Many investors like to turn to Warren Buffett's investing ideas for improving returns. While studying Berkshire Hathaway's (BRK.A 1.18%) (BRK.B 1.30%) portfolio may seem prudent, investors should remember that not all of his holdings are buys at this time. Nonetheless, he also owns some stocks -- including DaVita (DVA 1.36%), STORE Capital (STOR), and Verizon (VZ 0.90%) -- that make compelling cases for adding new positions. 

Warren Buffett holding a conversation at a large event.

Image source: The Motley Fool.

1. DaVita

DaVita continues to benefit from a perfect storm of demographics and government funding. About 10,000 baby boomers age into Medicare, which covers dialysis services, every day. With the youngest baby boomers now in their late 50s, the trend will probably continue to play into the hands of the Denver-based dialysis giant.

HealthCare Appraisers has DaVita's market share at 37%; rival Fresenius has about 38%. While its market share makes DaVita appear well-positioned in the market, holistic companies such as Somatus seek to steer patients away from needing dialysis. Additionally, Assembly Bill 290 threatens to reduce reimbursements at dialysis clinics in California, a state making up 12% of the U.S. population. However, a court has halted the implementation of this bill for now. 

Amid these competitive and political threats, DaVita's revenue for the first two quarters came in at just over $5.7 billion, an increase of less than 1% compared with the first six months of 2020. On the second-quarter 2021 earnings call, management blamed excess mortality and higher PPE costs related to COVID-19 for the flat revenue increases. Still, reductions in operating expenses, debt expenses, and income taxes helped boost DaVita's six-month income to $531 million, a 20% increase over that period in 2020.

DaVita stock has risen by about 55% over the last 12 months, and its P/E ratio has climbed from about 13 to 20 over that time. Archrival Fresenius maintains a similar multiple. As the world recovers from COVID-19 and DaVita's valuation moves back to long-term historical averages, the stock should continue to deliver shareholder returns.

2. STORE Capital

STORE bills itself as a "leader in middle-market real estate capital solutions." It's continuously seeking to add to its portfolio, which now numbers more than 2,700 properties including restaurants, health clubs, and metal fabrication facilities.

The company offers triple-net leases, meaning it holds single-tenant properties for which the renter takes responsibility for insurance, maintenance, and property taxes. While the real estate investment trust (REIT) benefits from offloading such costs, the company did suffer during the pandemic as its overall rent collections fell to a low of 69% in May 2020. However, conditions steadily recovered, and STORE's rent collections have now reached 98% as of July 2021.

This comeback helped push the company to revenue of $374 million in the first two quarters of 2021, an 8% increase from the same period in 2020. While operating expenses surged by 13%, nearly $22 million in net gains from selling properties resulted in net income rising to over $117 million, 14% higher than in the same period last year.

Furthermore, because this is a REIT, investors will earn a dividend of at least 90% of the company's net income. Currently, that amounts to $1.44 per share annually, a cash return of 3.9% -- about 3 times the S&P 500's current average. Also, management just raised their estimate for income from 2021 adjusted funds from operations (AFFO) -- earnings after subtracting gains from property sales and adding back depreciation and amortization. With the new estimate coming in at between $1.94 and $1.97 per share, it can easily cover the dividend.

Thanks to the recovery, STORE stock has climbed 50% over the last 12 months, nearly reaching its pre-pandemic high. Although it may not repeat such gains, its high dividend yield and ongoing efforts to acquire new properties should continue to deliver investor returns.

3. Verizon 

Many know that Verizon is only one of three 5G providers in the U.S. What some investors may overlook is what 5G may mean to Verizon, a company that has won J.D. Power's No. 1 ranking for network quality 26 consecutive times and the RootMetrics award for overall network performance for 15 years in a row.

Verizon's 5G capabilities could take the company to the next level by offering something not possible in the 4G world -- network-as-a-service (NaaS). NaaS is a subscription-based cloud service that powers artificial intelligence, virtual reality, and Internet of Things-based applications. This has enabled functionality in industries ranging from remote monitoring to autonomous vehicles. While AT&T and T-Mobile have increasingly emphasized cloud services, Verizon was the only major telco to extensively discuss NaaS on its latest earnings call. This could indicate that Verizon better sees its potential.

For the first six months of 2021, revenue rose by 7% compared with the first two quarters of 2020, reaching $66.6 billion. Over the same period, net income surged 24% to $11.3 billion as slower growth in expenses and non-core sources of earnings helped to boost this number.

However, two factors likely drove Buffett's interest. One is the dividend. At $2.51 per share, Verizon delivers a 4.5% cash return. Moreover, that dividend has risen every year since 2007, and it has offered a payout since before the Bell Atlantic/GTE merger formed Verizon in 2000.

The second factor is valuation. Verizon sells for only 11 times its earnings. This comes in well below the 19 P/E ratio for AT&T and the 45 earnings multiple of T-Mobile. Given the dividend, its discounted valuation, and the potential for the NaaS business, Verizon holds meaningful long-term potential for gains. Moreover, the 4% decline in its stock price over the past 12 months should provide a buying opportunity for those seeking to add positions.