Key Points

• Buffett's Berkshire Hathaway portfolio includes only one ultra-high-yield stock.

• However, his "secret portfolio" is loaded with ultra-high-yielders.

• The best of the bunch has increased its dividend for 30 consecutive years and has solid growth prospects.

Warren Buffett is known as a value investor, not as an income investor. However, that doesn't mean the "Oracle of Omaha" doesn't own stocks that many income investors would find highly attractive.

You might be surprised that Buffett even has positions in nine ultra-high-yield dividend stocks. By the way, the threshold used for a dividend yield to qualify as "ultra-high" is four times the yield of the SPDR S&P 500 ETF. Here are all of Buffett's ultra-high-yield dividend stocks, along with which one is the best of the bunch.

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Berkshire Hathaway's sole ultra-high-yielder

Buffett's Berkshire Hathaway portfolio features only one ultra-high-yield dividend stock: Kraft Heinz (NASDAQ: KHC). The food and beverage company pays a forward dividend yield of 6%.

Kraft Heinz's dividend yield isn't so high because the company has increased its dividend payout. Instead, it's the result of a steadily deteriorating share price over the last few years, combined with maintaining the dividend at the same level during the period.

Berkshire does have stakes in a couple of other stocks with yields that aren't too far away from meeting the ultra-high threshold. Oil and gas giant Chevron offers a forward dividend yield of 4.61%. Satellite radio and podcast provider Sirius XM Holding's yield is 4.45%. However, the stocks didn't quite make the cut for our list.

Buffett's "secret portfolio"

Where can Buffett's other seven ultra-high-yield dividend stocks be found? In his "secret portfolio." I'm referring to the stocks owned by New England Asset Management (NEAM).

Berkshire Hathaway acquired General Re in 1998, which had acquired NEAM three years earlier. While NEAM reports its stock holdings to the U.S. Securities and Exchange Commission separately from Berkshire, Buffett owns all of the stocks in its portfolio just as much as he does any stock listed in Berkshire's SEC filings.

NEAM's two highest-yielding stocks are both business development companies (BDCs). Globus Capital BDC (NASDAQ: GBDC) pays an especially juicy forward dividend yield of 11.17%. It's followed by Ares Capital, the largest publicly traded BDC, with a yield of 8.57%.

A couple of big pharma stocks in Buffett's secret portfolio pay great dividends. Pfizer's (NYSE: PFE) forward dividend yield is 6.78%, while Bristol Myers Squibb (NYSE: BMY) offers a forward yield of 5.29%.

There's one ultra-high-yield overlap between Berkshire's and NEAM's portfolios -- Kraft Heinz. NEAM also owns another food company with an exceptionally high dividend payout. Campbell's (NASDAQ: CPB), which is best known for its soups, pays a forward dividend yield of 4.99%.

Two real estate investment trusts (REITs) are also in the mix. Realty Income's (NYSE: O) forward dividend yield is 5.6%. Lamar Advertising's (NASDAQ: LAMR) yield is 4.99%.

Finally, Buffett owns a stake in telecommunications giant Verizon Communications (NYSE: VZ) via NEAM's portfolio. Verizon's forward dividend yield is a lofty 6.22%.

The best of the bunch

How can we determine which of these ultra-high-yield dividend stocks owned by Buffett is the best of the bunch? We should obviously consider the dividend yield. In addition, the ability of the company to continue paying (and preferably increasing) its dividend is important. Growth prospects and valuation should be included, too. Based on these criteria, I think three of the nine stocks stand out above the rest.

Ares Capital's sky-high yield is a big plus. The BDC has either maintained or grown its dividend for 63 consecutive quarters (almost 16 years). It's the leader in the fast-growing private capital market. Ares Capital has also trounced the S&P 500 since its initial public offering in 2004.

Verizon is a longtime favorite for income investors. Its juicy dividend appears to be safe with the company's growing free cash flow. Verizon has also increased its dividend for 18 consecutive years. The biggest knock against the telecom provider is that its revenue and earnings growth haven't been spectacular. However, Verizon could enjoy stronger growth going forward once its acquisition of Frontier Communications closes.

The best stock overall of the group, in my opinion, is Realty Income. Its dividend yield is very attractive. Even better, the REIT pays its dividend monthly and has increased its dividend for an impressive 30 consecutive years.

Realty Income has delivered a positive total operational return every year since its IPO in 1994. Its diversified real estate portfolio, with nearly 1,600 clients representing 91 industries, helps make the company's cash flow stable. The REIT also has strong growth prospects, particularly in Europe, where it faces minimal competition.

The main drawback with this stock is its valuation. Realty Income's shares trade at 43 times forward earnings. However, I think the company's sterling track record justifies a premium price tag.

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Keith Speights has positions in Ares Capital, Berkshire Hathaway, Bristol Myers Squibb, Chevron, Pfizer, Realty Income, and Verizon Communications. The Motley Fool has positions in and recommends Berkshire Hathaway, Bristol Myers Squibb, Chevron, Pfizer, and Realty Income. The Motley Fool recommends Campbell's, Kraft Heinz, and Verizon Communications. The Motley Fool has a disclosure policy.

The stock market recently took a big dip, driven down by concerns about how much tariffs will affect the economy. One of the benefits of falling stock prices is that dividend yields move in the opposite direction. That allows investors to lock in even higher yields on some high-quality dividend stocks.

I recently capitalized on the dip in the market to deploy some cash in my retirement account to add to my position in several top-notch dividend stocks, including VICI Properties (NYSE: VICI), Verizon (NYSE: VZ), and Genuine Parts Company (NYSE: GPC). Here's why I think they are low-risk stocks to buy amid the current market turmoil.

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A low-risk wager on a steadily growing income stream

Amid the market downturn, VICI Properties' stock has dipped more than 10% from its recent peak. That has driven up the dividend yield of the real estate investment trust (REIT) to 5.7%, well above the S&P 500's 1.5% yield.

The REIT's high-yielding payout is on a very safe footing. It produces very stable cash flow from its portfolio of high-quality experiential real estate, like casinos and sports and entertainment complexes.

It leases these properties to operating tenants under very long-term triple net leases (NNNs), which currently have an average remaining term of 41 years. An increasing percentage of its leases index rents to inflation (42% this year, rising to 90% by 2035). Because of that, it generates very stable and growing rental income.

VICI Properties has a very strong financial profile that gives it the flexibility to continue investing in income-producing experiential real estate. Its growing portfolio enables the REIT to increase its dividend. It has raised it for seven straight years (every year since its formation), at a 7% compound annual rate, well above the 2% average annual rate of its net lease peers.

A cash flow machine

Verizon's shares have slumped more than 7% from their recent peak. That has pushed the telecom giant's dividend yield up to 6.3%. That high-yielding dividend is super safe.

Verizon produces lots of durable cash flow as businesses and consumers pay their wireless and broadband bills. The company earned $36.9 billion in cash flow from operations last year and $19.8 billion in free cash flow (FCF) after funding capital expenditures, which was more than enough to cover its dividend outlay of $11.2 billion. Verizon used the remaining excess FCF to strengthen its already rock-solid balance sheet.

The company is using some of its financial flexibility to acquire Frontier Communications in a $20 billion all-cash deal to bolster its broadband network. That deal and the continued capital investments to organically grow its fiber and 5G networks put Verizon in position to grow its revenue and cash flow in the future.

That should enable the company to continue increasing its dividend, which it has done for a sector-leading 18 years in a row.

Decades of dividend growth prove its resiliency

Genuine Parts Company has sold off sharply during the recent market downdraft, falling over 30%. That slump pushed the automotive and industrial parts distributor's dividend yield up to 3.7%.

There are some concerns that tariffs could have a meaningful impact on the automotive sector, given the volume of parts imported into the country. While this headwind could affect Genuine Parts' business, it has weathered adverse conditions before, demonstrating its resilience by increasing its dividend for 69 years in a row.

The company has a strong financial profile to support its high-yielding dividend amid the current market uncertainty. Last year, Genuine Parts produced $1.3 billion in cash flow from operations and $684 million in FCF. That was more than enough to cover the $555 million it paid in dividends.

It has a strong balance sheet with lots of liquidity ($2 billion, including $480 million of cash and equivalents). That gives it a lot of financial flexibility to continue investing in growing its business and making acquisitions, including buying independent NAPA Auto Parts stores in the top markets.

These investments should help grow its revenue and cash flow over the long term, supporting the continued rise in its dividend.

High-quality, high-yielding dividend stocks

Shares of VICI Properties, Verizon, and Genuine Parts Company have dipped during the recent stock market sell-off, which has pushed their dividend yields even higher. Given the durability of their cash flows and the strength of their financial profiles, those payouts are very safe. That's why I've capitalized on the recent sell-off to buy even more shares for my retirement account to increase the amount of their super-safe income that I will collect in the years to come.

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Matt DiLallo has positions in Genuine Parts, Verizon Communications, and Vici Properties. The Motley Fool recommends Genuine Parts, Verizon Communications, and Vici Properties. The Motley Fool has a disclosure policy.