Warren Buffett is one of the most successful investors of all time. His knack for picking businesses -- not just stocks -- to invest in and holding them for long periods of time has proven to be a hugely successful investment strategy. Through his company, Berkshire Hathaway, Buffett owns over 40 stocks, three of which look like solid, no-brainer buys now.
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This Buffett stock is a money-compounding machine
Buffett first bought shares of Mastercard (MA 1.39%) in 2011 and continues to own shares in the payments processing giant. While you may have seen, and perhaps even use, Mastercard-branded credit and debit cards, the company doesn't issue them or lend any credit in any form. It only facilitates payments made using those cards anywhere in the world over its payments network in return for a fee.
Make no mistake -- it's a massive business. In 2024, Mastercard's gross dollar volume (GDV), or the dollar value of all transactions processed through its payment network, jumped 11% to $9.8 trillion. Mastercard generated $28 billion in revenue, up 12% over 2023, and earned nearly $15.6 billion in operating income and almost $13 billion in net income.
These numbers also prove how profitable Mastercard's business is and the kind of high margins it generates. That's one of the biggest reasons why Mastercard stock has been such a phenomenal wealth-builder over the years.
Mastercard's business goes beyond consumer payments. Commercial payments, or payment solutions for businesses, made up nearly 13% of its GDV in 2024. Its value-added services, meanwhile, now makes up almost 40% of its revenue as the company continues to leverage artificial intelligence (AI) to expand solutions like data analytics, fraud protection, and risk management.
With Mastercard seeing a lot of opportunities in commercial payments, AI, and value-added services and more economies increasingly shifting to digital payments, this Buffett stock remains a no-brainer buy.
The Buffett way to play oil and earn dividends
Chevron (CVX +2.90%) is one of the largest oil and gas-producing companies in the world. It is also among the largest integrated energy companies with significant upstream and downstream operations.
Despite the volatility in oil prices, Chevron has consistently rewarded shareholders, increasing its dividend for the past 38 consecutive years. Buffett loves dividends. As of the quarter ended March 31, Chevron was the fifth-largest holding in Berkshire Hathaway's portfolio and among the only two oil stocks Buffett owns, the other being Occidental Petroleum.
NYSE: CVX
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Chevron has extensive operations in the Permian Basin and is now aggressively expanding its Gulf of Mexico, which President Donald Trump renamed via executive order the Gulf of America, portfolio, as well as its Tenzig oil field in Kazakhstan, which it owns under the TCO joint venture. It is also investing in clean energy, including renewable fuel and carbon capture and storage. Chevron's latest move of buying land in the Smackover Formation in Texas and Arkansas marks its foray into the high-potential lithium business.
At a Brent Crude Oil price of $60 per barrel, Chevron expects to generate additional free cash flow worth $9 billion between 2024 and 2026. Meanwhile, Chevron is in the race to acquire Hess and its prized oil-rich Stabroek Block in Guyana. Although the acquisition has been delayed because of ongoing arbitration, Chevron is confident of closing it, and even acquired a 5% stake in Hess earlier this year.
Chevron's cash flows are all set to grow with or without Hess. With oil prices also on the rise, this 4.8%-yielding Buffett stock is a solid buy now.
This phenomenal Buffett stock has big growth plans
Buffett steered clear of auto stocks until 2008 when Charlie Munger, the late vice chairman of Berkshire Hathaway, urged him to buy shares in Chinese electric vehicle (EV) maker BYD (BYDD.F 0.56%) (BYDDY 0.32%). BYD's sales growth since has been nothing short of phenomenal, picking up the pace after 2020, when the EV maker embarked on an aggressive growth journey, launching new products, increasing production capacity, entering international markets, and securing an envious position in the lucrative EV battery space.
Today, BYD dominates the new energy vehicles (NEV) market in China. It cornered 28.9% of the market in the first five months of 2025, according to data from the China Passenger Car Association. Tesla, meanwhile, reported only a 4.6% market share during the period.
BYD is also among the world's largest EV battery makers, which gives it a solid competitive edge in the EV industry. From autonomous driving to a cloud-based platform to a smart car system, BYD uses AI extensively across its EV and battery businesses.
BYD slashed EV prices in May this year and is now reportedly cutting production, raising fears of a slowdown. However, that shouldn't change the long-term story for the EV maker. BYD's dominant position in China, ambitious goals to get 50% of its sales from overseas markets, and unbeatable moves like the recent launch of an ultra-fast, five-minute EV charging network should take care of its growth. Investors who buy this Buffett stock now can buy BYD shares from over-the-counter markets in the U.S. where they trade.
