It takes a lot of time to find a gem. That’s why following the trades of billionaire investors can be worthwhile, as it narrows down the more than 3,750 stocks that are currently traded to a more manageable number.

That doesn’t mean you should blindly follow their trades, as you still should do your own research to make sure the stock is a good fit for your portfolio. Yet, you can often see patterns in their investing ideas. Many times, those patterns lead to dividend stocks.

Since income-generating stocks have a long history of outperforming non-payers, it’s natural the smart money would gravitate toward this type of investment. Even though Warren Buffett won’t let Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) pays a dividend, he loves it when the stocks he owns do.

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With that in mind, here are three dividend stocks money managers love and were buying in the fourth quarter.

Lockheed Martin (LMT)

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There were probably more sellers than buyers of Lockheed Martin (NYSE:LMT) stock in Q4, but CEO Tom Gayner of Markel (NYSE:MKL) was buying 45,500 shares at an average price of $465 per share. The purchase represented a five-fold increase in the number of shares the company held.

Lockheed Martin is the world’s biggest defense contractor with $67.6 billion in annual revenue, virtually all of it comes from government contracts. The number of active global conflicts has grown over the past few years, from the war in Ukraine to the Middle East. The U.S. government is supplying the combatants in these hot spots and drawing down the U.S. military’s own stockpile. That means business is booming for Lockheed and will be for years to come.

The defense contractor reported it had record backlog of $160.6 billion at the end of December. Lockheed only needed to spend $1.5 billion on research and development, and another $1.5 billion on capital expenditures, to maintain its operational machine.

You can buy LMT stock now at a lower price than Gayner’s average buy-in cost, which makes it a good bet on future growth. With a dividend yielding 2.9% annually, Lockheed Martin is a solid choice to buy.

McDonald’s (MCD)

Source: Retail Photographer / Shutterstock.com

Fast food giant McDonald’s (NYSE:MCD) was once a place you could get tasty food at a good price, but inflation is eroding that reputation. Pundits try to tell you inflation is coming down but that’s absent volatile areas like food and fuel.

Last month, the Bureau of Labor Statistics showed the unadjusted cost of food away from home was soaring 5.1%, compared to last year. As food is such an essential component of a family’s budget, ignoring it only masks its true cost.