3 Highest Yielding Warren Buffett Stocks

Warren Buffett's Berkshire Hathaway portfolio is chock-full of dividend-paying stocks, but there is a handful of stocks that are yielding near an astonishing 5%. These high-yielding dividend stocks pay higher than most bonds including high-risk junk bonds. These stocks offer a nice passive income stream for investors. Below are the three highest-yielding Buffett stocks that may be worth a look if you want a high-yield, passive income.

1. Verizon (NYSE: VZ) is the highest yielding stock in Buffett's portfolio at a 4.8% yield. The company pays a $0.64 per share quarterly dividend, which was recently raised 2% from the prior dividend. The annual dividend rate is $2.56. Buffett owns 158.8 million shares of Verizon, which he has been raising aggressively since the fourth quarter of 2020. In addition to the high dividend yield, the earnings yield is nearly 10%, suggesting that the company is not giving all the money back to shareholders via the dividend but retaining about half of the earnings. Raymond James analyst Frank Louthan recently raised estimates on Verizon and wireless net additions. Louthan said the company is seeing positive momentum with wireless and Fios broadband, and churn is trending favorably as well.

2. AbbVie (NYSE: ABBV) is another Buffett stock with a fat dividend. The dividend yield is 4.7% with the company paying out $1.30 per quarter, or $5.20 per year. The company has a history of raising its dividend at the beginning of the year, so look for that in January 2022. AbbVie is a stock that Buffett has been trimming, but he still owns over 20 million shares as of the latest quarter. AbbVie has an earnings yield of around 11%, so the company is retaining nearly 60% of its earnings. Shares saw weakness in late August after the FDA communicated a requirement for boxed revisions for three oral JAK inhibitors - XELJANZ/XELJANZ XR (PFE), OLUMIANT (LLY), and RINVOQ (ABBV) to include a warning of serious heart-related adverse events, cancer, blood clots, and death. Mizuho Securities analyst Vamil Divan said that the sell-off was overdone and believe investors are now pricing in a "worst-case” scenario for Rinvoq, while missing the other attractive parts to the AbbVie story.

3. STORE Capital (NYSE: STOR) yields 4.7% with the company paying a quarterly dividend of $0.385 per share, which was raised 6.9% in September. The 10 cents per share annual dividend increase with that hike was the largest per share increase since the company went public in 2014. The annual dividend is $1.54 per share. STOR is a REIT that invests in Single Tenant Operational Real Estate. Buffett's Berkshire owns 24.4 million shares of STOR. While the dividend is strong for STOR, the stock may not have a ton more further upside, according to one analyst. Raymond James analyst RJ Milligan downgraded shares in August given the valuation and a lower growth profile relative to a number of peers. Still, he notes the multiple expansion is warranted given the proven durability of STOR's cash flows, though they see less upside for multiple expansion from current levels. Shares of STOR are down 6% since that call, making the yield even more attractive for dividend investors.

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