8 Stocks That Warren Buffett Dominates
Warren Buffett is arguably the most successful investor of all time. Through his holding company, Berkshire Hathaway (NYSE:BRK.B), the so-called “Oracle of Omaha” has amassed a huge investment portfolio that is …
Warren Buffett is arguably the most successful investor of all time. Through his holding company, Berkshire Hathaway (NYSE:BRK.B), the so-called “Oracle of Omaha” has amassed a huge investment portfolio that is today worth $333 billion.
Warren Buffett is a classic value investor and discerning in his stock picks. He searches out companies that have a moat around their business and a durable competitive advantage. Additionally, he tends to focus on undervalued stocks, noted for his prescient stock purchases when markets are selling off. Indeed, this was certainly the case over the past year.
And while Berkshire Hathaway does not pay dividends, Buffett prefers stocks that offer a quarterly payout to shareholders. Also known for concentrating his positions, Warren Buffett has said that when he finds a stock he likes, he buys as much of it as he can. This approach has made him the biggest shareholder in several important businesses.
Here are eight stocks where Warren Buffett is the number one shareholder today.
Bank of America
American Express (AXP)
Warren Buffett has held positions in American Express (NYSE:AXP) since the 1960s. However, his current work in the credit card giant dates to the 1980s.
Today, the Oracle of Omaha owns more than 150 million shares of AXP stock, worth $26 billion or about 20% of the company, making him its largest shareholder. The next largest shareholder, Vanguard, owns only 6% of American Express. Buffett has long been a fan of American Express and its business model, mainly because its credit cards are used for business and leisure pursuits.
In interviews over the years, Buffett has expressed his admiration for American Express’ strong brand and customer loyalty. He also likes the fact that American Express caters to a more affluent customer base. Furthermore, during recessionary environments, the company has managed to keep its bad loan totals down.
These factors give American Express a wide moat around its core business, which is what Buffett looks for when deciding to take a position in a stock.
Lastly, American Express is more diversified than other credit card issuers, having an end-to-end payments network that Buffett has singled out as beneficial to the company and its shareholders.
Bank of America (BAC)
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Warren Buffett has long been a fan of bank stocks and has held positions in most major U.S. lenders at one time or another. However, his most prominent position in a bank stock is in Bank of America (NYSE:BAC). Berkshire Hathaway owns over one billion BAC stock shares, worth nearly $34 billion, amounting to a 12.9% stake in the lender. Bank of America is Berkshire Hathaway’s second-largest holding after Apple (NASDAQ:AAPL). Its Bank of America position is 10% of Berkshire’s current portfolio.
Buffett dramatically increased his Bank of America position in recent years, buying the stock hand-over-fist during the pandemic in 2020 when BAC stock fell below $20. The stock has since recovered, and is now trading above $30 per share. However, BAC stock is currently 27% below its 52-week high of $44.63, as it declined over the past year along with the broader market.
That said, Buffett remains committed to Bank of America. While he has recently trimmed his position in other bank stocks, notably in US Bancorp (NYSE:USB), Bank of America appears to be his long-term pick in this sector. That’s something all investors should take into consideration.
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The media tends to focus on Buffett’s other significant oil holdings, but Berkshire Hathaway is now the single largest shareholder in Chevron (NYSE:CVX). The company’s stake in Chevron grew steadily throughout 2022 as crude oil prices crested above $120 a barrel. Today, Berkshire owns more than 167 million shares of CVX stock, which comprises nearly 9% of the company and is valued at $27.55 billion. Berkshire’s Chevron holding makes up roughly 8.3% of the company’s overall portfolio.
Warren Buffett had incredible foresight regarding Chevron, first buying the stock in mid-2020 before oil prices took off. In the first quarter of 2022, Berkshire Hathaway increased its stake in CVX stock five-fold as crude prices increased following Russia’s invasion of Ukraine.
Chevron’s share price has retreated alongside declining energy prices in recent months, and are now trading 14% lower than its 52-week high of $189.68 reached last November. However, Buffett, no doubt likes that Chevron pays a hefty quarterly dividend that currently yields 3.8%. Chevron has also used its windfall profits from the past year to launch a new $75 billion stock buyback program.
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Coca-Cola (NYSE:KO) is arguably the stock Buffett is most associated with. Holding the same position in the Atlanta-based beverage giant since the late-1980s, Berkshire Hathaway owns 400 million KO stock worth $24 billion, making up approximately 7.2% of Buffett’s portfolio.
With a 9.2% ownership stake, Buffett is Coca-Cola’s largest shareholder. He’s also one of the biggest soft drink fans, so much so that he has had a Coke dispenser installed at Berkshire Hathaway’s head office in Omaha, Nebraska.
In addition to being a reliable stock in good and bad economic times, Coca-Cola has also been a dividend powerhouse for Berkshire Hathaway. With a current dividend yield of 3.1% and a quarterly payout of 46 cents per share, Berkshire Hathaway will make $736 million from Coca-Cola’s dividend payments this year alone. No wonder Buffett frequently boasts that his investment in Coca-Cola has paid for itself many times over the past three decades.
HP Inc. (HPQ)
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This is a strange one. While many people know Buffett’s biggest holding is tech giant Apple, few people would know that Berkshire Hathaway is the largest shareholder of legacy tech company HP Inc. (NYSE:HPQ).
A personal computer and printer maker, HP has been in business since 1939, and the home where the company was founded in Palo Alto, California, has been designated as a historical landmark and marked with a plaque that reads: “Birthplace of ‘Silicon Valley.’”
Buffett’s interest in HP’s stock likely has nothing to do with sentimentality. Berkshire Hathaway owns 120 million HPQ shares valued at $3.35 billion. While the HP stake makes up only 1% of Berkshire Hathaway’s portfolio, it constitutes 12.3% of Hewlett-Packard’s outstanding shares, making Buffett its largest shareholder.
HP stock has been a bit of a laggard among tech firms, having risen only 14% over the last five years to $28 a share. However, the stock does pay a hefty dividend yield of 3.8%, with a quarterly payout of 26 cents per share.
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Like most of Buffett’s stock holdings, credit rating agency Moody’s Corp. (NYSE:MCO) has a wide moat and durable competitive advantage. The New York City-based company is part of a duopoly with fellow credit rating agency S&P Global Ratings (NYSE:SPGI). Currently, Moody’s and S&P Global each control about 40% of the global market for credit ratings. This puts Moody’s in a strong position and makes it a solid long-term investment.
Berkshire Hathaway owns nearly 25 million shares of MCO stock, giving it a 13.5% stake in the credit rating agency and making it the company’s largest shareholder. Valued at $7.26 billion, Moody’s position accounts for 2.2% of Berkshire Hathaway’s portfolio.
Indeed, Moody’s stock has been a solid performer for Buffett. The company’s share price is up 7% this year in what continues to be a volatile market, and it has gained 73% over the last five years to trade at $294 per share. Furthermore, Moody’s quarterly dividend of 77 cents a share (1% yield) provides another reason to get excited about this stock.
Occidental Petroleum (OXY)
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News just broke that Buffett is again buying shares of energy giant Occidental Petroleum (NYSE:OXY). Regulatory filings show that Berkshire Hathaway bought nearly 5.8 million oil company shares at the start of March, paying between $59.80 and $61.90 per share. The latest purchase means that Berkshire now owns 200 million shares of OXY stock, or 22% of the company, worth $12 billion based on the current share price of around $60.
Occidental Petroleum is now among the top 10 holdings in Berkshire Hathaway’s $332 billion portfolio. Last year, Buffett received regulatory approval to purchase up to 50% of OXY stock, raising speculation that he might buy all of the Houston-based oil company.
Buffett tends to buy the stock any time it falls to around $60 a share or lower. Occidental’s stock is flat on the year after more than doubling in price during 2022 when global prices for crude oil were elevated.
Paramount Global (PARA)
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This is one of Berkshire Hathaway’s newest positions in the company. As is typical, Warren Buffett has been buying shares of entertainment company Paramount Global (NASDAQ:PARA) in droves. The latest regulatory filings show that Buffett bought 2.4 million shares of PARA stock in the fourth quarter of 2022 as the price slumped. He started purchasing the stock in the first quarter of 2022, and now holds more than 93.5 million shares worth $2 billion.
Although Paramount Global’s position makes up less than 1% of Berkshire’s portfolio, the holding company is now the largest shareholder of the entertainment conglomerate. Currently, Berkshire owns a 15.4% ownership stake in the media giant. Today, Paramount Global owns the Paramount Pictures film studio, the CBS television network, and a host of specialty TV channels such as MTV, Nickelodeon, and Comedy Central. Additionally, the company is ramping up its Paramount+ and Pluto TV streaming services.
PARA stock likely appeals to Buffett as it is relatively cheap at $21 a share and with a price-earnings ratio of 21-times. Plus, the company pays a chunky dividend that yields 4.6%, or quarterly payment to stockholders of 24 cents per share.
On the date of publication, Joel Baglole held long positions in BAC and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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