Warren Buffett, Chairman of Berkshire Hathaway Inc., is widely regarded as the most respected and successful investor in history. Often referred to as "The Oracle of Omaha," it is no secret that he favors high dividend yield stocks without ever paying a dividend on his own stock. This investment strategy allows him to continually reinvest his earnings in order to grow Berkshire Hathaway.
Buffett, who studied under the legendary value investor Benjamin Graham at Columbia, began sculpting his own investment strategy after working for Graham for two years in the 1950’s. Along with Berkshire Vice-Chairman Charles Munger, Buffett began focusing on the way a company was managed, how it worked, and why it was better than its competitors. This was in addition to the company being available at an attractive price. From the beginning of Berkshire Hathaway through 2009, the famous fund has seen a compounded annual gain of 20.3%.
Today Berkshire Hathaway is a major corporation with more than 50 subsidiary companies and a market cap in excess of $202 billion. Buffett invests in multiple industries to spread his risk and believes in the idea of holding onto a stock forever. Berkshire Hathaway’s most prominent industries include insurance, jewelers, retail furniture, apparel and food.
Below are the top five highest yield holdings for Berkshire Hathaway as of 09/30/10. A great deal of analysis goes into stocks that Buffett would or wouldn’t buy based on their dividend yields. As a value investor, Buffett considers the wide moat he refers to as a company that stands apart from the rest and is fundamentally sound. And when Buffett is successful at purchasing stock in these companies, he makes returns that are reinvested in the company.
Top five highest yielding holdings as of latest 13-F filing with the SEC (Q3 2010)
|No. 1: GlaxoSmithKline PLC (GSK)||5.10%||0.10%|
|No. 2: Kraft Foods Inc. (KFT)||3.70%||6.70%|
|No. 3: Johnson & Johnson (JNJ)||3.50%||5.40%|
|No. 4: Sanofi-Aventis (SNY)||3.30%||0.30%|
|No. 5: ConocoPhillips (COP)||3.20%||3.40%|