For those of you who like to piggy-back: from Gurufocus.com

Disclaimer: my family owns USB and GSK.

High Dividend Yield Stocks in Warren Buffett Portfolio: Gannet Co. Inc., Bank of America Corp., SunTrust Banks, GlaxoSmithKline, and U.S. Bancorp

August-10-2008

At this time of uncertainty, above average stock dividends may give investors some comfort. However, the risk of owning high dividend yield stocks is that the dividends may be cut. Buying the high dividend stocks Warren Buffett owns may be a safer way to go.

Here are some high yield stocks that have been recently owned by Warren Buffett and other gurus.

Gannet Co. Inc. (GCI)

Gannet Co. Inc. (“GCI”) operates as a news and information company in the United States and the United Kingdom . It operates in two segments, newspaper publishing and broadcasting and has a newly developed digital strategy segment that was started after several business acquisitions. GCI has a market cap of $4.12 billion; its shares were traded at around $18.02 with a P/E ratio of 4.60 and P/S ratio of 0.58. The dividend yield of Gannett Co. Inc. stocks sits at 9.18 percent.

In recent headlines, Gannet Co. Inc. has experienced a 36 percent net loss of income for the second quarter. A subsidiary of Gannet, The Cincinnati Enquirer, has also begun offering optional severance packages to its employees in light of declining economic conditions that have sapped its ad revenues. Total revenue for Gannet Co. Inc. has dropped 10 percent, with publishing advertising suffering the most.

Warren Buffet has owned over 3 million shares of GCI since before the second quarter of 2000 at a share price of $59.81 and witnessed its decline after a peak at $89.16 in 2003 to its recent all-time low of $29.05. This recent decline reflects the sentiment held by Warren Buffet that the era of newspapers has passed and that traditional news mediums are being interrupted by the internet.

Other gurus also have shares in GCI. As of the first quarter of 2008, John Rogers increased his shares in CGI 62 percent from the previous quarter while David Dreman decreased his shares 51.37 percent over the same period. Charles Brandes, Brian Rogers, NWQ Managers, Arnold Van Berg and Warren Buffet maintained their shares in the company despite the drop in share price. Guru Jean-Marie Eveillard, however, sold out his shares in the first quarter of 2008.

Director of GCI, Arthur H Harper, bought shares of stock recently, near the end of the second quarter of 2008 and Senior Vice President and Chief Digital Officer Christopher D Saridakis also bought shares at the end of April 2008. The price per share has fallen an average 24.69 percent since April.

Bank of America Corp. (BAC)

Bank of America (“BAC”) is one of the world’s leading financial services and banking companies. It serves individual small businesses, commercial, corporate and institutional clients across the U.S. and around the world. Bank of America Corp. has a market cap of $148.42 billion; its shares were traded at around $33.33 with a P/E ratio of 18.35 and P/S ratio of 3.01. The dividend yield of Bank of America Corp. stocks is at 8.65 percent.

After picking up Countrywide, and enduring several volatile quarters, Bank of America has become the nation’s largest home lender. However, Bank of America has yet to record a quarterly loss through the current credit crunch. The secret to success? Bank of America has diverse business segments, including a sizeable credit card division and a flourishing wealth management division.

Warren Buffet has owned BAC stock since before the second quarter of 2007 and has witnessed the stock decline in value from $48.89 per share to $37.91 per share by the end of the first quarter of 2008. Along with Richard Pzena, David Dreman, Chris Davis, Kenneth Fisher, Dodge & Cox, NWQ Manager, Ruane Cunniff, and Tweedy Browne, Warren Buffet has maintained his shares in the company. His holdings currently stand at 9,100,000 shares.

On the other hand, Brian Rogers, Hotchkis & Wiley, and Richard Snow increased positions in the first quarter of 2008 in BAC by 200 percent, 27.82 percent and 19.18 percent respectively from the previous quarter while Irving Kahn reduced his position 30.66 percent from the last quarter in 2007.

Several Directors in the company bought shares recently as well, Jackie M Ward, Thomas M Ryan, and William Iii Barnet each bought shares in the last several months.

SunTrust Banks (STI)

SunTrust Banks (“STI”) is a commercial banking institution that provides a wide range of services to accommodate the financial needs of its clients. Its primary businesses include deposit and credit services as well as trust and investment services. STI has a market cap of $14.85 billion; its shares were traded at around $42.01 with a P/E ratio of 11.87 and P/S ratio of 2.13. The dividend yield of SunTrust Banks Inc. stocks is high at 8.04 percent.

As reported by Triangle Business Journal, SunTrust Banks recently acquired First Priority Bank for $214 million and the assets for $42 million. SunTrust is the third largest bank in the Bradenton , Florida area where Priority was based.

Warren Buffet has owned shares of STI since before the second quarter of 2000 and seen the price per share fluctuate from $45.69 to a peak of $85.74 back down to the first quarter price of $55.14, reporting an overall price increase of 18.49 percent. Although Warren Buffet began with 6.6 million shares of STI, he now owns 3.2 million shares after making sales after the second quarter of 2001 and again after the second quarter of 2004.

All the gurus who own the stock have maintained their number of shares, including David Dreman, Brian Rogers, Chris Davis, Kenneth Fisher, Dodge & Cox and Ruane Cuniff. However, recently, in April, STI’s CFO, Mark A Chancy bought 3,000 shares of stock in his company at $52.56 a share and the price has decreased 20.07 percent since. Directors David H Hughes, G Gilmer Iii Minor, and Alston D Correll all also recently bought 10,000, 4,000 and 75,000 shares of stock, respectively, in July.

GlaxoSmithKline (GSK)

GlaxoSmithKline (“GSK”) is one of the world's leading research-based pharmaceutical and healthcare companies and is committed to improving the quality of human life by enabling people to lead a fulfilled and active life. They also have leadership in four major therapeutic areas: anti-infectives, central nervous system (“CNS”), respiratory, and gastro-intestinal/metabolic therapy. GSK has a market cap of $119.49 billion; its shares were traded at around $46.34 with a P/E ratio of 12.80 and P/S ratio of 2.64. The dividend yield of GSK stocks is higher than average at 4.62 percent.

Boston Business Journal recently reported a $15 million milestone payment from GlaxoSmithKline to Tolerex Inc. in order to support a clinical trial for diabetes treatment. However, GSK also recently declined a lung cancer developmental treatment with collaborative partner Exelixis. Currently, GSK stocks have experienced rising fluctuating prices.

Warren Buffet has owned 1.5 million shares of GSK since about the fourth quarter of 2007 and seen a price decline of 15.79 percent from $50.39 to $42.43 in the first quarter of 2008. Two other gurus also initiated positions in GSK, Bill Nyguen and Bruce Berkowitz bought 2 million and 2.3 million shares respectively during the first quarter of 2008. Other gurus maintained their shares in GSK, such as Dodge & Cox, Richard Snow, Sarah Ketterer, Edward Owens, NWQ Managers, Kenneth Fisher, John Keeley, Charles Brandes, and Tweedy Browne.

U.S. Bancorp (USB)

U.S. Bancorp (“USB”) is a financial services holding company. They operate full-service branch offices and ATMs and provide a comprehensive line of banking, insurance, and investment services to consumers, businesses, and institutions. USB is also the parent company of Firstar Bank and U.S. Bank. U.S. Bancorp has a market cap of $53.05 billion and its shares were traded at around $30.47 with a P/E ratio of 13.28 and P/S ratio of 4.06. The dividend yield of USB stocks is higher than average at 5.52 percent.

Recently U.S. Bancorp has had many insider buys which indicates a healthier, rebounding market. It has held up in light of the credit crises however, according to Morningstar, it was changing hands at single-digit multiples of below-trend earnings as investors fled the sector, before the big bounce in financials a few weeks ago.

Warren Buffet has owned shares of USB since before the second quarter of 2001 and seen the price per share rise from $22.79 to its current end of first quarter price of $32.26. He has also increased his holdings from 6.2 million to 68.6 million in that time. Dodge & Cox just initiated shares in USB in the first quarter, while George Soros increased his shares 30.29 percent and Ruane Cunniff increased his shares 17.42 percent, both from the last quarter of 2007.

On the other hand, Bill Nygren and Ronald Muhlenkamp both decreased their shares by 23.19 percent and 53.93 respectively while David Dreman, Wallace Weitz, Tweedy Browne, Kenneth Fisher, Brian Rogers, and Jean-Marie Eveillard all maintained their shares in the company.

Chairman, President, and CEO Richard K Davis just sold 173,673 shares of USB stock in July, and the price has increased 6.13 percent since. Vice Chairman, Andrew Cecere sold 50,000 shares of stock in mid April at the price of $33.10 and the price has declined 7.95 percent since then. Finally, Directors Jerry W Levin , David B Omaley , Arthur D Jr Collins , Joel W Johnson , Craig D Schnuck , and Douglas M Jr Baker all recently bought shares of USB, while Directors Terrance R Dolan , Joseph C Hoesley , P.w. Parker , and Diane L Thormodsgard all recently sold their shares.