The 7 Best Warren Buffett Dividend Stocks

The best Warren Buffett dividend stocks are expected to produce impressive returns for the Berkshire Hathaway equity portfolio. Here are seven with market-beating yields.

Warren Buffett
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While Berkshire Hathaway (BRK.B (opens in new tab)) doesn't pay a dividend, more than half of the stocks in the holding company's nearly $300-billion equity portfolio do. And the best Warren Buffett dividend stocks produce a substantial amount of income for the Oracle of Omaha.

The best dividend stocks can create impressive total returns (price plus dividends) for investors over the long term, and that's certainly been the case with Berkshire Hathaway. Over the last 10 years, BRK.B has delivered a total return of 13.1%, compared to the S&P 500 Index's 12.6% total return. And in the last three months during extreme market volatility, BRK.B's total return is 10.8%, nearly 11 percentage points higher than the broad market.

Here's what Buffett had to say about dividends in his 2020 letter to shareholders (opens in new tab):

"BNSF has paid substantial dividends to Berkshire – $41.8 billion in total. The railroad pays us, however, only what remains after it both fulfills the needs of its business and maintains a cash balance of about $2 billion," Buffett wrote. "This conservative policy allows BNSF to borrow at low rates, independent of any guarantee of its debt by Berkshire."

And that's an internally owned business. The company's dividend-paying stocks are expected to generate more than $6 billion in dividend income over the next 12 months, with 71% coming from just five stocks.  

Of all the dividend stocks held by Berkshire Hathaway, Apple (AAPL (opens in new tab)) is one of the few that doesn't yield more than the S&P 500's current 1.7% yield. For this reason, it isn't one of the best dividend stocks to buy from the Berkshire Hathaway equity portfolio. However, all the names featured here have market-beating yields. With that in mind, here are seven of the best Warren Buffett dividend stocks.

Data is as of Dec. 28. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks are listed in order of lowest to highest dividend yield. Berkshire Hathaway portfolio data is provided by WhaleWisdom.com (opens in new tab)

Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.