Imagine if you had invested the same way as Warren Buffett has through the years. Even if you started out with a lot less money than he did, you'd be quite wealthy today.
But what if you're mainly seeking income now? Could the Oracle of Omaha provide some help on that front? Maybe so.
Buffett owns five dividend stocks with yields of 4.9% or more. Should you own them too?
1. Ares Capital
You won't find Ares Capital (ARCC 0.10%) listed in any of Berkshire Hathaway's (BRK.A 0.83%) (BRK.B 0.44%) regulatory filings disclosing its holdings. However, Buffett does own shares of the stock via Berkshire's subsidiary, New England Asset Management (NEAM).
Ares Capital offers a dividend yield of over 10.3%. That yield is so high in large part because Ares is a business development company (BDC). BDCs provide financing to small-to-medium-sized businesses. Importantly, they must return at least 90% of their income to shareholders in the form of dividends to be exempt from federal taxes.
I think that income investors will find a lot to like about Ares Capital. Its dividend appears to be sustainable. The company's growth prospects also look promising with businesses turning to BDCs as access to credit has tightened.
2. Crown Castle
Buffett also has a position in Crown Castle (CCI -0.82%) through Berkshire's NEAM subsidiary. Crown Castle's dividend yield currently tops 5.4%.
Crown Castle is a real estate investment trust (REIT) that operates telecom towers and small cells used to boost capacity in areas with especially high data traffic. Mobile data usage should continue to grow for years to come, making the company's telecom assets a must-have.
Some investors could worry about Crown Castle's valuation with its shares trading at 29.6 times forward earnings. However, that's actually cheaper than the stock has typically been in the past. I think Crown Castle remains a solid pick for long-term income investors.
3. Golub Capital BDC
Ares Capital isn't the only BDC that Buffett owns. Again, thanks to NEAM's portfolio, he has a stake in another BDC -- Golub Capital BDC (GBDC -0.30%).
Golub's dividend yield stands above 9.7%. Can the company continue to pay such an attractive dividend? Probably. Although its dividend payout ratio is a whopping 200%, that's due to Golub's unrealized losses that should be reversed down the road.
My view is that Golub Capital isn't such an attractive choice for income investors, though. The main problem is that the stock has badly underperformed the broader market over the last decade. I'm not convinced that Golub will beat the market going forward, either.
4. Viatris
Buffett sold off most of the pharma stocks that used to be in Berkshire's portfolio. However, he still owns shares of Viatris (VTRS 0.71%) because of NEAM's stake in the generic drug maker.
Viatris offers a dividend yield of 4.9%. The company should be able to keep the dividends flowing and growing. It also expects to continue buying back shares.
I don't think that Viatris is a great stock. However, if you're mainly looking for income, it's worthy of consideration. As a result of its steep decline in recent years, the stock trades at a super-low forward price-to-earnings ratio of 3.4. I expect that low valuation gives Viatris a floor that will keep it from falling too much further.
5. Vitesse Energy
Does Buffett own any high-yield dividend stocks that are actually in Berkshire's portfolio? Yep. Berkshire initiated a new position in Vitesse Energy (VTS -0.59%) in the first quarter of 2023.
Vitesse's dividend yield tops 8%. The company, which owns non-operating interests in oil and natural gas wells, generates plenty of cash flow to continue paying its dividend at least at current levels.
Even better, Vitesse stock has been a big winner so far this year with shares skyrocketing more than 40%. I don't anticipate that kind of performance going forward. However, with the possibility that oil prices tick higher, Vitesse appears to be a high-yield Buffett stock that other investors might like too.