Top 10 Warren Buffett Dividend Stocks

Warren Buffett, the “Sage of Omaha”, is one of the world’s premier fund managers. The first 50 years of his career was record-breaking, earning him nods from his investing peers, as well as the mainstream media. His performance since the turn of the century has been down to say the least; Warren Buffett’s alpha dropped from 10-12% per year to around zero. However, he still has a good eye for large cap, dividend yielding stocks. Here is a list of his top 10 dividend stocks:

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1. Coca-Cola Company (KO), the famous soft drink company, is Buffett’s largest stock. His position is valued at $13.4 billion. It recently traded at $65.42 and has a dividend yield of 2.80%. The stock has a $150.21 billion market cap and a price to earnings ratio of 12.19. Boykin Curry of Eagle Capital Management is also a fan.

2. Procter & Gamble Co. (PG) is a global consumer packaged goods company and it is Buffett’s fourth largest position at $4.88 billion. PG has a market cap of $172.67 billion and a dividend yield of 3.30%. It recently traded at $62.84 and has a price to earnings ratio of 15.99.

3. Kraft Foods, Inc. (KFT) is Buffett’s fifth largest position; he owns a $3.5 billion stake in the company. KFT is a food manufacturing company and has a market cap of $58.42 billion and a price to earnings ratio of 18.90. It has a dividend yield of 3.50%. It recently traded at $33.08 a share.

4. Johnson & Johnson (JNJ) is one of the world’s leading healthcare companies. Buffett owns a $2.8 billion position in the company. JNJ offers a dividend yield of 3.60%. It boasts a market cap of $170.12 billion and a price to earnings ratio of 14.85. JNJ recently traded at $62.08.

5. ConocoPhillips (COP) is a global energy company. It has a dividend yield of 4.20% and a market cap of $83.74 billion. COP has a 7.69 price to earnings ratio; it recently traded at $60.99 per share. Buffett owns a more than $2 billion stake in the company.

6. M&T Bank Corporation (MTB) provides commercial and retail banking. It has a 4.00% dividend yield and recently traded at $68.52 a share. It has a market cap of $8.61 billion and a price to earnings ratio of 9.66. Buffett owns $471.7 million in the company. MTB is also a favorite of Jean-Marie Eveillard, First Eagle Investment Management.

7. Sanofi Aventis (SNY) is a global healthcare services company. Buffett owns $163 million in the company. SNY offers a 4.00% dividend yield and a price to earnings ratio of 14.61. It has a market cap of $85.58 billion and recently traded at $31.88.

8. General Electric Co. (GE) is a diverse company; it provides media, technology and financial services worldwide. Buffett owns $146.7 million in the company. GE has a dividend yield of 3.990% and recently traded at $14.69 per share. It has a $155.72 billion market cap and a price to earnings ratio of 11.56.

9. United Parcel Service, Inc. (UPS) is a global package delivery service that delivers a 3.30% dividend yield. It has a market cap of $61.02 billion and a price to earnings ratio of 15.33. UPS is Buffett’s 19th largest position by value, at $104 million. It recently traded for $62.22/share.

10. GlaxoSmithKline (GSK), the drug manufacturer, is Buffett’s 21st largest position at $64.8 million. GSK has an impressive dividend yield of 5.00%. It recently traded at $40.53. GSK boasts a market cap of $103.56 billion and a price to earnings ratio of 20.66. Ken Fisher, Fisher Asset Management is also a fan.

Is JNJ A Good Stock To Buy?

“Is JNJ A Goog Stock To Buy” was written 2 years ago. Please read on and share your thoughts with us.

Johnson & Johnson (JNJ) is a high dividend stock. With a dividend yield of 3.52%, it is popular among defensive investors who seek to protect themselves from inflation. Additionally, the company has more than 250 operating companies conducting business worldwide. Therefore, it is also a good choice for investors who want to have foreign market exposure. JNJ is very popular among hedge funds. Warren Buffett had $2.8 billion invested in JNJ. Ken Fisher, Ric Dillon, Bill Miller, Jean-Marie Eveillard and many other famous hedge fund managers were also bullish about the stock. We are going to take a closer look at Johnson and its comparable companies, including Abbott Laboratories (ABT), Covidien (COV), and Novartis AG (NVS) to determine which stocks promise higher returns for investors.

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The company reported revenues of $16 billion for the third quarter of 2011. Second quarter operating income declined 19% to $3.7 billion. The company has $10.95 billion in net cash on its balance sheet. Its EPS is $4.90 during the past 12 months. Johnson is expected to earn $4.97 in 2011 and $5.24 in 2012. The stock recently traded at $64.78. Its current PE ratio is 15.77.

Valuation:

Johnson’s earnings are expected to grow at 6% over the next five years. This implies that its PE ratio using its 2014 earnings is around 11.00. Abbott’s expected growth rate is 8.11% and its corresponding PE ratio is 9.10. Covidien is expected to grow at 11.29% and its PE ratio using its 2014 earnings is around 8.70. Navartis is expected to grow by 5.45% over the next 5 years and its PE ratio using its 2014 earnings is around 8.78. Johnson looks overvalued compared to other stocks in the group. Covidien and Navartis seem to be trading at a discount as their PE ratios in 2014 are below 9.

Volatility:

Volatility is generally used as a measure of risk. Johnson’s beta is 0.62, Abbott’s beta is 0.31, Covidien’s beta is 0.90 and Navartis’ beta is 0.67. All these stocks are less risky than the market and Abbott is the most stable one. Johnson’s beta is the second lowest among the group, which means that investors bear relatively low risk purchasing JNJ.

Hedge Fund Ownership:

Stocks that are favored by hedge funds tend to outperform the market by a few percentage points on the average. Johnson was the most popular stock among hedge funds at the end of second quarter. It was held by 57 hedge funds. Abbott was the second popular stock. 39 hedge funds were bullish about it. Ken Fisher, Ric Dillon, and Bill Miller were bullish about both JNJ and ABT. There are 33 hedge funds bullish about Covidien and 21 bullish about Navartis.

Insider Purchases:

Stocks purchased by insiders tend to outperform the market on the average. Johnson and Covidien both were purchased by one insider during the past six months. Other stocks do not have insider purchases during the same period.

Overall our analysis points out that Johnson & Johnson is a bit overvalued compared to other stocks in the group. However, other statistics of the stock beat its comparables. JNJ has low risk and is the most popular stock among hedge fund managers and corporate insiders, indicating some form of perceived value in the stock. We like Johnson & Johnson and we urge investors to do an in-depth analysis of the stock for their portfolios.

Is Halliburton A Good Stock To Buy?

“Is Halliburton A Good Stock To Buy?” was written 2 years ago when it was trading at $35. We’d like to hear your thoughts.

Halliburton (HAL) is an oilfield services company. It conducts business in approximately 80 countries in North America, Latin America, Europe, Africa and Asia. Investors who want to protect themselves from the decline in dollar can gain foreign markets exposure buy purchasing HAL stocks. Halliburton has produced a positive trend in earnings per share over the past five quarters and has posted better than expected results. Ken Fisher initiated a brand new $280+ million in HAL during the second quarter. Ken Griffin also had over $100 million invested in the stock. We are going to take a closer look at Halliburton and its comparable companies in the Oil & Gas Equipment & Services industry, including Baker Hughes Incorporated (BHI), Schlumberger Limited (SLB), and National Oilwell Varco (NOV) to determine which stocks promise higher returns for investors.

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The company reported revenues of $6.55 billion for the third quarter of 2011. Second quarter operating income rose 43% to $1.2 billion. The company has $1.64 billion in net debt on its balance sheet. Its EPS is $3.04 during the past 12 months. Halliburton is expected to earn $3.35 in 2011 and $4.13 in 2012. The stock recently traded at $35.06. Its current PE ratio is 12.68.

Valuation:

Halliburton’s earnings are expected to grow at 18% over the next five years. This implies that its PE ratio using its 2014 earnings is around 6.10. BHI’s expected growth rate is 23% and its corresponding PE ratio is 6.39. Schlumberger is expected to grow at 22.33% and its PE ratio using its 2014 earnings is around 8.82. NOV is expected to grow by 18% over the next 5 years and its PE ratio using its 2014 earnings is around 8.73. Halliburton looks undervalued compared to other stocks in the group. BHI is also trading at a discount assuming its growth estimate is accurate.

Volatility:

Volatility is generally used as a measure of risk. Halliburton’s beta is 1.64, BHI’s beta is 1.57, Schlumberger’s beta is 1.42 and NOV’ beta is 1.52. Halliburton looks to be the most risky stock in the group. Schlumberger has the lowest risk compared to the comparables but it is still more volatile than the market.

Hedge Fund Ownership:

Stocks that are favored by hedge funds tend to outperform the market by a few percentage points on the average. Schlumberger was the most popular stock among hedge funds at the end of second quarter. It was held by 49 hedge funds. Halliburton was the second popular stock. 42 hedge funds were bullish about it. There are 33 hedge funds bullish about BHI and 31 bullish about NOV. Ken Fisher was bullish about HAL, SLB and NOV.

Insider Purchases:

Stocks purchased by insiders tend to outperform the market on the average. Schlumberger was purchased by one insider during the past six months. Other stocks do not have insider purchases during the same period.

Schlumberger beat other stocks in Volatility, Hedge Fund Ownership and Insider Purchases, but its 2014 PE ratio is unfortunately the highest. On the other hand, Halliburton is the most undervalued stock in the group. Strong hedge fund interests in HAL also indicated some form of perceived value in the stock. We like Halliburton and we strongly urge investors to do an in-depth analysis of the stock for their portfolios.