When it comes to value investing, no investor compares to Warren Buffett. The Oracle of Omaha continues to inspire us with incredible worth ethic, sound investment advice and an immutable track record. However, for income investors, the best source of inspiration is Mr. Buffett’s stock holdings.
Buffett’s company, Berkshire Hathaway (BRK-A ), owns 48 stocks, according to its latest 13F filing with the U.S. Securities and Exchange Commission (SEC). As it turns out, Berkshire’s holdings are filled with top dividend plays that can be used by income investors to generate passive earnings and consistent dividend growth.
In the following section, we present the top ten dividend stocks owned by Berkshire Hathaway. To ensure we adequately reflect the company’s holdings, we limit our picks to stocks in which Berkshire has a stake of $100 million or more.
Here is the list of the top 10 high-yielding stocks under Buffett’s banner.
|Ticker||Company||Annualised Dividend Payout ($)||Closing Price ($) *||Dividend Yield (%) *||Berkshire’s Ownership ($ million) **|
|(STOR )||Store Capital Corporation||$1.24||$25.83||4.80%||$462.19|
|(KHC )||Kraft-Heinz Company||$2.50||$56.58||4.42%||$20,283.79|
|(GM )||General Motors Company||$1.52||$38.28||3.97%||$1,816.99|
|(QSR )||Restaurant Brands International||$1.80||$56.95||3.16%||$480.30|
|(WFC )||Wells Fargo||$1.56||$55.26||2.82%||$23,925.86|
|(PSX )||Phillips 66||$3.20||$118.75||2.69%||$4,382.58|
|(WMT )||Wal-Mart Stores||$2.08||$83.37||2.49%||$123.98|
|(USB )||U.S. Bancorp||$1.20||$51.06||2.35%||$4,587.81|
Stay up to date with the highest-yielding stocks and their latest ex-dividend dates on our High Dividend Stocks by Yield page.
1. Store Capital Corporation (STOR )
Berkshire Ownership: $462,190,000
In terms of dividend yield, no company in Berkshire’s portfolio outshines Store Capital. The diversified real estate investment trust (REIT) yields 4.80%, thanks to its emerging status as a leader in middle market real estate.
Newly passed tax cuts make STOR more attractive from the perspective of tax efficiency. Unlike stocks, REITs are spared corporate income taxes so long as they distribute 90% of their earnings to shareholders. This is a solid value proposition for income investors.
2. Sanofi (SNY )
Berkshire Ownership: $148,337,000
Sanofi is another rare dividend payer yielding more than 4%. The French multinational pharmaceutical giant is one of the world’s largest in terms of prescription sales.
Multi-billion-dollar acquisitions dampened the company’s top and bottom lines, but likely paved the way for future growth in a highly competitive industry.
3. Kraft-Heinz Company (KHC )
Berkshire Ownership: $20,283,793,000
The merger between Kraft and Heinz in 2015 created a mega company whose dividend has grown every year since inception. KHC reported first-quarter earnings that were much higher than expected, helping to buoy share prices. As a consumer staple, KHC is benefiting from an improved domestic economy but also stands to outperform the market during cyclical downturns or even a recession.
4. General Motors Company (GM )
Berkshire Ownership: $1,816,999,000
General Motors is one of the biggest turnaround stories of the post-crisis period. After staving off collapse, the company has been at the forefront of the decade-long auto boom. This has translated into strong, albeit inconsistent, dividend growth since the financial crisis. GM currently yields close to 4%, which is double the consumer goods average.
5. Coca-Cola (KO )
Berkshire Ownership: $17,371,999,000
When it comes to established brands, very few companies can measure up to Coca-Cola. The stock is a staple of the Buffett portfolio, yielding a solid 3.69%. A dividend-growth streak of 55 years makes KO one of the best stocks for any aspiring income investor.
Interested in learning more about Warren Buffett’s investment approach? Explore why the Oracle of Omaha looks for wide economic moats.
6. Restaurant Brands International (QSR )
Berkshire Ownership: $480,304,000
Restaurant Brands International offers an ownership stake in some of the world’s largest quick-service restaurants, including Burger King, Popeyes and Tim Hortons. The company enjoys more than $30 billion in total sales across 24,000 locations worldwide. Though not an established dividend payer, QSR has paid out higher yields the last two years.
7. Wells Fargo (WFC )
Berkshire Ownership: $23,925,858,000
As America’s third-largest bank by total assets, Wells Fargo is backed by a diversified business model and an improving domestic economy.
However, a series of scandals has undermined consumer and shareholder trust in the company, with the Federal Reserve placing a $2 trillion cap on assets until the bank “sufficiently improves its governance and controls.” Nevertheless, the bank has been growing its dividend over the last six years in a row.
8. Phillips 66 (PSX )
Berkshire Ownership: $4,382,575,000
Phillips 66 is an energy manufacturing and logistics company enjoying a broad uptrend, thanks to surging oil prices. The company reported stellar first-quarter earnings, leading to a higher dividend. PSX yields a greater amount than the basic materials average. Higher payouts could become the norm as oil prices continue to recover from their bear market lows.
9. Wal-Mart Stores (WMT )
Berkshire Ownership: $123,981,000
America’s largest retailer is quietly transforming into an e-commerce powerhouse. Online sales surged 33% in the first quarter, helping Wal-Mart’s top and bottom lines achieve faster-than-expected growth. The Dow blue-chip also happens to be a perennial dividend payer with 43 years of consecutive growth.
10. U.S. Bancorp (USB )
Berkshire Ownership: $4,587,811,000
Buffett’s penchant for financials is on clear display with U.S. Bancorp, which is America’s seventh-largest bank by total assets. The company has posted strong loan growth in recent quarters, a trend that is expected to continue as the U.S. recovery engine broadens. This gives USB a highly attractive DARS™ rating relative to other dividend stocks.
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The Bottom Line
The dividend stocks laid out before you today are owned and approved by the Oracle of Omaha himself. The diverse mixture of stocks provides diversification benefits as well as long-term income growth.
Check out what the investors are currently most interested in by visiting our Most Watched Stocks page.