Identifying the best Warren Buffett stocks requires a keen eye for value. Very few investors are able to effectively embody this philosophy. Known for his long term approach, Buffett seeks growth in companies that will provide sustainable and reliable returns.
Some of his key philosophies include companies with strong economic moats and a history of consistent earnings growth. By focusing on companies with solid fundamentals, Buffett has positioned his portfolio for both the best and worst of times. Now, let’s discuss the three best Warren Buffett Stocks to buy in December!
American Express (AXP)
American Express (NYSE:AXP) is a multinational financial services company headquartered in Manhattan, New York. Over the last few decades, American Express has grown into one of the strongest global brands in the world. They are one of the largest card networks globally, processing more $1.5 trillion in 2022.
With the current macroeconomic backdrop, American Express is well positioned for sustained revenue and EPS growth. Consumer spending has remained relatively high in 2023 despite higher interest rates and inflation. In fact, consumer credit card debt hit a record $1 trillion in Q3 2023 with average rates on retail credit cards hitting 29%. In Q3 2023, American Express saw record revenue of $15.4 billion, up 13% year-over-year (YOY). Net income swelled to $2.45 billion, or $3.30 per share. They are also seeing strong growth in the Millennial and Gen Z segment, with spending up 18% from the year prior.
CEO, Stephen Squeri said that ‘’we remain confident in our ability to achieve revenue and EPS growth for the full year consistent with our annual guidance.’’ American Express is the third largest position in Berkshire Hathaway’s (NYSE:BRK-A, NYSE:BRK-B) portfolio, making it one of the best Warren Buffett stocks to buy.
D.R. Horton (DHI)
D.R. Horton (NYSE:DHI) is an American home construction company headquartered in Arlington, Texas. Since 2022, they have been America’s largest homebuilder by volume, closing more than 1 million homes. Over the last decade the company has seen strong revenue growth, and its dividend has grown favorably alongside it.
The company is seeing strong growth, despite the real estate market softening amid inflation and higher mortgage rates. In Q4 FY23, D.R. Horton revenue grew 9% YOY to $10.5 billion. Net sales for the quarter increased 34% YOY to 18,939 homes and up 34% in market value. Their execution has resulted in incremental gains, solidifying their footing as the largest homebuilder in the U.S. for 22 consecutive years.
Furthermore, D.R. Horton has delivered high double digit dividend growth over the last decade. This includes a 20% increase to 30 cents per share attributable to shareholders of record after their FY23 results. With a P/E of just 9.44, D.R. Horton should be kept on your radar as a top Warren Buffett stocks going into 2024.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) stock has had an impressive run in 2023. The stock is up nearly 70% YTD, as a result of restructuring efforts from CEO, Andy Jassy. They have been making serious progress in their generative AI efforts, with cost-cutting driving profitable growth.
Overall, Amazon has been seeing growth across all segments of its business. But focus has been on generative AI services for its AWS customers. More recently, they announced a blockbuster investment of up to $4 billion in AI startup, Anthropic. This investment showcased their commitment to being a leader in the AI race. In Q3 2023 financial results, Amazon’s revenue grew 13% YOY to $143.1 billion. Free cash flow swelled to $21.4 billion, a significant improvement from negative FCF in the year prior. Operating income also grew more than 4X to $11.2 billion, with North America and AWS being the sole drivers. As generative AI continues to shape the future, Amazon is one of the best Warren Buffet stocks to buy in December.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
