Warren Buffett Owns These 2 Ultra-High-Yield Dividend Stocks. Here's Why They're Great Picks for Income Investors Right Now.

Berkshire Hathaway's Ultra-High-Yield Dividend Stocks - Berkshire Hathaway's portfolio includes stocks with long histories of paying attractive dividends, with all top 12 holdings paying dividends [1] - Warren Buffett owns two ultra-high-yield dividend stocks through Berkshire's subsidiary, New England Asset Management (NEAM), which manages a separate portfolio [2] - NEAM's portfolio includes Ares Capital and Verizon Communications, both of which are ultra-high-yield dividend stocks [3] Ares Capital and Verizon as Income Investments - Ares Capital has a forward dividend yield of 8.9%, while Verizon's forward dividend yield is over 6.4% [4] - Ares Capital has maintained steady-to-growing dividends for 15 years, with the highest regular dividend per share growth among large BDCs over the last 10 years [4] - Verizon has increased its dividend payout for 17 consecutive years, the longest streak in the U.S. telecommunications industry [4] Business Strengths of Ares Capital and Verizon - Ares Capital is the largest player in the U.S. direct lending market, with a highly selective deal closing rate of around 5% [4] - Verizon is a leader in providing wireless and broadband services for businesses and consumers [4] Valuation of Ares Capital and Verizon - Ares Capital's forward price-to-earnings ratio is below 9.2, compared to 15.5 for the S&P 500 financial sector [5] - Verizon's shares trade at a little over 9 times forward earnings, compared to over 19.2 for the S&P 500 communication services sector [5] Risks for Ares Capital and Verizon - Ares Capital faces the risk of loan defaults, which could increase during a major U.S. economic downturn [6] - Verizon operates in a highly competitive telecom market and must invest heavily in new technologies like 5G networks [7]