You don't need billions of dollars to invest like Warren Buffett. The Oracle of Omaha started with a relatively modest amount to invest decades ago.
A few hundred dollars will allow you to invest in some of the top stocks in Buffett's Berkshire Hathaway portfolio. Here are my picks for the three best Buffett stocks to buy with $300 right now (listed in alphabetical order).
1. Chevron
Chevron (CVX 0.37%) was one of only three stocks that Buffett bought in the fourth quarter of 2023, according to Berkshire's latest 13-F regulatory filing. The giant oil and gas company ranks as the fifth-largest position in Berkshire's portfolio.
You'll need less than $160 to buy one share of Chevron at its current price. I think it would be money well invested.
Chevron's valuation is attractive with a forward price-to-earnings ratio of around 12x. The company offers a juicy dividend yield of nearly 4.2%. It has also increased the dividend payout for 37 consecutive years.
Most importantly, though, Chevron's growth prospects look good. I think it's highly likely that oil prices will rise over the next few years. As oil prices go, so goes the company's share price. Chevron could also have a big opportunity with carbon capture if the technology lives up to its potential.
2. Lennar
Lennar (LEN 0.98%) is one of the smallest Buffett holdings. Berkshire's stake in the homebuilder is currently valued at less than $23 million -- pocket change for the giant conglomerate. However, I think Lennar deserves serious consideration from investors right now.
It's cheap in a couple of ways. Depending on how Lennar's share price fluctuates, you could buy two shares for $300. The stock also trades at a low forward earnings multiple of 11.6x.
Lennar provides a great way to profit from the ongoing U.S. housing shortage. That shortage is real: A recent analysis by Realtor.com showed the gap between housing starts and household formations widened in 2023. As one of the largest homebuilders in the country, Lennar is well positioned to benefit as this housing gap narrows over the long term.
This stock could also have a catalyst over the near term. Earlier this month, Federal Reserve officials indicated that three interest-rate cuts could be coming in 2024. Lower interest rates should help bring mortgage rates down and potentially spur more housing starts -- which is great news for Lennar.
3. Occidental Petroleum
What stock has Buffett bought the most aggressively over the last couple of years? Aside from Berkshire Hathaway itself, the answer is Occidental Petroleum (OXY -0.15%). This oil company is one spot behind Chevron as the sixth-largest position in Berkshire's portfolio.
Occidental is the most affordable of these three stocks with its share price hovering around $65. It's also valued reasonably, with shares trading at 17.5 times forward earnings.
CEO Vicki Hollub predicts an oil supply shortage by the end of 2025. If she's right, the company's stock should soar in the not-too-distant future. I'm not as confident as she is on the timing, but I suspect that the combination of sustained demand without enough new supply will lead to higher prices.
Occidental is betting heavily on direct air capture, a type of carbon capture that sucks carbon dioxide from the atmosphere. Like Buffett, I'm cautiously optimistic about the company's chances with this technology.
