Three Warren Buffett Stocks Worth Considering Right Now

It's no secret that Warren Buffett, known as the "Oracle of Omaha," is one of the most successful investors of all time. His company, Berkshire Hathaway (BRK.A) (BRK.B), has significantly outperformed the S&P 500, achieving over 931% growth since 1998. Buffett and his late business partner, Charlie Munger, achieved this remarkable success by focusing on high-quality investments and value. For any investor looking for solid options from Berkshire Hathaway's portfolio, here are three standout stocks to consider.

Vanguard S&P 500 ETF

One of the simplest and most effective investment strategies is to include an S&P 500-focused index fund in your portfolio, and the Vanguard S&P 500 ETF (VOO) is a prime choice. This exchange-traded fund (ETF) is designed to track the performance of the S&P 500 index, providing investors with broad exposure to large-cap stocks.

For those who invest passively, the results can be impressive; the share price of this ETF has nearly doubled over the past five years. This investment approach is straightforward, making it accessible to everyone. In fact, many hedge fund managers struggle to outperform the S&P 500 benchmark, reinforcing the notion that an ETF like this is a valuable addition to any investor's strategy.

Moody's

Another fantastic option is Moody's Corp (MCO). The demand for bond credit ratings is unlikely to diminish anytime soon, and Moody's holds a leading position in this industry. Over the past five years, it has outperformed the S&P 500 by 22%. Moody's had a strong start to 2024, with revenue increasing by 22% year over year and diluted earnings per share rising by 32% through the third quarter.

For the full year, Moody's expects diluted earnings to fall between $10.85 and $11.05 per share. While the stock may seem expensive at over 40 times forward earnings, its stability and critical role in the financial world make it a compelling investment.

American Express

American Express (AXP) stands out as a credit card issuer catering to higher-income consumers. This positions the company well, even amid weaker consumer trends. I find American Express appealing due to its strong annual growth rates and positive guidance for the remainder of 2024.

Though it may not exhibit the same volatility as high-flying stocks like Nvidia, American Express has still outperformed the S&P 500 by nearly 28% in the past five years. Over the past three years, the company has consistently reported double-digit revenue growth, and this trend continues into 2024. In its third quarter, American Express recorded an impressive $16.6 billion in revenue, an 8% increase year on year. The company has even raised its earnings per share guidance for the year to $13.75 to $14.05, a positive sign for its investors. At this level, the stock trades at a forward price-to-earnings ratio of just under 20, which is slightly above its five-year average.

Overall, American Express presents a solid investment opportunity for those looking to hold onto their stock for the long haul. The reliance on credit is not a fleeting trend, making companies like American Express particularly attractive for long-term investors. This may explain why Berkshire Hathaway has invested over $40 billion in it.

Investing, Stocks, Buffett