Warren Buffett of Berkshire Hathaway is recognized as one of the greatest long-term investors of all time. In mid February Berkshire filed its 13F for the fourth quarter of 2012, disclosing many of its long equity positions as of the end of December; since Buffett tends to invest long term the holding company probably still owns most of these stocks. 13Fs can also be used to develop investment strategies; we have found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year and other techniques are likely possible as well. We went through Berkshire’s most recent 13F looking for stocks Warren Buffett likes which also pay high dividends (check out the full list of stocks Berkshire reported owning). Here are five stocks which Berkshire had over $75 million invested in at the end of December and which currently pay a dividend yield of at least 3%:
The Procter & Gamble Company (NYSE:PG) pays a 3% yield and Berkshire reported a position of almost 53 million shares in the megacap personal products company in its filing. With most of its products being consumer staples, Procter & Gamble’s beta is only 0.3; considering its large market cap it’s therefore a good prospect for income or defensive investors, though sales growth has been low as would be expected. Billionaire Bill Ackman’s Pershing Square was another major Procter & Gamble shareholder, owning nearly 28 million shares at the end of December (see more of Ackman's long stock picks).
Buffett had 24 million shares of ConocoPhillips (NYSE:COP) in his portfolio at the end of 2012. Like many oil majors, the earnings multiples for ConocoPhillips are fairly low- less than 10 for both trailing and forward P/Es. A 26% decline in the stock price in the last year has contributed to boosting the stock’s dividend yield above 4%, though of course the company is exposed to commodity prices. Yacktman Asset Management, managed by Donald Yacktman, reported a position of 6.6 million shares in ConocoPhillips, which was essentially unchanged from three months earlier.
Find three more income stocks Buffett owned: