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Mark Gilman

Here Are Warren Buffett's Favorite High-Yield Dividend Stocks

Warren Buffett's Berkshire Hathaway Inc. Class A (NYSE: BRK-A) lists numerous dividend stocks among its holdings, with the highest-yielding companies returning at least 3%. These dividend-paying stocks have created over $680 billion in value for shareholders, who have seen a 20.1% average annual return on BRK’s Class A shares.

Related: Like Dividends? Then You’ll Love These High-Yield Investments

Of the nearly 50 stocks in Buffett’s portfolio, the four dividend-paying stocks that currently provide the highest yield are:

Store Capital Corp. (NYSE:STOR

Store Capital is one of the largest and fastest-growing net-lease real estate investment trusts (REITs) in the U.S. It was founded in 2011 by a team of executives who worked together at other companies and forged a commitment to deliver value-creating real estate lease solutions and build long-lasting customer relationships.

The company comprises a diverse and growing real estate portfolio operated by middle market and larger companies and creates wealth through its lease-financing solutions.

Store issues dividends to shareholders from excess cash the company generates.

  • Shares Held - 14,754,811
  • Stake - 5.3%
  • % of Portfolio - 0.10%
  • Yield - 5.73%
  • Annual Dividend - $1.54
  • Last Dividend - $0.39 paid out to investors on July 15

Related: This REIT You've Probably Never Heard of Has Paid a Dividend Above 8% For The Last 5 Years

Verizon Communications Inc. (NYSE:VZ)

Though known and operated primarily as a wireless business that encompasses nearly 80% of its revenue and income, Verizon serves about 93 million postpaid and 24 million prepaid phone customers (following its acquisition of Tracfone), making it the largest wireless carrier in the U.S. Fixed-line telecom operations include local networks in the Northeast, which reach about 25 million homes and businesses, and nationwide enterprise services.

The latest price target for Verizon was reported by Wells Fargo on Friday, July 8, 2022, and set a price target of $52 with the expectation that the price will rise within 12 months (a possible 3.05% upside). 

Verizon Communications issues dividends to shareholders from excess cash the company generates. 

  • Shares Held - 1,380,111
  • Stake - 0.0%
  • % of Portfolio - 0.0%
  • Yield - 5.02%
  • Annual Dividend - $2.56
  • Last Dividend - $0.64 paid out to investors on August 1, 2022.

Citigroup Inc. (NYSE:C)

Citigroup is a global financial services company doing business in more than 100 countries and jurisdictions in primarily two segments — the global consumer banking segment and the institutional clients' group. The bank's primary operations are cross-border banking needs for multinational corporations, investment banking and trading and credit card services in the U.S. Citigroup issues dividends to shareholders from excess cash Citigroup generates.

  • Shares Held - 55,244,797
  • Stake - 2.8%
  • % of Portfolio - 0.80%
  • Yield - 4.08%
  • Annual Dividend - $2.04
  • Last Dividend - $0.51 paid out to investors on May 27, 2022.

Kraft Heinz Co. (NASDAQ:KHC)

The formerly Pittsburgh-based company’s logo (its headquarters is now in Chicago) may no longer be perched on the NFL Steelers' home stadium this year. Still, Kraft Heinz remains the third-largest food and beverage manufacturer in North America behind PepsiCo Inc. (NASDAQ:PEP) and Nestle ADR (OTC:NSRGY) and is the fifth-largest player in the world. Beyond its company-branded products, the firm's portfolio includes Oscar Mayer, Velveeta and Philadelphia Cream Cheese.

Outside North America, the firm's global reach includes a distribution network in Europe and emerging markets that drive around one-fifth of its consolidated sales base, as its products are sold in more than 190 countries and territories.

Kraft Heinz issues dividends to shareholders from excess cash Kraft Heinz generates. 

  • Shares Held - 325,634,818
  • Stake - 26.6%
  • % of Portfolio - 3.9%
  • Yield - 4.21%
  • Annual Dividend - $1.60
  • Last Dividend - $0.40 paid out to investors on June 24, 2022.

The reason for Buffett and those who invest in dividend stocks is simple. They consistently outperform stocks that don’t pay dividends. Berkshire is on pace to collect more than $6 billion in passive income. 

Looking for ways to boost your returns? Check out Benzinga's coverage on Alternative investments:

Image by Kent Sievers on Shutterstock

Originally published on July 18, 2022. 

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