Warren Buffett is an investing legend. The stock portfolio of his holding company Berkshire Hathaway (NYSE:BRK-A/NYSE:BRK-B) is closely followed by investors all over the world. That’s because these top Warren Buffett stocks are the cream of the crop — the very blue-chip companies with stable earnings, cash, yields, and buy backs. In fact, here are seven of the top Warren Buffett stocks you may want to consider before the fall season.
Warren Buffett Stocks: Apple (AAPL)
We begin with Buffett’s largest holding, Apple (NASDAQ:AAPL). Owning more than 915 million shares, the tech stock is, by far, the largest single holding of Berkshire Hathaway. What’s remarkable is that Buffett only began building a position in AAPL stock in 2016 after studiously avoiding nearly all technology stocks for most of his investing career.
Better, the billionaire continues to praise the company, its products, and its management team at every opportunity. At this year’s Berkshire Hathaway annual meeting, Buffett noted that most people would rather go without a second car than give-up their iPhone. However, while concerns have been raised about slowing sales of Apple’s electronic devices and Buffett’s outsized concentration in the stock. However, Buffett remains defiant and continues to buy AAPL stock every time
the share price dips. AAPL stock has gained 13% in the past 12 months.
Coca-Cola (KO)
One of Buffett’s largest and oldest holdings is in Coca-Cola (NYSE:KO). Berkshire Hathaway holds 400 million shares of KO stock, a position it has had for more than 30 years. Buffett likes many things about Coke, including its strong brand, competitive moat and strong financial results. He especially likes the annual dividend that Coca-Cola pays. With an annual dividend payout of $1.84 per share, Berkshire will collect $736 million from Coca-Cola this year alone.
Other investors should also consider acquiring KO stock. Beyond its dividend, the beverage giant also continues to be a best-in-class American company. Most recently, Coca-Cola reported strong second-quarter financial results, announcing earnings per share of 78 cents compared to 72 cents that was forecast among analysts on Wall Street. Revenue in Q2 totaled $11.97 billion versus $11.75 billion that was forecast. The company also raised its forward guidance. KO stock is down 3% over the past 12 months, presenting a buying opportunity.
Warren Buffett Stocks: Amazon (AMZN)
One of Buffett’s smaller positions is e-commerce giant, Amazon (NASDAQ:AMZN). Buffett owns a little more than 10 million shares of AMZN stock, worth about $1.5 billion currently. Despite the small position, the fact that Buffett invested in Amazon at all is a vote of confidence in the company that dominates the online retail space.
The good news for Buffett and other investors is that Amazon seems to have course-corrected and is in a good position once again. After overbuilding and over hiring during the pandemic, Amazon has shelved several expansion projects and cut tens of thousands of jobs. The changes appear to be paying off. The company’s Q2 earnings print was exceptionally strong. In fact, it was Amazon’s biggest earnings beat since the fourth quarter of 2020.
The Prime Day sales event held in July of this year generated $12 billion in sales for Amazon, making it the most successful such event in the company’s history. The next Prime Day sales event is scheduled for October 10 and 11. AMZN stock has risen 13% over the last 12 months.
Bank of America (BAC)
Warren Buffett’s favorite lender is Bank of America (NYSE:BAC). The Oracle of Omaha currently owns over one billion shares of BAC stock worth $29.59 billion. It’s one of his largest positions, comprising nearly 10% of Berkshire Hathaway’s portfolio. At one time or another, Buffett owned shares in all of the largest U.S. lenders. However, he has exited his positions in most bank stocks in recent years, with selling increasing as interest rates began to rise in 2022. However, Buffett remains long on Bank of America.
In interviews, Buffett has praised the management style of Bank of America CEO Brian Moynihan. He also seems to like BAC stock’s low valuation (it trades at eight times future earnings, high dividend (it offers a yield of 3.33%) and its strong financial performance. That BAC stock has been pulled lower this year due to turmoil in the banking sector and the failure of regional lenders such as Silicon Valley Bank and Signature Bank has not seemed to bother Buffett. He’s holding on even though BAC stock is down 16% over the last 12 months.
Warren Buffett Stocks: Occidental Petroleum (OXY)
From Buffett’s favorite bank to his favorite oil company, Occidental Petroleum (NYSE:OXY). Buffett has been most aggressive about buying OXY stock over the last 18 months. Beginning with the rise in crude oil prices in early 2022, Buffett has accumulated more than 224 million shares of Occidental Petroleum for a stake worth $14.75 billion. In fact, Buffett now owns a quarter (25%) of Occidental Petroleum, and rumors persist that he might end up buying the entire oil company, though Buffett denies those reports.
Like Bank of America, Buffett has said that he likes the way Occidental Petroleum is being managed and its business strategy. That startegy includes growth through acquisitions. Flush with cash following last year’s record profits, Occidental Petroleum has been on a buying spree lately, announcing that it is acquiring start-up company Carbon Engineering for $1.1 billion as it focuses on efforts to remove carbon dioxide from the atmosphere.
American Express (AXP)
Another one of Buffett’s oldest and largest positions is in credit card giant American Express (NYSE:AXP). Buffett first took a position in AXP stock back in the 1970s when the company’s “Don’t leave home without it” advertisements were flooding the airwaves. Today, Berkshire Hathaway owns more than 150 million shares of American Express valued at $25.16 billion. While there are many credit card companies to choose from, Buffett has said that he likes American Express’ competitive position when it comes to cards issued for business purposes.
Like most of his other holdings, AXP stock has a reasonable valuation, pays a regular dividend that appears to be secure, and has a track record of steady earnings growth. Most recently, American Express reported a Q2 profit that beat Wall Street forecasts and reaffirmed its full-year 2023 guidance. American Express said that it is seeing record levels of spending on its credit cards, notably through purchases related to travel and entertainment following the Covid-19 pandemic. AXP stock has gained 4% over the last 12 months.
General Motors (GM)
Warren Buffett only owns one automotive stock and that’s General Motors (NYSE:GM). Berkshire Hathaway currently holds 22 million shares of GM stock worth nearly $747 million. Buffett’s position isn’t surprising given that GM is the largest U.S. automaker and a classic American manufacturing brand. GM stock also pays a quarterly dividend and has a rock bottom valuation, trading at only four times future earnings. General Motors is also aggressively transitioning its fleet of cars, trucks and SUVs to fully electric versions.
That said, Buffett did recently sell some of his GM stock ahead of the current strike by the United Auto Workers (UAW). In August, it was revealed that Berkshire Hathaway sold 45% of its stake in GM, reducing its holding from 40 million shares to 22 million, according to a filing made with the U.S. Securities and Exchange Commission (SEC). Despite the sale, which came amid contract negotiations and reports of an impending strike, General Motors remains a long-term holding of Buffett. GM stock has decreased 13% over the past 12 months.
On the date of publication, Joel Baglole held long positions in AAPL and BAC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
