NEW YORK (TheStreet) -- Warren Buffett, one of the greatest investors of all time, is 84 years old, yet his stock market wisdom is in as high demand as ever. For instance, nearly 40,000 people attended the latest Berkshire Hathaway annual shareholders' meeting.
Buffett invests in businesses with durable competitive advantages that can compound his money year after year. This article examines the five Buffett-owned dividend stocks with the highest yields. All five have dividend yields over 3% and are all stocks that have passed Buffett's strict quality requirements. The stocks in this article could improve your dividend portfolio as they combine Buffett's safety-first approach with high yields for current income.
The stocks are ranked in order of yield, from lowest to highest -- click through to the end to see which of Buffett's holdings has the highest dividend yield.
5. Sanofi (SNY)
Sanofi is a global pharmaceutical company. The company's stock currently has a 3.2% dividend yield. Sanofi has consistently rewarded shareholders with steady or rising dividend payments every year for 21 consecutive years (adjusting for changes in the dollars-to-euros conversion rate). The company is one of the largest pharmaceutical companies in the world based on its market cap of over $130 billion.
Sanofi is headquartered in Paris. In 2014, The company generated 82% of its revenue from pharmaceuticals, 12% from vaccines, and 6% from animal healthcare products. Sanofi's global reach gives it heavy exposure to emerging markets. In 2014, 36% of sales came from emerging markets.
Buffett requires a strong competitive advantage to invest in a business. Sanofi's excellent research and development department is the source of its competitive advantage. The company's ability to continuously develop new and innovative treatments drives revenue.
Sanofi's rate of new product development is increasing. From 2007 to 2013, the company launched 10 products. From 2014 to 2020, Sanofi is expecting 18 product launches. New product launches will drive continued growth for Sanofi.
Sanofi is a shareholder-friendly company. It has recently begun to focus on share repurchases. Sanofi has reduced its net share count by about 1% in the last two years, with most of that coming last year. Sanofi will likely continue to increase share repurchases as it continues to generate strong cash flows from its pharmaceutical sales.
Sanofi has a forward-price-to-earnings ratio of 16.1 which is in line with other large pharmaceutical manufacturers. The company appears to be trading around fair value at this time.