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Warren Buffett's Top 10 Dividend Stocks

Stockpickr Staff
10/09/14 - 09:55 AM EDT


NEW YORK (Stockpickr) -- At Stockpickr, we track the top holdings of a variety of high-profile investors, such as George Soros and Carl
Icahn. Must Read: 7 Stocks Warren Buffett Is Selling in 2014
It should come as no surprise that the most popular of these portfolios is that of renowned investor Warren Buffett, CEO of Berkshire
Hathaway (BRK.B) and one of the richest people in the world.
Today we're taking a closer look at 10 of Buffett's top dividend stocks, based on Berkshire Hathaway's most recent quarterly 13F filing
with the SEC, which reflects holdings as of June 30, 2014. These stocks each comprise at least 1% of Berkshire's portfolio, with current
dividend yields of 1.2% and higher. They are listed by size of dividend yield.
10. Moody's
Moody's (MCO) has a current yield of 1.2%, paying a quarterly dividend of 28 cents a share.
Moody's is Buffett's 11th-largest holding, comprising 2% of the Berkshire Hathaway portfolio as of June 30. In the most recently
reported quarter, Buffett maintained his 24.7 million-share position in the stock.
TheStreet Ratings team rates Moody's as a buy with a ratings score of A-. TheStreet Ratings team has this to say about its
recommendation:
"We rate Moody's (MCO) a buy. This is based on the convergence of positive investment measures, which should help this stock
outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth,
notable return on equity, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel these
strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
MCO's revenue growth has slightly outpaced the industry average of 11.3%. Since the same quarter one year prior, revenues
rose by 15.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
Powered by its strong earnings growth of 48.00% and other important driving factors, this stock has surged by 30.18% over the
past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although
almost any stock can fall in a broad market decline, MCO should continue to move higher despite the fact that it has already
enjoyed a very nice gain in the past year.
Moody's has improved earnings per share by 48.0% in the most recent quarter compared to the same quarter a year ago. The
company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend
should continue. During the past fiscal year, Moody's increased its bottom line by earning $3.60 versus $3.03 in the prior year.
This year, the market expects an improvement in earnings ($4.03 versus $3.60).
The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against
the S&P 500 and exceeded that of the Diversified Financial Services industry average. The net income increased by 41.5% when
compared to the same quarter one year prior, rising from $225.50 million to $319.20 million.
The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This
is a signal of significant strength within the corporation. Compared to other companies in the Diversified Financial Services
industry and the overall market, Moody's return on equity significantly exceeds that of both the industry average and the S&P
500.
You can view the full analysis from the report here: MCO Ratings Report
Must Read: 10 Stocks George Soros Is Buying in 2014
9. Goldman Sachs
Goldman Sachs (GS) has a current yield of 1.2%, paying a quarterly dividend of 55 cents a share.
Goldman Sachs is Buffett's 10th-largest holding, comprising 2% of the Berkshire Hathaway portfolio as of June 30. In the most recently
reported quarter, Buffett maintained his 12.6 million-share position in the stock.
TheStreet Ratings team rates Goldman Sachs as a buy with a ratings score of A-. TheStreet Ratings Team has this to say about its
recommendation:
"We rate Goldman Sachs (GS) a buy. This is based on the convergence of positive investment measures, which should help this stock
outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth,
attractive valuation levels, solid stock price performance, growth in earnings per share and increase in net income. We feel these
strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
GS's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues
slightly increased by 2.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other
positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes
without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still
has good upside potential despite the fact that it has already risen in the past year.
Goldman Sachs has improved earnings per share by 10.8% in the most recent quarter compared to the same quarter a year
ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this
trend should continue. During the past fiscal year, Goldman Sachs increased its bottom line by earning $15.47 versus $14.15 in
the prior year. This year, the market expects an improvement in earnings ($16.80 versus $15.47).
The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Capital Markets industry
average. The net income increased by 5.5% when compared to the same quarter one year prior, going from $1,931.00 million to
$2,037.00 million.
You can view the full analysis from the report here: GS Ratings Report
Must Read: 7 Stocks Warren Buffett Is Selling in 2014
8. IBM
International Business Machines (IBM) has a current yield of 2.3%, paying a quarterly dividend of $1.10 a share.
IBM is Buffett's fourth-largest holding, comprising 11.8% of the Berkshire Hathaway portfolio as of June 30. In the most recently
reported quarter, Buffett increased his position in the stock by 2.7% to 70.2 million total shares.
TheStreet Ratings team rates IBM as a buy with a ratings score of A-. TheStreet Ratings Team has this to say about its
recommendation:
"We rate International Business Machines (IBM) a buy. This is based on the convergence of positive investment measures, which should
help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its
growth in earnings per share, increase in net income, notable return on equity, good cash flow from operations and expanding profit
margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures
that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
International Business Machines has improved earnings per share by 41.6% in the most recent quarter compared to the same
quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We
feel that this trend should continue. During the past fiscal year, International Business Machines increased its bottom line by
earning $15.02 versus $14.41 in the prior year. This year, the market expects an improvement in earnings ($17.90 versus
$15.02).
The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against
the S&P 500 and exceeded that of the IT Services industry average. The net income increased by 28.2% when compared to the
same quarter one year prior, rising from $3,226.00 million to $4,137.00 million.
Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the
company. Compared to other companies in the IT Services industry and the overall market, International Business Machines's
return on equity significantly exceeds that of both the industry average and the S&P 500.
Net operating cash flow has increased to $3,579.00 million or 12.75% when compared to the same quarter last year. The firm
also exceeded the industry average cash flow growth rate of -1.88%.
The gross profit margin for International Business Machines is rather high; currently it is at 54.45%. It has increased from the
same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.97%
trails the industry average.
You can view the full analysis from the report here: IBM Ratings Report
Must Read: 7 Stocks Warren Buffett Is Selling in 2014
7. U.S. Bancorp
U.S. Bancorp (USB) has a current yield of 2.4%, paying a quarterly dividend of 24.5 cents a share.
U.S. Bancorp is Buffett's eighth-largest holding, comprising 3.2% of the Berkshire Hathaway portfolio as of June 30. In the most
recently reported quarter, Buffett increased his position slightly in the stock to 80.1 million shares.
TheStreet Ratings team rates U.S. Bancorp as a buy with a ratings score of A-. TheStreet Ratings Team has this to say about its
recommendation:
"We rate U.S. Bancorp (USB) a buy. This is based on the convergence of positive investment measures, which should help this stock
outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth,
expanding profit margins, increase in stock price during the past year, increase in net income and growth in earnings per share. We feel
these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
The revenue growth came in higher than the industry average of 12.7%. Since the same quarter one year prior, revenues
slightly increased by 3.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the
earnings per share.
The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other
positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes
without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still
has good upside potential despite the fact that it has already risen in the past year.
The gross profit margin for U.S. Bancorp is currently very high, coming in at 87.58%. It has increased from the same quarter the
previous year. Along with this, the net profit margin of 27.22% significantly outperformed against the industry average.
The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks
industry average. The net income increased by 0.7% when compared to the same quarter one year prior, going from $1,484.00
million to $1,495.00 million.
U.S. Bancorp's earnings per share improvement from the most recent quarter was slightly positive. The company has
demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue.
During the past fiscal year, U.S. Bancorp increased its bottom line by earning $3.01 versus $2.84 in the prior year. This year, the
market expects an improvement in earnings ($3.10 versus $3.01).
You can view the full analysis from the report here: USB Ratings Report
Must Read: 10 Stocks George Soros Is Buying in 2014
6. Wal-Mart
Wal-Mart (WMT) has a current yield of 2.5%, paying a quarterly dividend of 48 cents a share.
Wal-Mart is Buffett's fifth-largest holding, comprising 4.1% of the Berkshire Hathaway portfolio as of June 30. In the most recently
reported quarter, Buffett increased his position in the stock by 1.3% to 58.8 million total shares.
Must Read: 10 Stocks George Soros Is Buying in 2014
5. Wells Fargo
Wells Fargo (WFC) has a current yield of 2.6%, paying a quarterly dividend of 35 cents a share.
Wells Fargo is Buffett's largest holding, comprising 22.6% of the Berkshire Hathaway portfolio as of June 30. In the most recently
reported quarter, Buffett maintained a 463.5 million-share position in the stock.
TheStreet Ratings team rates Wells Fargo as a buy with a ratings score of A. TheStreet Ratings team has this to say about its
recommendation:
"We rate Wells Fargo (WFC) a buy. This is based on the convergence of positive investment measures, which should help this stock
outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price
performance, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the
fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth
and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes
without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still
has good upside potential despite the fact that it has already risen in the past year.
The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks
industry average. The net income increased by 3.8% when compared to the same quarter one year prior, going from $5,519.00
million to $5,726.00 million.
The gross profit margin for Wells Fargo is currently very high, coming in at 94.48%. It has increased from the same quarter the
previous year. Along with this, the net profit margin of 25.94% is above that of the industry average.
Wells Fargo's earnings per share improvement from the most recent quarter was slightly positive. The company has
demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue.
During the past fiscal year, Wells Fargo increased its bottom line by earning $3.89 versus $3.36 in the prior year. This year, the
market expects an improvement in earnings ($4.12 versus $3.89).
Despite the weak revenue results, WFC has outperformed against the industry average of 12.7%. Since the same quarter one
year prior, revenues slightly dropped by 1.7%. The declining revenue has not hurt the company's bottom line, with increasing
earnings per share.
You can view the full analysis from the report here: WFC Ratings Report
Must Read: 10 Stocks George Soros Is Buying in 2014
4. Coca-Cola
Coca-Cola (KO) has a current yield of 2.8%, paying a quarterly dividend of 30.5 cents a share.
Coca-Cola is Buffett's second-largest holding, comprising 15.8% of the Berkshire Hathaway portfolio as of June 30. In the most recently
reported quarter, Buffett maintained a 400 million-share position in the stock.
TheStreet Ratings team rates Coca-Cola as a buy with a ratings score of A. TheStreet Ratings team has this to say about its
recommendation:
"We rate Coca-Cola (KO) a buy. This is based on the convergence of positive investment measures, which should help this stock
outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its expanding profit
margins, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the
company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
The gross profit margin for Coca-Cola is rather high; currently it is at 65.60%. It has increased from the same quarter the
previous year. Along with this, the net profit margin of 20.63% is above that of the industry average.
Coca-Cola's earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has
suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the
coming year. During the past fiscal year, Coca-Cola reported lower earnings of $1.90 versus $1.96 in the prior year. This year,
the market expects an improvement in earnings ($2.08 versus $1.90).
KO, with its decline in revenue, slightly underperformed the industry average of 4.2%. Since the same quarter one year prior,
revenues slightly dropped by 1.4%. The declining revenue appears to have seeped down to the company's bottom line,
decreasing earnings per share.
The change in net income from the same quarter one year ago has significantly exceeded that of the Beverages industry
average, but is less than that of the S&P 500. The net income has decreased by 3.0% when compared to the same quarter one
year ago, dropping from $2,676.00 million to $2,595.00 million.
Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak
earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively
expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these
higher price levels.
You can view the full analysis from the report here: KO Ratings Report
Must Read: 7 Stocks Warren Buffett Is Selling in 2014
3. Exxon Mobil
Exxon Mobil (XOM) has a current yield of 2.9%, paying a quarterly dividend of 69 cents a share.
Exxon Mobil is Buffett's seventh-largest holding, comprising 3.8% of the Berkshire Hathaway portfolio as of June 30. In the most
recently reported quarter, Buffett maintained a 41.1 million-share position in the stock.
TheStreet Ratings team rates Exxon Mobil as a buy with a ratings score of B-. TheStreet Ratings team has this to say about its
recommendation:
"We rate Exxon Mobil (XOM) a buy. This is driven by a number of strengths, which we believe should have a greater impact than any
weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be
seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, increase in net income
and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the
company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
XOM's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues
slightly increased by 2.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against
the S&P 500 and exceeded that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 28.0% when
compared to the same quarter one year prior, rising from $6,860.00 million to $8,780.00 million.
Net operating cash flow has increased to $10,202.00 million or 32.78% when compared to the same quarter last year. The firm
also exceeded the industry average cash flow growth rate of -5.04%.
XOM's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been
very successful management of debt levels. Despite the fact that XOM's debt-to-equity ratio is low, the quick ratio, which is
currently 0.58, displays a potential problem in covering short-term cash needs.
You can view the full analysis from the report here: XOM Ratings Report
Must Read: 7 Stocks Warren Buffett Is Selling in 2014
2. Procter & Gamble
Procter & Gamble (PG) has a current yield of 3.1%, paying a quarterly dividend of 64.25 cents a share.
Procter & Gamble is Buffett's sixth-largest holding, comprising 3.9% of the Berkshire Hathaway portfolio as of June 30. In the most
recently reported quarter, Buffett maintained a 52.8 million-share position in the stock.
TheStreet Ratings team rates Procter & Gamble as a buy with a ratings score of A-. TheStreet Ratings team has this to say about its
recommendation:
"We rate Procter & Gamble (PG) a buy. This is based on the convergence of positive investment measures, which should help this stock
outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings
per share, increase in net income, expanding profit margins, good cash flow from operations and increase in stock price during the past
year. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Procter & Gamble has improved earnings per share by 39.1% in the most recent quarter compared to the same quarter a year
ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this
trend should continue. During the past fiscal year, Procter & Gamble increased its bottom line by earning $3.99 versus $3.87 in
the prior year. This year, the market expects an improvement in earnings ($4.45 versus $3.99).
The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against
the S&P 500 and exceeded that of the Household Products industry average. The net income increased by 37.5% when
compared to the same quarter one year prior, rising from $1,875.00 million to $2,579.00 million.
The gross profit margin for Procter & Gamble is rather high; currently it is at 51.99%. It has increased from the same quarter
the previous year. Along with this, the net profit margin of 12.79% is above that of the industry average.
Net operating cash flow has slightly increased to $4,506.00 million or 2.59% when compared to the same quarter last year. In
addition, Procter & Gamble has also modestly surpassed the industry average cash flow growth rate of -0.55%.
Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our
attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market.
However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past
year.
You can view the full analysis from the report here: PG Ratings Report
Read More: 10 Stocks George Soros Is Buying in 2014
1. General Motors
General Motors (GM) has a current yield of 3.6%, paying a quarterly dividend of 30 cents a share.
General Motors is Buffett's 14-largest holding, comprising 1.1% of the Berkshire Hathaway portfolio as of June 30. In the most recently
reported quarter, Buffett increased his position in the stock by 9.9% to 32.96 million total shares.
TheStreet Ratings team rates General Motors as a buy with a ratings score of B. TheStreet Ratings team has this to say about its
recommendation:
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"We rate General Motors (GM) a buy. This is driven by multiple strengths, which we believe should have a greater impact than any
weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be
seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. We
feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
The revenue growth came in higher than the industry average of 11.2%. Since the same quarter one year prior, revenues
slightly increased by 1.5%. This growth in revenue does not appear to have trickled down to the company's bottom line,
displayed by a decline in earnings per share.
The debt-to-equity ratio is somewhat low, currently at 0.95, and is less than that of the industry average, implying that there has
been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its
quick ratio of 0.81 is somewhat weak and could be cause for future problems.
General Motors has experienced a steep decline in earnings per share in the most recent quarter in comparison to its
performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the
past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, General Motors
reported lower earnings of $2.35 versus $2.93 in the prior year. This year, the market expects an improvement in earnings
($2.68 versus $2.35).
Net operating cash flow has decreased to $3,830.00 million or 21.72% when compared to the same quarter last year. Despite a
decrease in cash flow of 21.72%, General Motors is in line with the industry average cash flow growth rate of -26.58%.
The share price of General Motors has not done very well: it is down 7.68% and has underperformed the S&P 500, in part
reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Despite the stock's
decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other
stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
You can view the full analysis from the report here: GM Ratings Report
For Warren Buffett's top 30 holdings, visit the Warren Buffett portfolio at Stockpickr.
Must Read: 7 Stocks Warren Buffett Is Selling in 2014
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