Don't believe for one second that Warren Buffett doesn't think about dividends. In his latest letter to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shareholders, he mentioned that the company received $785 million in dividends from just one stock in 2021 (it was Apple).

Buffett's recent buys for Berkshire's portfolio also hints that dividends might have been on his mind. In the third quarter of 2022, he purchased eight stocks. Seven of them pay dividends. A few of them offer dividends that are quite attractive. Buffett just bought these three dividend stocks with yields of over 3%.

1. Paramount Global

Paramount Global (NASDAQ: PARA) stands out as Buffett's only high-yield purchase in the third quarter. The media company's dividend yield currently tops 5.1%. 

Buffett's history with Paramount goes back to when the company was known as Viacom. He led Berkshire to open a position in Viacom in 2012. While the legendary investor later sold all of those shares, he apparently regained an interest in the stock in the first quarter of this year and has kept on buying.

Berkshire now owns 15% of Paramount Global's outstanding class B shares. The stock hasn't been a winner for Buffett so far, though, with a year-to-date decline of close to 40%. 

What does the multibillionaire investor like about Paramount (other than its dividend)? Its valuation probably ranks high on the list. The stock trades below 12.8 times expected earnings.

2. Jefferies Financial Group

Buffett has long been a fan of bank stocks. But he's become less enamored of the financial services sector lately. That's what makes Berkshire's new position in Jefferies Financial Group (NYSE: JEF) somewhat surprising.

With a market cap of under $9 billion, Jefferies is much smaller than the other banks in Berkshire's portfolio. Unlike those other bigger corporations, Jefferies focuses only on investment banking and doesn't have a commercial banking unit. But it offers a dividend that rivals the big boys with a yield of more than 3.2%.

Jefferies' stock has also outgained Berkshire's other bank stocks so far this year. However, Buffett's investment in the company played a key role in that outperformance.

Berkshire owns only a tiny position in Jefferies, though. That could indicate that Buffett and his team began buying in the latter part of the third quarter and are continuing to scoop up shares in the fourth quarter.

3. Chevron

It wasn't surprising whatsoever that Buffett added to his position in Chevron (NYSE: CVX) in the third quarter. The oil and gas giant is Berkshire's third-largest holding, including shares owned by its New England Asset Management subsidiary. 

Chevron's dividend yield of 3.1% is lower than it's been throughout much of the past 10 years. That's not because the company has cut its dividend, though. Actually, Chevron is a Dividend Aristocrat with 35 consecutive years of dividend increases.

Instead, the company's dividend yield is lower because its stock price has risen so much. Chevron stock has soared nearly 60% year to date. That follows a 39% gain in 2021.

Buffett seems to still think Chevron is attractively valued. Its shares trade at 11.2 times expected earnings. There's a good chance that this stock -- and its dividend -- go even higher. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Warren Buffett just bought these 3 dividend stocks with yields of over 3% appeared first on The Motley Fool Australia.

Warren Buffett is one of the greatest investors of our time and his company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), regularly beats the S&P 500, a broader benchmark for the market, on annual performance. One of the ways Buffett and Berkshire are able to do so is through Berkshire's massive $345 billion equities portfolio, from which Buffett and the rest of his team purchase and sell select stocks.

Buffett has long been known as a value investor. He tries to find stocks that are trading below their intrinsic value and that the market missed or simply ignored. Over time, value investors believe these stocks will appreciate nicely as the market wakes up and takes notice.

Considering how successful Buffett has been with this strategy, let's look at five value stocks the Oracle of Omaha currently owns and see if they have helped his business succeed.

1. HP

Known as the original start-up out of Silicon Valley, HP (NYSE: HPE) has been making computers and printers for decades. While the company may not be seen as the innovator it once was, HP has become a stock that traditional investors have warmed up to for the basic reason that it prints plenty of cash profits and uses that to pay shareholders.

For fiscal 2022, HP is projecting free cash flow of between $3.2 billion and $3.7 billion. The company is also on track to return more than $5 billion to shareholders through dividends and share repurchases in the current fiscal year. With an annual dividend yield of close to 3.4%, HP stock trades at just over five times earnings.

2. Citigroup

After investing in nearly every other large US bank over the past few decades, Buffett and Berkshire purchased a nearly 3% stake in the embattled bank Citigroup (NYSE: C) earlier this year. Citigroup is an obvious value play, with its stock trading at just 60% of its tangible book value, or net worth. Shareholders are right to question the stock at the moment after the company has been dealing with regulatory issues regarding its risk management and internal controls, and after years of lagging returns.

But now, CEO Jane Fraser, who took over Citigroup in early 2021, commenced a big transformation plan which includes selling off most of the bank's international consumer banking operations. This will make the bank simpler and focus on higher-performing businesses. Citigroup still has a lot of work to do, but if management can clean up the regulatory issues and create a more focused operation, getting back to full tangible book value should be quite doable. While Buffett waits, Citigroup is paying an annual dividend yield in excess of 4%.

3. Kraft Heinz

The multinational food and beverage company Kraft Heinz (NASDAQ: KHC) is often referred to as Buffett's biggest mistake. Berkshire teamed up with 3G Capital in 2013 to purchase Heinz for $23 billion. They would eventually merge the company with Kraft in 2015, at which time shares opened around $71.

Today, shares sit at $38, so Berkshire has lost a good deal of money on the investment. Still, Berkshire continues to own more than 26% of the company. Kraft Heinz still has nearly $19.3 billion of long-term debt, but management made some serious progress in reducing that debt, grew free cash flow in recent years, and it also pays more than a 3% dividend yield.

4. Ally Financial

The large digital consumer bank Ally Financial (NYSE: ALLY), which specializes in auto lending, is another bank Buffett is purchasing stock in while its below tangible book value, and which pays an extremely healthy dividend yield of roughly 4.6%. Ally took off during 2020 and 2021, as the chip shortage and lack of auto inventory led to high car prices and huge demand, particularly among vehicles, enabling Ally to strongly grow its retail auto loan book.

But investors are now concerned about loan losses as consumer finances get drained and as many expect a recession next year. Ally is still originating auto loans -- and at very high yields -- and management seems to be taking a conservative approach to credit. If loan losses don't exceed management's built-in expectations, then I'd suspect Berkshire has a winner here.

5. Jefferies Financial

Berkshire recently unveiled its small purchase of shares in investment bank Jefferies Financial (NYSE: JEF) during the third quarter. Similar to Citigroup and Ally, Jefferies also has an attractive valuation, trading just over tangible book value. The bank also pays out more than a 3% dividend yield.

The broader investment banking sector struggled this year, as equity and debt underwriting significantly slowed down in the face of falling equity valuations and market volatility. But Jefferies is reportedly gaining market share and Berkshire and Jefferies own a mortgage business together, so Berkshire likely got to know management pretty well.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Warren Buffett owns these 5 value stocks appeared first on The Motley Fool Australia.