Friday, January 27, 2012

Warren Buffett Stocks on the Top Dividend Increasers List

Warren Buffet, head of Berkshire Hathaway (BRK-A) (BRK-B), is considered the world's best stock investor and one of the three richest people in the world. Numerous books have been written about Buffett and many investors have tried to determine what his technique is for achieving investing success. Does he look for value, for growth, for dividends, for leading industries?

A review of the list of stocks that Buffett owns, available at, shows that 84% of the holdings are dividend payers. But just because a stock pays a dividend doesn't make it a good stock. There is another factor at play.

Take a look at the list of the top dividend increasing stocks, a list of stocks that have increased their dividends every year for at least 30 years, also available at One of the things that stand out is that several Buffett stocks are on the list. So not only does Warren Buffett just like dividend stocks, he is especially fond of stocks that have a very long track record of raising dividends on a regular basis.

As an example, Berkshire Hathaway has Johnson & Johnson (JNJ) as part of its portfolio. The company makes everything from Band-Aids to Tylenol to Neutrogena to Acuvue contact lenses. Then of course there is the popular Johnson's Baby Shampoo. The stock trades at 12 times forward earnings, and provides a favorable yield of 3.5%. Last year, the dividend was boosted by 5.6%. Dividends have been raised 48 years in a row.

Johnson & Johnson's fourth-quarter revenues rose by 3.9% from the same period last year. However, earnings suffered. Recalls, plant shutdown, and litigation caused net earnings per share to drop to $0.08 versus $0.70 for the prior year. Earnings were $1.13 per share excluding special items.

Procter & Gamble (PG) is another stock that shows up on both lists. This consumer goods company trades at 14 times forward earnings. For 54 years in a row, the company has bumped up it dividend, and now provides a 3.2% yield.

The company just reported earnings.Net profits tanked by 49% with earnings per share for the quarter at $0.57 versus $1.11 in the same quarter last year. The drop was due to goodwill write-downs, the economy, and increased competition. Although, quarterly sales grew by 4%.

To see the other Warren Buffett stocks that are also long term dividend increasers, you can check out both lists for free at The lists can be downloaded, updated, and sorted.

Disclosure: Author did not own any of the above at the time the article was written.


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