Warren Buffett is one of the best investors of the past 60 years -- probably the best. (I haven’t made up my mind whether Jim Simons, who started investing at a late age, is better than he is). His track record for the first 50 years of his investment career is absolutely amazing. Unfortunately, for the past 5-10 years his alpha went down to zero from around 10-12 percent per year.
We compiled Buffett's high-dividend stock picks at the end of March. We required a minimum dividend yield of 2.7%; yields were obtained from Yahoo Finance. Here are Buffett's favorite high dividend stock picks:
1. GlaxoSmithKline (NYSE:GSK) is one of the major drug manufacturers in the world. GSK recently traded at $43 and has a 4.9% dividend yield. GSK gained 34.3% during the past 12 months. The stock has a market cap of $109.4 billion and P/E ratio of 37.7. Buffett had $58 million invested in GSK shares. Bruce Berkowitz’s Fairholme initiated $7.3 million GSK position during first quarter of 2011. Five-year average dividend yield of GSK is 4.40%.
2. Conoco Phillips (NYSE:COP) operates as an integrated energy company worldwide. COP recently traded at $75.88 and has a 3.5% dividend yield. COP gained 61.3% during the past 12 months. The stock has a market cap of $107 billion and P/E ratio of 9.1. Buffett had $2.3 billion invested in COP shares. Fourteen hedge funds had COP among their top 10 holdings. Hedge funds collectively own 1% of COP’s outstanding shares. The stock gained 8.6% so far this year. First Eagle and D.E. Shaw had large holdings in COP at the end of March.
3. Johnson & Johnson (NYSE:JNJ) is one of the leading healthcare companies worldwide. JNJ recently traded at $67.3 and has a 3.4% dividend yield. JNJ gained 18% during the past 12 months. The stock has a market cap of $184.5 billion and P/E ratio of 15.3. Buffett had $2.53 billion invested in JNJ shares. JNJ is one of the top 10 most popular stocks among hedge funds. Hedge funds had $4.7 billion in JNJ at the end of March.
4. Procter & Gamble Co. (NYSE:PG) provides consumer packaged goods worldwide. PG recently traded at $64.27 and has a 3.3% dividend yield. PG gained 11.7% during the past 12 months. The stock has a market cap of $179 billion and P/E ratio of 17. Buffett had $4.7 billion invested in PG shares. Fisher Asset Management and Phill Gross and Robert Atchinson’s Adage Capital Management are other high-profile PG investors.
5. Kraft Foods Inc. (KFT) provides snacks, confectionery, and quick meal products worldwide. KFT recently traded at $35.47 and has a 3.3% dividend yield. KFT gained 32.2% during the past 12 months. The stock has a market cap of $62.4 billion and P/E ratio of 20.6. Buffett had $3.3 billion invested in KFT shares. One of the largest positions of the Bill Ackman’s Pershing Square is Kraft Foods, with $697 million at the end of March.
6. Sanofi Aventis (NYSE:SNY) is a diversified healthcare company operating worldwide. SNY recently traded at $40.4 and has a 3.3% dividend yield. SNY gained 44.1% during the past 12 months. The stock has a market cap of $105 billion and P/E ratio of 14.6. Buffett had $143 million invested in SNY shares.
7. M & T Bank Corporation (NYSE:MTB) provides commercial and retail banking services. MTB recently traded at $89.03 and has a 3.1% dividend yield. MTB gained 8.4% during the past 12 months. The stock has a market cap of $10.8 billion and P/E ratio of 14.5. Buffett had $475 million invested in MTB shares.
8. General Electric Co. (NYSE:GE) provides technology, media, and financial services worldwide. GE recently traded at $19.2 and has a 3.1% dividend yield. GE gained 42.5% during the past 12 months. The stock has a market cap of $204 billion and P/E ratio of 16.01. Buffett had $156 million invested in GE shares. Ray Dalio’s second largest stock holding is GE. Bridgewater boosted its holdings by 20% during the first quarter. D.E. Shaw and Berkowitz’s Fairholme are the largest holders of GE. Sandy Nairn’s Edinburgh Partners, James Dinan’s York Capital, Buffett’s Berkshire, and Cohen’s SAC Capital had at least $100 million in GE at the end of March.
9. Coca-Cola (NYSE:KO) provides nonalcoholic beverage concentrates and syrups worldwide. KO recently traded at $68.09 and has a 2.8% dividend yield. KO gained 40% during the past 12 months. The stock has a market cap of $156 billion and P/E ratio of 13.1. Buffett had $13.3 billion invested in KO shares. Between 1988 and 2011, the market cap of Coca Cola rose from $18 billion to $149.3 billion. Coca-Cola recently traded at $65.21 and Buffett's stake in the company is 8.7%. Buffett made more than $7 billion with his Coca-Cola investment. Coca-Cola gained 12% in the fourth quarter and has lost 1% since the end of March.
10. United Parcel Service Inc. (NYSE:UPS) is a package delivery company operating worldwide. UPS recently traded at $73.96 and has a 2.8% dividend yield. UPS gained 34% during the past 12 months. The stock has a market cap of $73 billion and P/E ratio of 19.3. Buffett had $106 million invested in UPS shares.
11. Wal-Mart Stores, Inc. (NYSE:WMT) operates retail stores worldwide. WMT recently traded at $53.51 and has a 2.7% dividend yield. WMT gained 14.3% during the past 12 months. The stock has a market cap of $185.8 billion and P/E ratio of 11.7. Buffett had $2.03 billion invested in WMT shares.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.