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Warren Buffett's Highest-Yielding Stocks

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If the stock continues to stay priced this low, you will likely continue to see Berkshire add shares to its holding.

General Motors

At 3.6%, General Motors is Berkshire's second-highest-yielding stock. Berkshire first invested in General Motors in 2012, buying 15 million shares , and increased its stake to 40 million shares by the end of 2013 . Berkshire sold 10 million shares in the first quarter of this year , but then added back nearly 3 million shares to its holdings for current total of 32.96 million shares . It's important to note that Buffett said these purchase decisions are being made by Berkshire deputy investment manager Ted Weschler.

Also worth noting is that General Motors did not pay a dividend until this year. The automaker initiated its $0.30 quarterly payout in March, before its well-publicized recall issues blew up. Buffett has said publicly that he supports new GM CEO Mary Barra and "was really impressed" when they had lunch.

Fool auto analyst John Rosevear last year gave his thoughts on why Berkshire was purchasing General Motors and recently took a deep look at General Motors' situation so far in 2014 , including how the company turnaround was going amid the recall issues. In short, "GM's long-term story remains largely intact. Its newest vehicles are hugely improved; it is making progress in Europe; sales in China continue to grow; and while GM's luxury brand Cadillac has hit some bumps in the U.S., it continues to gain ground overseas."

Only time will tell if Berkshire's General Motors purchases will work out, but they fit Buffett's classic move of buying a strong company while it is undergoing short-term pain. These have worked out for Buffett before and hopefully will work out in this case.

Foolish takeaway

Buffett's dividend-paying stocks come from strong companies with wide moats. If you hold on to strong dividend companies for years, you can also turn an initial investment into a small fortune.

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The article Warren Buffett's Highest-Yielding Stocks originally appeared on Fool.com.

Dan Dzombak has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, General Motors, Procter & Gamble, and Wells Fargo. The Motley Fool owns shares of Wells Fargo and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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