We compared the top domestic dividend ETFs against the one “stock buyback ETF” and the numbers were clearly in favor of the buyback ETF. We also chose to go back further, comparing our favorite ETF of each category (buybacks versus dividends) to see which is doing better through time against the other. All performance measures were made first from the last trading day of 2012 through the close on Tuesday, May 21, 2013. Other comparisons were made from year-end to year-end, based on the dividend-adjusted closing prices of each on the last trading day of each year.

The PowerShares Buyback Achievers (NYSEMKT: PKW) is the one “stock buyback ETF” that investors can easily purchase. The other mimic ETFs are thin in volume. The PKW has about $535 million in assets now, and its net expense ratio is 0.71%. This ETF of course has many dividend payers in the fund, but the focus on share buybacks lends credibility that it buys stocks that are buying back close to 5% of their float each year. The buyback ETF is actually up 22.8% so far in 2013.

SPDR S&P Dividend (NYSEMKT: SDY) ETF is our favorite ETF that focuses solely on dividends because it tracks the S&P High Yield Dividend Aristocrats Index, as it is composed of companies that keep raising their dividends through good times and bad. The SPDR version of the dividend ETFs has more than $12 billion in assets and a gross expense ratio of 0.35%. This ETF was up 21.4%, after adjusting for dividend payments year-to-date in 2013.

Just to keep things honest, we also went back to the other key domestic dividend ETFs and the PowerShares Buyback Achievers (NYSEMKT: PKW) gain of 22.8% so far in 2013 trumps all of these others:

• iShares has two key ETFs here for dividends: iShares High Dividend Equity (NYSEMKT: HDV) was up 19.0% so far in 2013, while the iShares Dow Jones Select Dividend Index (NYSEMKT: DVY) was up 18.1% so far in 2013.
• Vanguard also has two of these in dividends: the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) was up 17.1% so far in 2013, while the Vanguard High Dividend Yield Index ETF (NYSEMKT: VYM) was up 19.1% so far in 2013.

If you want to know about the dividend yields alone, here are the current dividend yields represented by each fund family: PowerShares Buyback ETF 12-month yield is 0.95% and the SPDR Dividend ETF is 2.66%. Now, what about the share performance through time since the end of the recession, comparing PowerShares Buyback Achievers (NYSEMKT: PKW) against the SPDR S&P Dividend (NYSEMKT: SDY) ETF?

• 2012: PKW 13.7% and SDY 11.6%
• 2011: PKW 6.7% and SDY 7.2%
• 2010: PKW 17.8% and SDY 15.5%
• 2009: PKW 31.2% and SDY 19.2%

One common investing theory is that investors should prefer dividends over stock buybacks and share repurchases. After all, buyback plans may be based on short-term share price decisions. Continually higher dividends are intended to signal that a company believes that it will have stable and/or growing earnings through time, regardless of the conditions of today. We have evaluated these before, but it is amazing that the math keeps holding in the bull market in favor of buybacks over dividends in all but one of the post-recession years.

Here we have the holdings of each ETF, to give a representation for the differences between dividend companies and those that also have both dividends and buybacks.

Jamie Dimon has floated the idea that he may consider leaving if his role is split. We noted that one analyst recently signaled a $20 billion or 10% risk that could come out of the stock if Dimon decided to leave the firm if his role is split. We have also warned of a coming activist investor bubble that seems to be forming as activist investors are attacking billions and billions worth of companies if you count the market caps.

Dimon has maintained that the issues behind the London Whale have been resolved. Unfortunately, many top lieutenants have left the firm in recent months. While this may be a sign that things were not as good as some analysts hope, this also has created a bit of a management vacuum and that leaves no heir apparent if Dimon chooses to just leave J.P. Morgan.

Warren Buffett of Berkshire Hathaway Inc. (NYSE: BRK-A) has taken sides, saying Jamie Dimon is one of the greatest bank CEOs that exists. Ken Langone, a founder of Home Depot Inc. (NYSE: HD), also has been in full support and said that he would sell J.P. Morgan shares if Dimon leaves. Citigroup Inc. (NYSE: C) recently talked up its own split role position. The bank said that the split of a chairman and CEO role have worked well for it during the restructuring.

J.P. Morgan remains one of our top banks as one of the seven safest banks in America for 2013. Unfortunately, the London Whale issue and the loss of Jamie Dimon’s ability to speak against regulation and legislation has taken the bank’s leadership role away.

So, tell us what you think in our anonymous poll below.

At least those seem to be the likeliest conclusions to be drawn from the brief letter that Dell’s board sent to Icahn and Southeastern Asset Management this morning. Here’s the money quote:

Unless the Board of Directors of Dell determines that your proposal could reasonably be expected to result in a “Superior Proposal” as defined in the Company’s existing merger agreement with affiliates of Silver Lake and Michael Dell, we are not permitted to provide you with information or engage in discussions concerning your proposal.

That sounds pretty much like a “put up or shut up” challenge. On May 10, Icahn and Southeastern suggested an alternative to Dell/Silver Lake’s $24.4 billion buyout that would have paid Dell shareholders $12 a share in cash or awarded shareholders $12 a share in additional stock and allow shareholders to keep their stakes in Dell, which would remain a publicly traded company. Dell’s board asked for more information on May 13, and today’s letter repeats that request.

Dell’s stock has wobbled between about $13.50 and $14.50 a share for the past three months. The shares closed at $13.40 on Friday and have been inactive this morning. The 52-week range is $8.69 to $15.29.

In something of a face-saving victory, Icahn did manage to put one of his three candidates on Transocean’s board. Sam Merksamer will replace board chairman Michael Talbert who had said he would resign from the board even if re-elected. He won’t have to write that resignation letter now.

Transocean’s CEO told The Wall Street Journal that the company “welcomes” Merksamer to the board and that there won’t be any issues with seating the new board member.

At its annual meeting yesterday shareholders did approve a smaller dividend payment of $2.24 a share that had been proposed by Transocean’s management and supported by to institutional investors’ advisory firms. The dividend will be paid in 4 quarterly installments of $0.56 a share beginning in June.

Shares of Transocean are trading down 1.8% at $53.76 in a 52-week range of $39.32 to $59.50.

Thomson Reuters has a consensus estimate for earnings per share (EPS) of $0.35 on sales of $13.52 billion. Both numbers are well below results from the same period a year ago.

The date change for the company’s results is generating more interest than the actual numbers. Few observers expect Dell to meet the EPS target due to price cuts the company made to overcome the slow sales in the PC business during the first quarter.

The other issue, of course, is the buyout offer from founder and CEO Michael Dell and Silver Lake Partners worth $13.65 a share ($24.4 billion) that has been challenged by activist investor Carl Icahn and Dell shareholder Southeastern Asset Management. The move to an earlier date may mean that Dell’s board has decided to accept one or the other proposal. If it does announce a decision, that will have far more impact on the stock’s price movement than the reported numbers.

If the board punts on the decision, the shares may not react much at all to the report unless the numbers are so bad that investors fear that the Icahn/Southeastern buyout offer will be withdrawn. Dell and Silver Lake would benefit from some crappy numbers — it makes their offer look less undervalued than Icahn/Southeastern claim.

Should the numbers be awful, Dell and Silver Lake, who believed the company was worth $13.65 a share yesterday, can assure shareholders that the company will be worth $13.65 a share tomorrow, just like they said all along.

Dell’s shares are trading at $13.42 in the mid-afternoon today, down 0.2% in a 52-week range of $8.69 to $15.31.

To keep things even for U.S. investors, we screened out the ADRs held by Buffett and Berkshire Hathaway Inc. (NYSE: BRK-B) even though one is mentioned at the end of the screen to keep them on the list. Of the dozens of stocks held by the conglomerate, these are the eight highest dividends in the Buffett portfolio. We have put the stocks in order of the highest yields first and added in color on each if applicable. As you will see, most of the Buffett top dividend yields still offer upside to their consensus price targets for value investors looking for growth.

ConocoPhillips (NYSE: COP) leads the list with a common stock dividend yield of 4.2%. The company has pledged to keep its dividend strong, and this puts it higher than other oil giants. This stock is now within about 1% of new 52-week highs and the $62.42 share price compares to an analyst consensus price target of about $63.98.

Gannett Co. Inc. (NYSE: GCI) has a surprising yield of 3.6% for its common stock holders. This remains a small holding of Warren Buffett but investors might be surprised that the newspaper and media stock has risen to the point that it is up almost 100% from its 52-week low. At $21.62 as of now, the stock trades right at the $21.61 consensus analyst price target, and the 52-week trading range is $12.17 to $22.21.

General Electric Co. (NYSE: GE) offers a 3.3% yield, partly because shares have pulled back since earnings. The earnings report was not stellar by any means, but we think GE shares were sold off too hard after earnings when you consider the state of the bull market. Shares are at $23.24, and GE’s 52-week high is $23.90. Analysts have a consensus target price of $25.33. GE is likely to have a dividend hike yet again later this year.

Wells Fargo & Co. (NYSE: WFC) is a top bank and Buffett keeps buying more and more of this stock each and every quarter. The 3.2% common stock yield is rather impressive, and this remains at the top of the seven safest banks in America. This bank is challenging the highs from before the recession again, if you back out the dividend payments. At $39.30, its stock hit that multiyear high on May 15, and analysts have a consensus price target of $40.76.

Procter & Gamble Co. (NYSE: PG) has lifted its dividend and is yielding 3.1% after a dividend hike in April. Buffett has trimmed the stake here over time, but activist investors have been on management’s back and pressing it to run the company better. If P&G keeps up its efforts, it could be worth even more. The market cap of $221 billion already makes it one of the largest public companies out there. With shares at $80.68, the consensus analyst target price is $82.78.

J.P. Morgan Chase & Co. (NYSE: JPM) is a personal holding of Warren Buffett rather than Berkshire Hathaway. The bank pays a 3.1% dividend, despite not getting to be as aggressive on its capital plans. Jamie Dimon has been under fire here to split the CEO and chairman roles, but Buffett recently has praised Dimon as a great CEO who also deserves his chairman role. We would caution that one analyst showed that some $20 billion (10% of the share price) could come out of the stock if Dimon leaves the bank because there is a management replacement vacuum right now with no heir apparent. With shares at $51.09, the consensus analyst target is $56.21.

Johnson & Johnson (NYSE: JNJ) recently raised its dividend. The drug and consumer products giant has been a habitual dividend-raising machine, and its product quality controls appear to be over. The 3.1% payout is impressive when you consider that this stock just hit an all-time high on May 15. Note that the consensus analyst price target of $86.50 is actually less than the current price of $87.64.

United Parcel Service Inc. (NYSE: UPS) ranked as number eight with a dividend yield of 2.8%. This comes as the stock is challenging all-time highs, and the shipping giant has raised its dividend payment consistently. With shares at $88.60, analysts have a consensus price target of $93.09 on the stock.

GlaxoSmithKline PLC (NYSE: GSK) is the ADR of the group, and it was only included because it screens out as having such a high yield at 4.3%. That would have put it at the top of the list. As this is an ADR and subject to currency changes altering the payouts each time in dollars for ADR holders, we are only representing the Yahoo! screen for the nominal payout rather than adding color here.

Jon C. Ogg

*The full Buffett and Berkshire Hathaway portfolio can be seen here.

We saw new positions taken in Citigroup Inc. (NYSE: C) of 1 million shares and in Hess Corp. (NYSE: HES) at 2.7 million shares. Family Dollar Stores Inc. (NYSE: FDO) was a new stake and that was put at 5 million shares.

Some 2.8 million shares were also seen in Vodafone Group PLC (NASDAQ: VOD) which is likely an arbitrage play of sorts in a Verizon Communications Inc. (NYSE: VZ) deal over Verizon Wireless. Paulson also has a merger-arb piece left over in H. J. Heinz Company (NYSE: HNZ) with a stake of 1 million shares.

Cobalt International Energy, Inc. (NYSE: CIE) was a new position, but this was put at about $80 million in shares and in debt securities combined. InterOil Corporation (NYSE: IOC) was a new stake of 1.87 million shares.

MGIC Investment Corp. (NYSE: MTG) was a new stake of 17 million shares which has since risen in value, but there was an additional $152 million in debt securities held there.

Paulson’s position in the SPDR Gold Shares (NYSE: GLD) was listed as 21,837,552 shares worth some $3.37 billion as of March 31. That compares to a December 31, 2012 value of $3.538 billion. Based upon the closing price of $134.63 on Wednesday, that value would be down to $2.94 billion as of now.

Some of these positions were higher in the after-hours from the report. With Paulson under much more criticism than praise of late, you have to wonder if the cynical view of shorting Paulson’s picks may start to take shape. Just keep in mind that Paulson’s losses in gold might not mean that he makes bad decisions elsewhere and indefinitely.

PAULSON’s FULL HOLDINGS

The new Buffett holdings are below.

American Express Co. (NYSE: AXP) was roughly 151.6 million shares, SAME AS last quarter.

Bank of New York Mellon Corp. (NYSE: BK) was almost 19 million shares, which appears to be slightly lower but it had been raised before. What matters here is that it remains a substantial holding still.

Chicago Bridge & Iron Co. (NYSE: CBI) was a NEW POSITION at just over 6.5 million shares worth over $400 million.

Coca-Cola Co. (NYSE: KO) was more than 400 million shares due to the stock split of 2012, but this is virtually the SAME AS BEFORE.

ConocoPhillips (NYSE: COP) is the SAME POSITION at 24.1 million shares, but this is lower than in prior quarters.

Costco Wholesale Corp. (NASDAQ: COST) was the SAME POSITION at 4,333,363 shares.

DaVita Inc. (NYSE: DVA) was a LARGER POSITION and already more than a 10% stake and we recently saw that Berkshire Hathaway had entered into a standstill agreement not to buy more than 25% of the company after already having increased its stake recently. This was listed as 14.97 million shares as of March 31 versus 13.6 million shares before.

Deere & Co. (NYSE: DE) was the SAME POSITION at roughly 4 million shares.

DirecTV (NASDAQ: DTV) was HIGHER YET AGAIN at 37.275 million shares versus almost 34 million shares and that was also higher than before.

Gannett Co. (NYSE: GCI) was the SAME POSITION of 1.74 million shares.

General Electric Corp. (NYSE: GE) is listed as the SAME POSITION at 588,900 shares, but this is still way down from prior reports.

General Motors Co. (NYSE: GM) is the SAME POSITION at 25 million shares, but this was previously up from smaller positions.

GlaxoSmithKline (NYSE: GSK) is the SAME POSITION at 1.51 million shares.

Despite the Carl Icahn efforts to force a higher price, Dell’s buyout now looks capped at $13.65 rather than floored at $13.65. You have to assume that the earnings results are going to be very weak on Thursday. Still, Michael Dell will face a serious fight on his hands if he were to lower his $13.65 share price buyout offer. His board has been in support of his offer from the start, but pulling out would almost certainly force his board of directors to stage a coup.   That being said, investors just do not expect that a higher buyout is coming here.

Carl Icahn looks like he wet the bed here thinking he could just muscle his way into Dell to force a higher buyout or to force a recapitalization that would leave a large portion of the company public. Remember when we warned you about the activist investor bubble? Now it looks like holders of the Icahn Enterprises, L.P. (NASDAQ: IEP) units under Carl Icahn could lose some of those big profits if Icahn remains unable to shake Michael Dell into working a better deal.

Microsoft Corporation (NASDAQ: MSFT) is still tentatively involved in a preferred share of sorts, but The Blackstone Group L.P. (NYSE: BX) backed away when it witnessed the decline of the trends in the PC business.

Dell shares are trading at $13.47, some 1.33% under the $13.65 per share buyout price. That leaves very little room for the so-called merger arbitrage investors who take the risk that a deal cannot close.

Dell shares are up 33% in 2013. Rival shares in Hewlett-Packard Co. (NYSE: HPQ) are up by 48% so far in 2013. H-P is in a turnaround and is too large to be acquired, yet Dell’s turnaround and buyout only have the stock up by about two-thirds as much as that of H-P.

The IQ Merger Arbitrage ETF (NYSE: MNA) is betting on the Dell buyout and has about 7% of its assets in the fund. Its investors are hoping that all remains well with the Dell buyout after earnings. With a discount of only 1.3% or so, Wall Street’s vote is that Michael Dell is going to close the deal originally proposed and not for a single cent higher.

A May 14 letter was sent to Sony President Kazuo Hirai suggesting that Sony should create an IPO for a minority stake in Sony Entertainment. The rationale is that Sony would then have enough capital to improve on the electronics unit and on PlayStation. It is not the first, and likely will not be the last, call from outsiders that Sony has been unable to unlock the value of its entertainment unit.

Sony quickly responded that the entertainment unit is not for sale and that it is already trying to strengthen up where Dan Loeb wants improvements. Unfortunately, Sony cannot lie or sugarcoat its way out of almost a decade of losses in its television unit.

Dan Loeb may be fighting an uphill battle here. Investor activism is not given the same ear from corporate boards in Japan. Often activist efforts in Japan can be viewed by the company’s board and management as a personal offense or a dishonorable effort. Loeb’s plan also has the gimmick of the past tracking stock we saw a decade ago, and ultimately one can argue that it is simply phantom value that is created. By removing the strengths of the entertainment unit from the core operations, Sony also might be featured as an even weaker company than it is now.

Will Loeb win? It seems doubtful, but the policies presented are geared around thriving off of the new easy money monetary policy installed by Abe in Japan. Loeb does own close to a 6.5% stake, with some 64 million Sony shares.

Investors may get to unlock the value here if Loeb wins. At issue is that Loeb’s efforts simply may weaken the core electronics business, as the entertainment unit could be evaluated on its own rather than providing cover for the whole company. If you want to know just how bad things are at Sony, the ADR price might say it all. Even after a huge Abe-influenced bounce in the share price, Sony trades at less than half its prerecession share price. That same share price is only about one-sixth of its peak back in the year 2000.

Sony ADRs hit a new 52-week high of $22.22 earlier on Tuesday, and the stock is still up 8.5% at $20.50 after about two hours of trading. The trading volume of 17.5 million shares in New York is already closing in on six-times normal trading volume.