6 Highest Yielding Stocks In Warren Buffett's Portfolio: Should They Be In Yours?

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Includes: BRK.A, BRK.B, COP, GE, GSK, INTC, MTB, SNY
by: Dividend Kings
Value-investing guru Warren Buffett is regarded throughout the investing community as one of the best investors of all time. The financial media talking heads analyze his every move and give him accolades for his impressive long-term returns. But not all of his investing decisions over the years have given him the returns that we’ve come to expect.

The six highest yielding stocks currently in his 33-stock portfolio, which all return about 4%, are General Electric Co. (NYSE:GE), Intel Corp. (NASDAQ:INTC), ConocoPhillips (NYSE:COP), M&T Bank Corp (NYSE:MTB), Sanofi Aventis ADS (NYSE:SNY), and GlaxoSmithKline PLC ADS (NYSE:GSK). While offering juicy yields at their current price, digging into Buffet’s investment in these stocks shows that they haven’t been among Warren’s best decisions. Let’s take a look at the numbers.

Buffett currently owns 777,777,900 shares of General Electric, which makes up about .20% of his portfolio. Its dividend yield is 4.1% with a price-to-book of 1.3 and a price-to-earnings of 11.2. Buffett hasn’t increased or decreased the amount of his GE shares in the last 5 years but his average price-per-share is $16.79, well above the current price of 14.73. While still impressive, the dividend yield to Buffet is 3.5%, with a price-to-book of 1.4.

ConocoPhillips, currently selling at $66.93 per share, makes up 3.1% of Buffett’s total portfolio, and has a market value of 1.8 billion. He’s been consistently dumping shares since the purchase of 140+ million shares at over $80 in the second and third quarters of 2008, which just so happens to be when oil peeked at over $140 dollars a barrel and the price of energy stocks were at or near their all-time highs. Due to these ill-timed purchases, Buffett's average price-per-share is $85.43, while the average price of the shares he’s dumped is $48.65. Conoco’s dividend yield is 3.9%, with a price-to-book of 1.4, and a price-to-earnings of 8.3. At his average purchase price, the dividend yield to Buffet is just over 3%, with a price-to-book of 1.77.

5,382042 shares of M&T Bank Corp, valued at $376,204,000, make up .637% of Buffett’s current portfolio. Currently trading at $67.43 per share, Buffett’s average price paid sits at $79.35. M&T’s dividend yield is 4.1% with a price right at book value, and a price-to-earnings ratio of 9.9. At Buffett’s average purchase price, his dividend yield is 3.5% and his price-to-book ratio increases to 1.1.

With a market value of 130 million, Buffett's 4,063,675 shares of Sanofi Aventis comprise .2257% of his total portfolio. While currently trading at 32.21, his average price-per-share is $44.89. He steadily added to his holdings from 2006 through 2010 without selling any shares. Sanofi has a dividend yield of 4.2%, a price-to-book of 1.1, and a P/E of 8.1. The dividend yield at Buffett’s average purchase price is 3%, with price-to-book increasing to 1.6.

Buffett holds 1,510,500 shares of GlaxoSmithKline, with a market value of $62,486,315 and sits at .1056 of his total portfolio. All shares were purchased in the fourth quarter of 2007 for $51.45, a premium to today’s price of $42.03. He’s neither purchased nor sold any shares since. Glaxo’s current dividend yield is a whopping 5.3%, while its price-to-book stands at 8.0, with a price-to-earnings ratio of 11.6. Unfortunately for Warren, the yield on his average purchase price is only 4.3%, with an escalated price-to-book of 9.9.

Of the dividend dandies in his portfolio, Intel looks the most impressive. In past quarters, Buffett added a 9,333,000 position at $21.47 per share, making it .3373% of his total portfolio. At its current price of $22.73, Intel offers a dividend yield of 3.8%, a price-to-book of 2.6, and a price-to-earnings of 9.6. As the price has appreciated by more than a dollar, at Buffett’s purchase price, the dividend yield to him is 4%, with a price-to-book of 2.4.

Although Buffett is undoubtedly in the top tranche of value investors, his timing on five of his six highest yielding equity positions shows that he not infallible. Some of his decisions in the pre-crises investment arena show that he was caught off guard just like other mere-mortal investors.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.