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Holly LaFon
Holly LaFon
Articles (9781)  | Author's Website |

Warren Buffett’s Top 5 Dividend-Paying Stocks

Buffett just bought his top payer last quarter

Warren Buffett (Trades, Portfolio) may not pay a dividend at his massive company, Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B), because he thinks he can put its earnings to better use. He likes other companies that give back to their shareholders, though. The top dividend payers in his portfolio have strong yields, including a fourth-quarter new buy, Kinder Morgan Inc. (NYSE:KMI), with the highest yield.

The cash Warren Buffett (Trades, Portfolio)’s dividend companies pay contributes meaningfully to Berkshire’s bottom line. In his quarterly report, he records only their dividends as earnings. Last year, this totaled $1.8 compared to their total earnings of $4.7 billion.

Buffett’s highest yielding stocks as of Dec. 31 are: Kinder Morgan Inc. (NYSE:KMI), AT&T Inc. (NYSE:T), General Motors Co. (NYSE:GM), Verizon Communications Inc. (NYSE:VZ) and Sanofi SA (NASDAQ:SNY).

Kinder Morgan (NYSE:KMI), the highest yielding stock in Buffett’s portfolio, was a new buy in the fourth quarter. The midstream energy company yields 9.01%, higher than 61% of the companies in the global oil and gas midstream industry.


In the first quarter, Kinder Morgan announced an annualized dividend 50 cents in 2016, an increase from 48 cents in 2015. Year to date, the company’s share price is up 19.9% to $17.89. It has a price-book ratio of 1.1 and price-sales ratio of 2.7.

Buffett bought 26,533,525 shares of the company, totaling 0.3% of his portfolio. The average price for the fourth quarter was $24.

A new buy in the third quarter 2015 was AT&T Inc. (NYSE:T) The telecom company yields 5.0%, higher than 76% of the companies in the global telecom services industry.


AT&T increased its quarterly dividend in February to 48 cents from 47 cents the previous year. Year to date, the company’s share price has increased 10.7% to $38.09. It has a price-earnings ratio of 16.3, price-book ratio of 1.9 and price-sales ratio of 1.4.

Buffett bought 59,320,756 shares of the company in the third quarter for an average price of $34 before selling 12,743,618 shares in the fourth quarter at the same average price. His holding totals 1.2% of his portfolio.

General Motors (NYSE:GM) has a dividend yield of 4.53%, higher than 89% of companies in the global auto manufacturers industry.


The company has paid a quarterly dividend of 38 cents so far in 2016, an increase from 36 cents the previous year. GM’s share price declined 5.3% year to date to $32.19. The stock has a price-earnings ratio of 4.8, price-book ratio of 1.2 and price-sales ratio of 0.34.

Buffett has accumulated 50 million shares of General Motors since starting the position in the first quarter 2012, totaling 1.3% of his portfolio.

The fourth biggest dividend stock in Buffett’s portfolio, Verizon Communications (NYSE:VZ), yields 4.4%, higher than 63% of companies in the global telecom services industry.


From September to March, Verizon’s dividend has remained at 56.5 cents per share, an increase from 55 cents the year prior. Verizon’s share price rose 9% year to date to trade at $50.44. The stock has a price-earnings ratio of 12.5, price-book ratio of 11.1 and price-sales ratio of 1.56.

Buffett holds 15,000,928 shares of the company since starting the position in the first quarter 2015, totaling 0.53% of his portfolio.

Fifth, Buffett holds Sanofi SA (NASDAQ:SNY), which yields 3.66%, higher than 89% of the companies in the global drug manufacturers industry.


At year-end 2015, Sanofi’s board proposed a dividend of €2.93, its 22nd consecutive annual increase. Year to date, Sanofi shares advanced 3.2% to $44.04. Sanofi has a price-earnings ratio of 24.1, price-book ratio of 1.76 and price-sales ratio of 2.96.

Buffett holds 3,905,875 shares of Sanofi and has not traded any shares since the third quarter 2013. It totals 1.13% of his portfolio.

See more of the dividend-paying stocks in Warren Buffett (Trades, Portfolio)’s portfolio here.

About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website

Rating: 4.5/5 (4 votes)



Hoang.brian - 3 years ago    Report SPAM

KMI doesn't pay 9% dividends. Try 3%.

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