Investing

Warren Buffett's Nine Top Dividend Stocks

1. ConocoPhillips
> Dividend yield: 3.6%
> Price per share: $77.08
> Market cap: $94.5 billion

Despite reducing his position in ConocoPhillips (NYSE: COP) in favor of rival Exxon Mobil, ConocoPhillips remains a sizable investment within the Berkshire Hathaway portfolio. As of the end of the most recent quarter, the investment totaled nearly $783 million, or more than 11 million shares, down from more than 13.5 million shares in the previous quarter. The oil and gas company’s stock remains a good deal off its all-time highs, and Buffett has called his initial — and far-larger — investment in the company “a major mistake,” citing his own failure to foresee drops in oil and gas prices.

2. Sanofi
> Dividend yield: 3.5%
> Price per share: $54.36
> Market cap: $144.8 billion

Berkshire Hathaway held a position of almost 4 million Sanofi shares in its latest 13-F filing, valued at the time at more than $209 million. The French drug giant produces a range of products, including diabetes treatments, vaccines and veterinary medicine. Although Sanofi (NYSE: SNY) is a relatively small position in the Berkshire portfolio, it carries a considerable dividend yield. The company’s U.S.-listed shares currently trade at $54.36 apiece, and they offer a 3.5% dividend yield. Sanofi pays dividends only annually, however, while U.S. dividends are typically paid out quarterly.

3. General Motors
> Dividend yield: 3.4%
> Price per share: $34.75
> Market cap: $55.7 billion

General Motors Co. (NYSE: GM) may be suffering from recall woes, but Buffett raised his stake from 25 million shares to 40 million shares during 2013. And he may be unlikely to back away from the investment anytime soon. Although Buffett gave Ted Weschler, one of Berkshire’s top investment managers, credit for the decision to invest in GM, he did express faith in company management by offering new GM CEO Mary Barra a vote of confidence. GM’s dividend is still relatively new, but because GM’s stock price has dropped so far this year, its yield rose to just above 3.4%. At $34.75, GM shares are down nearly 17% from a 52-week high of $41.85. The average analyst one-year price target currently stands at $43.

4. General Electric
> Dividend yield: 3.3%
> Price per share: $26.19
> Market cap: $263.5 billion

General Electric Co. (NYSE: GE) was one of several companies in which Buffett purchased preferred stock and warrants during the financial crisis. After redeeming the GE preferred shares into cash in 2011, Berkshire Hathaway converted the warrants into GE common stock last year, therefore increasing its stake in the company’s common stock. At close to $297 million worth of stock, Berkshire’s GE stake is relatively small. One reason Buffett has not invested more in GE could be because both Berkshire and GE are both conglomerates and potentially vie for the same investor dollars. GE shares are down from their 52-week high of $28.09 to $26.19 a share. However, Wall Street analysts have an average one-year price target on GE stock of $29.00, substantially above the 52-week high.

5. Procter & Gamble
> Dividend yield: 3.1%
> Price per share: $81.13
> Market cap: $219.5 billion

Procter & Gamble Co. (NYSE: PG) just announced a 7% dividend hike, bringing its quarterly payout to 64 cents per share for an annual yield of 3.1%. P&G is the top consumer products company in the world, and Buffett has been a long-time shareholder — first, in Gillette for roughly 16 years, and then in Procter & Gamble since the companies’ 2005 merger. At $81.13 a share, the stock is down 5% from its 52-week high of $85.82. The consensus one-year price target for this high-yielding, defensive mega-cap is $87.32.