There's no question that Warren Buffett's track record puts him among the world's best investors. And that alone makes keeping tabs on the so-called Oracle of Omaha worth at least a little bit of your time. It's not that you should mimic his every move, but understanding how Buffett thinks can be a powerful tool in shaping how you think.

On that score, healthcare names Johnson & Johnson (NYSE:JNJ) and Teva Pharmaceutical (NYSE:TEVA) are worth deep dives today. However, you might also want to look at onetime Berkshire Hathaway holding ExxonMobil (NYSE:XOM), too, since the fortunes of the oil giant are starting to turn for the better. Here's a deeper look by three Motley Fool contributors.

A solid stock even if you don't invest like Buffett

Brian Stoffel (Johnson & Johnson): While I have great respect for the Oracle of Omaha, there is exactly zero overlap between the stocks Buffett owns via Berkshire Hathaway and my own portfolio. That said, if I were forced to choose one Buffett stock to hold, it would be Johnson & Johnson, for three key reasons.

A person tracing a stock graph on a computer screen

Image source: Getty Images.

First, the company has three divisions with very different products, all protected by different moats.

  • The consumer division provides medical basics like Band-Aids and Tylenol. Sales of these products don't go up or down by too much in any given year, and are protected by brand value. 
  • Medical devices at the company tend to focus on orthopedics and surgical devices. They are largely protected by high switching costs once hospitals install the machines and get familiar with them.
  • The pharmaceutical division, on the other hand, has big hits like Remicade, which treats arthritis. Sales tend to be hit or miss, but the division is protected by patents.

While the blend of revenue streams and moats might prevent the stock from booming in any given year, it provides a level of downside protection.

The company's dividend -- my second factor -- also provides protection. Currently yielding 2.6%, the payment only required Johnson & Johnson to use 51% of its $18.5 billion in free cash flow. This means it is both safe and has room for growth.

Finally, I think shares are reasonably priced, currently trading for less than 20 times free cash flow. Add those three together, and I think you have a solid stock for those seeking less volatility.

A classic value play

George Budwell (Teva Pharmaceutical Industries): Buffett, if nothing else, is a bargain hunter of the first order. So when his fund managers at Berkshire Hathaway started gobbling up shares of the beaten-down generic drug king Teva Pharmaceutical Industries in the fourth quarter of 2017, I was none too surprised.

Even though Teva appeared to be in real danger of going bankrupt at the time, Berkshire's brain trust saw past these headwinds to the company's bare-bones value proposition: a top pharma company trading at a steep discount relative to its long-term value proposition. I think Teva's shares still represent a compelling bargain for patient investors.

Teva is a company mired in debt following its ill-advised acquisition of Actavis' generic drug unit in 2015. Compounding matters, the company is also dealing with the patent expiration for its multiple sclerosis treatment Copaxone, as well as falling prices across the North American generic drug market. These three tailwinds have gutted Teva's share price over the past few years. In fact, the drugmaker's shares are now trading at an astoundingly low price-to-sales ratio of 0.89. 

The market's doomsday take on Teva, though, is arguably unwarranted. The company has been able to pare back its debt load to some degree through a vast restructuring effort over the last year. Newer products like the migraine medicine Ajovy and Huntington's disease treatment Austedo have also both been faring well since their respective launches. As an added bonus, Teva and partner Regeneron recently scored an important late-stage win with their experimental pain medication fasinumab. So, if things work out, Teva could have three major growth products on the market in the early part of the next decade. 

What's the bottom line? Teva's turnaround won't materialize overnight; this isn't a stock for investors looking for a quick profit. But classic value investors with a long-term mind-set like Buffett's should enjoy handsome returns on capital over the next 10 to 20 years. 

A castoff to consider now

Reuben Gregg Brewer (ExxonMobil): It was headline grabbing news when Buffett sold his stake in Exxon in 2014. That move came as oil prices were crumbling from over $100 a barrel to less than $30 before the downturn was over. Today, however, oil prices have stabilized above $50 per barrel. And the industry, Exxon included, has started to adjust to a new normal. It's time for investors to reconsider this onetime Buffett favorite.   

Why now? After several years of falling production, Exxon appears to have turned a corner. Production was up between the second and third quarters and between the third and fourth quarters last year. And while production was basically flat between the fourth quarter of 2018 and the first quarter of 2019, it was up materially year over year. Meanwhile, by focusing on industry leading investment opportunities, the company plans to materially increase its return on capital employed, which has suffered in recent years. Particularly exciting is the fact that the improvement on the production front is from just one of several projects (U.S. onshore drilling) management has in the works.   

Meanwhile, Exxon continues to have one of the strongest balance sheets of its integrated energy peers. Long-term debt is a minuscule 9% of the capital structure, providing plenty of leeway for the company to continue investing for the future no matter what happens with oil prices. (Note that first-quarter earnings were weak because of commodity price volatility.) And there's also plenty of room to continue its 36-year streak of annually increasing its dividend.   

XOM Dividend Yield (TTM) Chart

XOM Dividend Yield (TTM) data by YCharts.

The stock is up 18% so far in 2019, but it still trades at multi-decade lows on price to tangible book value and multi-decade highs on dividend yield. In other words, there's still time for dividend investors to pick up this Buffett castoff that's starting to prove (again) that it knows how to deal with a tough oil market.