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3 Warren Buffett ASX dividend shares to buy right now

warren buffett

I think Warren Buffett is one of the world’s best investors. Berkshire Hathaway doesn’t pay a dividend, but he likes to invest in shares that do pay a dividend. I think there are some ASX dividend shares that could be worth buying.

Here are some great income ideas that could be worth buying during these coronavirus times:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) 

Soul Patts is often described as the Australian version of Berkshire Hathaway. It invests in both listed and unlisted businesses & assets.

Some of the ASX shares that it’s invested in include TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW) and Clover Corporation Limited (ASX: CLV). Some of its unlisted investments include swim schools and agriculture.

Warren Buffett’s preferred holding period for shares is forever. I think Soul Patts is well placed to keep growing for decades to come and it has already been around for over 100 years.

As a bonus it has a grossed-up dividend yield of 4.7%. This dividend has increased every year since 2000. The dividend is purely funded by the investment income it receives, less expenses.

APA Group (ASX: APA) 

APA Group is an ASX energy infrastructure giant. I think Warren Buffett would really like this share because Berkshire Hathaway Energy is one of the US business’ biggest divisions.

It owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.

APA is actually looking for opportunities in the US which would be a good way to strengthen and diversify earnings further.

The energy giant currently offers a distribution yield of 4.4%.

Duxton Water Ltd (ASX: D2O) 

I think Warren Buffett’s share choices and his previous comments show he likes investing in businesses that are ‘essential’ for western life like Apple, energy and insurance.

Water is an integral part of the agriculture process for farmers. Duxton Water provides access to water entitlements which can either be leased for multiple years or it can provide short-term access.

The amount of water that is now leased means Duxton Water’s board has been confident enough to project growing dividends for the next two years.

I calculate that based on the next 12 months of dividends the forward grossed-up dividend yield is 6.25%.

Which Warren Buffett ASX dividend share is best?

I think APA looks fairly priced now, so I wouldn’t call it a buy. Soul Patts is the one with the best dividend record and I believe it’s the one that’s most like Berkshire Hathaway. So Soul Patts would be the one I’d go for as a Warren Buffett ASX dividend share.

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Returns As of 6th October 2020

Tristan Harrison owns shares of DUXTON FPO and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool Australia has recommended DUXTON FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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