Warren Buffet is known as the Oracle of Omaha, he’s one of the most successful investors of all time. He’s the second richest man in the United States, with a net worth of 74.4 Billion. Buffet developed an interest in investing and business at a young age. He began in the Wharton School of the University of Pennsylvania, ending in Columbia University’s School of business. Because of his great success in investing, Buffet’s insights are sought by all investors to see which stocks will yield the best dividends.
These are the best high yield dividend stocks in Buffet’s portfolio.
General Motors. Its dividend yield is 4.08%
This is the highest yielding dividend stock in Buffett’s portfolio. Although it is unknown what Buffet likes about GM, given its brush with bankruptcy in recent history, he spends lots of time talking about confiding in American businesses; GM is a worthwhile investment to practice that mantra. The future looks promising as GM has great growth opportunity in China and other foreign markets.
Coca Cola. Its dividend yield is 3.33%
Coca Cola is a longtime favorite of Buffett’s. It’s been on his portfolio for the past twenty-five years, along with Wells Fargo. Coca Cola is a great investment as it has incredible brand recognition, considerable power and a massive yet efficient distribution network.
Phillips 66. Its dividend is 3.18%
Oil refining companies are great to invest in as their dividends are typically high. Everyone in the world needs oil and it’s a rare commodity. Phillips 66 places emphasis on aggressive share buybacks, responsible capital spending and a constant rate of growing dividends. Because Phillips his such a diverse business, it can do well despite the high or low price of oil.
General Electric. Its dividend yield is 3.16%.
Albeit a small portion of the Berkshire portfolio, General Electric is still quite profitable, with their stock valuing at $300 million. Berkshire stake in General Electric, colloquially known as GM, is due to an old warrant acquired by Berkshire during the financial crisis of the mid to late 2000s. Buffet is known to believe in American businesses, so it’s no wonder that he would bet on the success of this American business.
IBM. Its dividend yield is 3.12%
Surprising everyone in 2011, Buffet invested in IBM as he had always been wary of investing in technology. However, IBM has a very steady customer base, many of their customers are with them for life. This is the characteristic of “stickiness” that Buffet loves to see in a company.
Wells Fargo. Its dividend yield is 2.61%
Worth $28 billion, Berkshire’s Wells Fargo is the company’s largest common stock position, second to Kraft’s Heinz. Buffet has credited Wells Fargo, despite recent ‘fake account scandals’, calling it an ‘incredible institution’. Currently, Wells Fargo is the most profitable U.S banks among the largest U.S banks.
Kraft Heinz. Its dividend yield is 2.61%
Due to the 2015 merger of Heinz and Kraft Foods, Kraft Heinz is occupying a massive stake in Berkshire’s portfolio. The stake represents about 25% of the food giant. It’s quite obvious the combination of such successful and profitable businesses is an attractive characteristic to Buffet.
U.S Bancorp. Its dividend is 1.95%
Consistently, US Bancorp has been one of the more efficient and profitable banking operations in the United States. Over the years, it has does a fantastic job managing any risk that comes its way. Because of Trump’s affinity of big business and banks, US Bank along with other American banks could see rising profits in coming years.
Interesting changes in Buffet’s portfolio is the selling of most of his Verizon stock. Currently, his remaining stake is only worth $50,000. He also reduced his stake in Wal-Mart by 89%, although, by the time this article is published he may have already sold all of his shares to Wal-Mart.
Buffet did more than sell stock in recent months; he bought new positions in Sirius XM Radio, Monsanto and Southwest airlines. Along with his current stakes in airlines, Buffet now owns over 7% of common stock in Delta Airlines, United Continental Holdings and American Airlines.
Buffet’s tactic of investing in high quality businesses and trading at reasonable profits is a way all of us can construct a profitable dividend portfolio.