If you know anything about Warren Buffett, you probably greatly admire how he has increased the value of his company, Berkshire Hathaway, by an annual average of nearly 20% over close to 60 years. Buffett has bought many great companies outright and has invested in the stock of other companies. For example, Berkshire owns the likes of GEICO, Benjamin Moore, Dairy Queen International, the entire BNSF railroad, and sizable chunks of companies such as American Express, Coca-Cola, and Bank of America.
You might aim to share in Buffett's success by investing in Berkshire yourself. Alternatively, you might consider buying some of the stocks he or his investing lieutenants, Ted Weschler and Todd Combs, have bought. Here are three to learn about and consider.
Image source: The Motley Fool.
1. Amazon
Berkshire recently owned close to $2 billion worth of stock in Amazon.com (AMZN 2.61%) -- some 10 million shares. It's only Berkshire's 17th-largest holding, but it might deserve to be a bigger portion of your portfolio.
Yes, it's home to the massive online marketplace you're surely familiar with, but there's more -- such as its Amazon Web Services, the leading cloud computing platform. Amazon also includes properties such as GoodReads, Fire devices, Zappos shoes, Ring devices, Whole Foods Market, and Audible, among many other businesses. It's also been investing heavily in artificial intelligence (AI).
NASDAQ: AMZN
Key Data Points
Amazon is huge, with a recent market value of $2.4 trillion, and it's still growing at a good clip. In its third quarter, revenue increased by 11% year over year, with international revenue growing by 12% and operating income rising by 55%. With its recent forward-looking price-to-earnings (P/E) ratio of 36, well below its five-year average of 52, the stock seems attractively valued.
2. Chevron
Chevron (CVX +0.05%) is a major integrated oil and gas enterprise, and it was recently Berkshire's fifth-biggest holding, valued at nearly $17.5 billion. If you buy into it, note that the energy industry is rather cyclical, going through periods of ups and downs -- while generally growing. Chevron has grown into a business with a recent market value of nearly $290 billion.
NYSE: CVX
Key Data Points
Chevron's third-quarter results weren't as impressive as some might have wanted; it topped various expectations but with smaller-than-expected losses. It also rewarded its shareholders with $7.7 billion -- partly via dividend payments and partly via stock repurchases. Chevron has long been a terrific dividend-paying stock and has upped its payout for dozens of years in a row. The company plans to cut its spending by some $2 billion, which can lead to even better results for shareholders.
Chevron's forward P/E was recently 13, a bit below its five-year average of 14, suggesting a reasonable or attractive price. Its dividend yield was recently 4%.
3. Visa
Visa (V 0.68%) is a financial powerhouse, recently sporting a market value of $620 billion. It was also recently Berkshire's 15th-largest holding. (It's worth noting that Berkshire's second-biggest holding is American Express, which is another specialist in payment cards and more.)
There's a lot to like about Visa's business -- starting with its dominance. It operates in more than 200 countries and territories, boasts some 4.5 billion cards worldwide, and facilitates roughly 300 billion transactions per year valued at more than $15 trillion. It's still growing, too -- with revenue up 12% year over year in its fourth quarter and net income up 14%.
NYSE: V
Key Data Points
Visa isn't the most attractively valued cashless transaction specialist, but its recent forward P/E of 28.5 is roughly the same as its five-year average, suggesting a reasonable valuation for a solid grower. Its recent dividend yield of 0.74% may not be inspiring, but it has been growing at an impressive rate. Its dividends per share per year were recently $2.15, up from $1.58 in 2022 and just $1.05 in 2019. Visa's business is also not very capital-intensive, which is a plus for many investors.
These are just a few of many solid companies owned entirely or partially by Berkshire Hathaway. Take a closer look at the ones that interest you. And remember that you might also look into some high-performing dividend-focused ETFs or some ETFs that are growing briskly with or without generating much dividend income.
