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The following is the list of 10 high-yield stocks, which legendary investor Warren Buffett is holding.

Stock

Symbol

Yield

Shares Held - 09/30/2011

Change in shares vs. last quarter

Glaxosmithkline Plc

GSK

4.80%

1510500

0

General Electric Co.

GE

4.10%

7777900

0

M&T Bank Corp.

MTB

3.90%

5382040

18219

Conocophillips

COP

3.80%

29100937

-700

Sanofi-Aventis

SNY

3.80%

4063675

0

Intel Corporation

INTC

3.60%

9333000

9333000

Johnson & Johnson

JNJ

3.60%

37446788

-5177775

Kraft Foods Inc.

KFT

3.20%

89746708

-9720916

Procter & Gamble Co.

PG

3.20%

76766036

0

General Dynamics Corp.

GD

3.00%

3064422

3064422

Source: 13F filing

My favourite among above stocks are Kraft and Intel Corp. However I would like to avoid General Dynamics because of its defense exposure, which will get adversely affected due to federal budget cuts.

Kraft is the largest U.S. food manufacturer, and second-largest in the world, behind Nestle (OTCPK:NSRGY). I am bullish on Kraft because of its international growth potential and value creation from the planned spin-off.

Kraft is seeing significant growth in international markets, and in the third quarter, developing markets contributed around 66% of incremental year/year segment profits, and international contributed 86%. In the near future, I expect it will continue to enable Kraft to derive faster-than-average peer growth. It will also improve Kraft’s debt ratio, enabling it to return more cash to its shareholders in the future.

Another major catalyst for Kraft’s stock is its planned split into two companies. Kraft’s business consists of its high-growth snacks business and the stable return grocery business. Kraft is planning to split up these two businesses in FY12. This will unlock significant value by highlighting an above peer growth profile of the global snacks business, driving operational improvements, and by allowing each company to pursue different capital allocation priorities.

Kraft is trading at 14x FY12 EPS, which is over 12% discount to its average 10-year historical PE multiple of 16x. I believe this is a good opportunity to initiate a long position in the company.

Intel is another good buy. It positively surprised the Street last quarter by posting better-than-expected results, despite macro headwinds and sluggish industry PC unit growth. According to Gartner, global PC shipments grew 3.2% in Q3. Intel’s 19% revenue growth clearly represents a significant outperformance. The primary drivers were 10%-12% higher chip prices from feature additions (graphics) and superior competitive position. I believe current year and next year consensus sell-side estimates for Intel are likely to prove conservative given its strong product execution (for example: Sandy Bridge), pricing, and secular growth in servers. Trading at 9.6x forward earnings, the stock does not look expensive and there is a good chance of multiple expansion. A 3.6% dividend yield is an added benefit for investors looking to buy the stock.

Source: 10 Warren Buffett Stocks With More Than 3% Yield