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10 Best Warren Buffett Stocks To Invest In
Best Growth Stock
Symbol
AMZN
No. of shares owned
10,000,000
Value of shares owned
$1.5 billion
Market cap
$1.85 trillion
Why we chose it
Amazon is still growing its online marketplace and has a vibrant cloud computing segment. The tech giant has exposure to many high-growth industries and has experienced a resurgence in profitability.
Pros
- Net income grew substantially year-over-year
- Dominant positions in multiple industries
- Recently joined the Dow
Cons
- Rising competition in the e-commerce industry
- Shares have rallied over the past year, resulting in a higher valuation
- Antitrust concerns
Best Finance Stock
Symbol
V
No. of shares owned
8,297,460
Value of shares owned
$2.2 billion
Market cap
$563 billion
Why we chose it
Visa has a reliable business model that produces profit margins above 50%. Debit and credit card transactions won’t go away anytime soon, and Visa will continue to generate profits for investors.
Pros
- High profit margins
- Reliable business model
- Impressive dividend growth rate
Cons
- Competition from large credit card firms
- Higher valuation
- Stock gains outpaced year-over-year net income growth last year
Best Dividend Stock
Symbol
CVX
No. of shares owned
126,093,326
Value of shares owned
$18.8 billion
Market cap
$277 billion
Why we chose it
Chevron operates in a vital sector of the global economy and has a long history of paying dividends. A strong balance sheet and investment strategy focused on growth opportunities can help the company continue to deliver dividend growth.
Pros
- High dividend yield
- A reliable business model in a vital industry
- Low P/E ratio
Cons
- Volatility in oil prices significantly impacts the company’s revenue and earnings
- Competition from other oil giants
- Shares have underperformed the stock market
Best Bank Stock
Symbol
BAC
No. of shares owned
1,032,852,006
Value of shares owned
$34.8 billion
Market cap
$277 billion
Why we chose it
The financial institution has over 6,000 branches throughout the United States and has established itself as a leader in the industry. The bank stands to gain market share if any regional banks collapse since most consumers will put their money into established firms that are “Too Big to Fail.”
Pros
- The financial firm is a leading bank
- A vast presence that includes over 6,000 branches
- Regional bank struggles can result in more deposits for Bank of America
Cons
- Competition from other financial institutions
- Shares have underperformed the stock market for several years
- Low or declining financial growth is common
Best Retailer Stock
Symbol
KR
No. of shares owned
50,000,000
Value of shares owned
$2.3 billion
Market cap
$36 billion
Why we chose it
Kroger is a leading supermarket corporation that offers essential products. The company gets many returning customers and has a respectable dividend yield.
Pros
- The company sells food and other essentials which means there is always demand
- The dividend yield is above 2%
- Over 2,700 Kroger stores give the company a large market share
Cons
- Revenue and earnings growth are low
- Competition from other supermarkets
- The FTC is trying to block a merger between Kroger and Albertsons
Best Consumer Staples Stock
Symbol
MCO
No. of shares owned
24,669,778
Value of shares owned
$9.6 billion
Market cap
$70 billion
Why we chose it
Moody’s has exhibited strong financial growth as many corporations turn to the risk assessment firm. The company’s artificial intelligence resources can lead to more revenue growth and higher retention rates for current clients.
Pros
- Strong financial growth and high profit margins
- The firm is harnessing generative AI to tap into more growth opportunities
- MCO has outperformed the S&P 500 over the past five years
Cons
- Competition from other risk assessment agencies
- Low dividend yield
- Cyclical business
Best Tech Stock
Symbol
AAPL
No. of shares owned
905,560,000
Value of shares owned
$174.3 billion
Market cap
$2.70 trillion
Why we chose it
Apple is the largest Warren Buffett stock, so it deserves a closer look. While the company hasn’t been as innovative in recent years, new initiatives can change the trend. Apple has prestige attached to its brand and can quickly rally if it capitalizes on innovative technology.
Pros
- Brand prestige and loyalty
- Generative AI and the new Vision Pro can reignite growth
- The company abandoned its EV endeavor, which will free up capital and resources
Cons
- Growth rates have slowed down significantly
- The company’s 5-year stock gains significantly exceed revenue and net income growth during the same timeframe.
- A few recent quarters featured declining year-over-year revenue growth
Best Consumer Staples Stock
Symbol
KO
No. of shares owned
400,000,000
Value of shares owned
$23,572,000,000
Market cap
$258 billion
Why we chose it
The soft drink leader produces many beverages that people regularly enjoy. Coca-Cola has its iconic drink and many smaller brands under its corporate umbrella.
Pros
- Iconic drink that has multiple generations of customers
- Vast market share in the soft drink industry
- High dividend yield
Cons
- Competition from other beverage companies
- A shift to the health-conscious consumer can add pressure to long-term growth rates
- Low revenue growth
Best Media Stock
Symbol
PARA
No. of shares owned
63,322,491
Value of shares owned
$936.5 million
Market cap
$7 billion
Why we chose it
The company has over a century of films and movie material. It’s an iconic corporation that is expected to achieve profitability with its streaming platform by the end of 2025.
Pros
- Vast amount of movies and iconic storylines from over a century
- Paramount+ is expected to be profitable by the end of 2025, which can expand profit margins
- Takeover interest is growing
Cons
- The streaming business is currently operating at a high net loss
- The stock has significantly underperformed the stock market
- Revenue growth has been in the low-single-digits or slightly negative year-over-year
Best Dividend Growth Stock
Symbol
AXP
No. of shares owned
151,610,700
Value of shares owned
$28.4 billion
Market cap
$158 billion
Why we chose it
The finance firm has a lower valuation than its peers and is achieving noteworthy top and bottom-line growth. American Express regularly hikes its dividend by at least 10% per year.
Pros
- Lower valuation than most of its competitors
- Impressive financial growth
- Dividend growth often exceeds 10% per year
Cons
- Competition from other firms that offer credit and debit cards
- If consumer spending goes down, the company’s growth rates will decrease
- Lower profit margins than its competitors
Who Is Warren Buffett?
Warren Buffett is a well-known investor who has outperformed the stock market for many years. The “Oracle of Omaha” takes a prudent approach with his investments and looks for value stocks with good margins of safety.
The legendary investor has been buying some of the best stocks for over 80 years. His vast returns and experience have made him a popular resource for investing strategies and insights. Buffett has shared many investing best practices, such as never investing in a business that you do not understand.
Buffett doesn’t only have his stock portfolio. The business magnate runs Berkshire Hathaway, which owns several brands like Geico, Dairy Queen and Fruit of the Loom. He doesn’t rush to spend money and often has billions of dollars on the sidelines as he waits for a good opportunity.
Why Would You Want to Invest in Warren Buffett Stocks?
The top Warren Buffett stocks offer more stability than most stocks. Some of the stocks in his portfolio still outperform the stock market. But the investor prioritizes having a good margin of safety. That’s why you won’t see many growth stocks in his portfolio that have become modern favorites.
These are some of the reasons you may want to invest in Warren Buffett stocks:
- The margin of safety: Buffett embraces Benjamin Graham’s value investing approach. He looks for stocks with good margins of safety rather than pursuing risky investments.
- Dividends: Many of Warren Buffett’s top stocks pay quarterly dividends. As a result, you can enjoy cash flow while waiting for your positions to gain value.
- The potential to outperform the market: Warren Buffett has a history of outperforming the stock market over many years. Some of the stocks in his current portfolio can still achieve higher returns than index funds.
- Recognized corporations: Most Warren Buffett stocks are household names. Many people know these companies, and it’s unlikely that they go out of business anytime soon.
- Buffett’s pile of cash: The investor always sits on billions of dollars of cash at any given time. He’s waiting for an opportunity to arrive. But even then, he still has stocks in his portfolio. The large cash position demonstrates his calculated approach, which is a good sign for the stocks that are still in his portfolio.
How to Choose the Best Warren Buffett Stocks to Invest in for You
Investors can choose from several Warren Buffett stocks. These are some of the factors to consider when choosing the best stocks.
- Valuation
- Financial Growth
- Dividend Yield
- Dividend Growth Rate
- Catalysts
Valuation
Value investors look at a company’s fundamentals to determine the margin of safety. While investors can choose from many metrics, value investors like Warren Buffett often place a strong emphasis on the price-to-earnings (P/E) ratio. This ratio rewards companies with high profits that haven’t overextended their rallies.
Investors must compare a stock’s P/E ratio with competitors in the industry to assess if the valuation is reasonable or not. Reviewing historical P/E ratios to see if the stock market isn’t overvalued is important. Investors who follow Warren Buffett’s investment approach tend to ignore growth stocks with high revenue growth and significant net losses.
Financial Growth
Investors should check a company’s year-over-year revenue and net income growth to assess the company’s current health. High growth in these areas suggests the corporation is gaining market share and can be a good stock. A corporation can also become a bad stock if decelerating financial growth becomes a trend. But you can’t make decisions based on financial growth alone, as some high-flying corporations have excessive valuations.
Dividend Yield
A stock’s yield isn’t the make-or-break component of an investment thesis. Some high-yield stocks end up being traps that result in lost value. Other high-yield stocks combine steady dividend payments with capital appreciation. Many of the top Warren Buffett stocks pay regular cash distributions to their investors. A higher yield means you will receive more passive income every quarter that you can reinvest into additional shares.
Dividend Growth Rate
Corporations that pay dividends often raise them every year. A higher dividend indicates more confidence and isn’t something that a company can fake. A firm can only raise its dividend if net income is increasing or if the company has a low enough dividend payout ratio. Struggling companies end up cutting their dividends.
While mature companies tend to hike their dividends by less than 5% per year, some of Buffett’s top picks raise their dividends by more than 10% per year. A higher dividend hike indicates leadership has confidence in the company’s future and wants to reward long-term investors.
Catalysts
Warren Buffett always considers what a company will become within the next 10 years before buying a stock. He looks for catalysts and opportunities that can translate into more gains for long-term investors. Before you buy a Warren Buffet stock, read some of the company’s recent earnings reports and recent news to assess which opportunities it’s pursuing.
Alternatives to Warren Buffett Stocks
Warren Buffett isn’t the only investor who has generated a lot of attention. Some investors have outperformed the Oracle of Omaha over long stretches, but not everyone can maintain their leads forever. These are some alternatives to consider which can sharpen your perspective.
Warren Bufffett vs. Cathie Wood
Cathie Wood outperformed Warren Buffett for several years before the ARK Fund crashed in 2021. While Warren Buffett prioritizes value stocks, Cathie Wood accumulates innovative growth stocks even if the companies are extremely unprofitable. She believes the financials will get better over time while Buffett goes for more stability. Warren Buffett will miss out on rallies from stocks like Nvidia and Tesla, but he also won’t be holding the bag if these same stocks crash.
Warren Buffett vs. Peter Lynch
While Buffett looks at valuations and looks for stocks with good margins of safety, Peter Lynch wants to know a corporation’s story. He wants to know where the company is heading and what growth initiatives are important for the company’s future. Buffett is strictly a value investor, while Lynch incorporates elements of value and growth investing.
Warren Buffett vs. Bill Ackman
Bill Ackman will buy growth stocks that Warren Buffett wouldn’t touch. The Pershing Square fund owner buys companies with high P/E ratios but also accumulates positions in companies with lower valuations when the market beats them down. Ackman learns from investors like Buffett and also looks for value. But he also isn’t afraid to short stocks and put a lot of capital on the line. Warren Buffett isn’t the type of investor to short any security.
Warren Buffett vs. Dave Ramsey
Dave Ramsey likes to keep things simple. Get out of debt and find a good growth stock fund instead of picking stocks on your own. Buffett also prioritizes having healthy financials and avoiding leverage, but he will pick stocks. The Oracle of Omaha does believe that most people should get index funds instead of trying to beat the market.
Frequently Asked Questions
Does Warren Buffett Own Nvidia stock?
Warren Buffett didn’t own Nvidia stock at the end of 2023. He’s not the type of investor to pursue innovative trends as they happen in real time and prefers value stocks with higher margins of safety.
What Is Berkshire Hathaway’s Largest Holding?
Apple is by far Berkshire Hathaway’s largest holding. The tech giant makes up roughly half of Buffett’s entire portfolio. Warren Buffett owns over 900 million shares of Apple stock.
Why Is Berkshire Hathaway Stock So Expensive?
Under Buffett’s direction, Berkshire Hathaway has never gone through a stock split. The Oracle of Omaha discourages stock splits since those splits increase short-term trading and can result in higher volatility. For instance, you need 100 shares of a company to trade a covered call. An investor would need roughly $60 million to trade a single covered call for Berkshire Hathaway class A (BRK.A).
