You don't earn the nickname "Oracle of Omaha" without doing some serious thinking along the way. Warren Buffett has studied businesses for decades. He's been highly successful doing so, amassing a multibillion-dollar fortune along the way.
With that kind of track record, it seems reasonable to expect that Buffett's portfolio includes some great ideas for investors who aren't billionaires. And it does. Here are three no-brainer Buffett stocks to buy right now.
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1. Berkshire Hathaway
I'd put Buffett's own Berkshire Hathaway (BRK.A -0.34%) (BRK.B -0.01%) at the top of the list. After all, most of the legendary investor's personal fortune is in Berkshire stock. There's also the tiny detail that Berkshire has trounced the overall stock market over the years. The stock even recently hit its all-time high while the S&P 500 was floundering.
Perhaps the best reason to buy Berkshire Hathaway shares, though, is the tremendous diversification that it provides. Berkshire is really a company of companies. Its list of subsidiaries includes more than 60 different businesses spanning multiple industries.
Berkshire also owns equity positions in around 40 publicly traded companies. In some cases, it's the largest shareholder in those businesses.
Could Berkshire's share price sink if Buffett was no longer able to remain at the helm? Maybe. However, Buffett has built an incredibly strong management team, both on the operational side and in managing the conglomerate's investments. Berkshire seems likely to remain a winner over the long term.
2. Bank of America
Buffett has historically loved bank stocks. His favorite in the group, though, is without question Bank of America (BAC 1.70%). The big bank ranks as Berkshire's second-largest holding.
But you don't need to buy Bank of America shares just because Buffett likes it. There's a clear and compelling reason why investing in this stock makes sense right now -- rising interest rates.
Bank of America is well-positioned to benefit from rising interest rates. The company's profitability should increase as the spread between the interest it charges on loans grows faster than the interest it pays on deposits. BofA's return on equity also correlates with the federal funds rate.
Even if interest rates weren't going up, though, I think Bank of America would be a solid Buffett stock to buy. The company's investments in technology continue to pay off. Some banks might find their businesses disrupted by fintech innovations, but Bank of America is likely to survive and thrive.
3. AbbVie
Admittedly, Buffett isn't as big a fan of pharmaceutical stocks as he once was. However, Berkshire still owns positions in several drugmakers. AbbVie (ABBV 0.98%) looks like the best of the bunch.
My view is that the main reason to buy AbbVie right now is its valuation. The stock trades at less than 11.5 times expected earnings. That's much cheaper than the S&P 500's forward earnings multiple and below the pharmaceutical industry average as well.
AbbVie sports this attractive valuation even though its share price has soared nearly 30% year to date. Investors seem to like the stability that the company offers. And they almost certainly love its dividend, which currently yields close to 3.5%. This dividend is about as dependable as they come: AbbVie is a Dividend King with 50 consecutive years of dividend increases.
You should be aware that AbbVie's top-selling drug, Humira, will face biosimilar competition in the U.S. beginning next year. However, the company still expects to deliver solid growth throughout this decade thanks to its strong product lineup and pipeline.
