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James Li
James Li
Articles (1346)  | Author's Website |

5 Buffett-Munger Stocks With High Dividend Yields

Stocks include a new addition to the gurus' list of good companies

The Buffett-Munger Screener, one of several predefined GuruFocus value screens offered to Premium members, seeks stocks that meet Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio)'s four-criterion investing approach. Among these stocks, the five stocks with high dividend yields are Extra Space Storage Inc. (NYSE:EXR), Amgen Inc. (NASDAQ:AMGN), AmerisourceBergen Corp. (NYSE:ABC), CDW Corp. (NASDAQ:CDW) and Group 1 Automotive Inc. (NYSE:GPI).

Buffett-Munger Screener seeks good stocks using four key criteria

Buffett said that Berkshire looks for four key characteristics of good companies: understandable business, favorable long-term prospects, honest and competent management and attractive price valuations. Two key criteria are a GuruFocus business predictability rank of at least four stars and a price-earnings-to-growth ratio less than 2.

GuruFocus has started displaying the number of new stocks for each of the value screens. For example, the Buffett-Munger Screener had one new stock since the last update, which is Extra Space Storage.

The Salt Lake City-based real estate investment trust owns, operates and manages over 1,800 self-storage properties in over 38 states. GuruFocus ranks Extra Space Storage's profitability 9 out of 10, driven by a five-star business predictability rank and an operating margin that has increased approximately 1.80% per year on average over the past five years.

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Extra Space Storage offers a dividend yield of 3.41%. Even though it underperforms 86.6% of global REITs, the current dividend yield is larger than the historical median of 3.01%.

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Gurus with large holdings in Extra Space Storage include Jim Simons (Trades, Portfolio)' Renaissance Technologies and Pioneer Investments (Trades, Portfolio).

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Amgen

Amgen produces therapies for renal disease and cancer-supportive care products. GuruFocus ranks the Thousand Oaks, California-based company's profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank, a return on assets that outperforms 88.57% of global competitors and an operating margin that has increased approximately 5.30% per year on average over the past five years.

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AmerisourceBergen

AmerisourceBergen engages in wholesale distribution of specialty, generic and brand name pharmaceutical products to acute-care hospitals and health systems. GuruFocus ranks the Chesterbrook, Pennsylvania-based company's financial strength 7 out of 10, driven by a high Piotroski F-score of 8 and a strong Altman Z-score of 5.

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Other positive investing signs include a four-star predictability rank, expanding operating margins and returns that are outperforming over 70% of global competitors. Based on these metrics, GuruFocus ranks AmerisourceBergen's profitability 8 out of 10.

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CDW

CDW resells value-added projects that range from notebooks to data center software. GuruFocus ranks the Chicago-based company's profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank, a return on assets that outperforms 81.50% of global competitors and an operating margin that has increased approximately 2.20% per year on average over the past five years.

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Group 1 Automotive

Group 1 Automotive owns and operates a network of automotive dealerships and collision centers in the U.S. and the U.K. GuruFocus ranks the Houston-based company's profitability 8 out of 10 on several positive investing signs, which include a five-star business predictability rank and a return on equity that outperforms 84.72% of global competitors.

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Disclosure: Author is long Amgen.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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