint, Fortinet stock is currently trading at a Price/Book ratio of 40.17X compared with the industry's 24.88X. FTNT has a Value Score of F. FTNT Valuation Image Source: Zacks Investment Research The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at 59 cents per share, unchanged over the past 30 days, indicating 3.51% year-over-year growth. Fortinet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Check Point Software Technologies Ltd. (CHKP): Free Stock Analysis Report Fortinet, Inc. (FTNT): Free Stock Analysis Report Palo Alto Networks, Inc. (PANW): Free Stock Analysis Report
