Investors continue to look for the market to broaden before jumping in. They may be waiting awhile. However, if you have a long-term view of the market, it’s a good time to look for some Warren Buffett stocks to buy now.
A Warren Buffett stock is a stock owned by Buffett’s hedge fund, Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B). Each stock highlights one or more of the investment principles associated with Buffett himself such as stable revenue and earnings, companies that show a competitive advantage (e.g. a moat) and the potential for long-term growth.
Not only are these principles always in style, but finding Warren Buffett stocks to buy now is particularly relevant in a market showing why best-in-class companies with solid fundamentals are solid stocks to own.
Investing like Buffett is too conservative for many investors. Others will point out that his approach may not be suitable for the digital, high-speed trading floors of today. But the track record speaks for itself. That is why many investors own one or more Buffett stocks either individually or in the funds they own.
Occidental Petroleum (OXY)
Although crude oil prices have stayed below the $80 level, they’re not likely to stay there for long. Even if consumer demand wanes this summer, meteorologists are predicting this to be an active hurricane season which could be disruptive to drilling operations.
And if you’re looking for an oil stock to buy, Occidental Petroleum (NYSE:OXY) is one of the Warren Buffet stocks to buy now. In fact, Buffett himself is buying shares again. His recent purchase raised Berkshire’s ownership stake in the company to approximately 29%.
What does Buffett continue to see in Occidental? He has long spoken of his admiration for Occidental CEO Vicki Hollub. Over the past several quarters, the company has been focusing its efforts on reducing debt, which is increasing its outlook for free cash flow.
And while oil will continue to be relevant for years, if not decades, to come, Buffett is also interested in Occidental’s investment in a lower carbon future through the company’s Zero In initiative.
Bristol-Myers Squibb (BMY)
There are two stories that investors should understand when it comes to Bristol-Myers Squibb (NYSE:BMY). The first is that the company faces patent expirations in the next couple of years. However, the company is making strategic acquisitions it believes will help bring other drugs to market to offset revenue loss.
This transition could take some time. However, much of the company’s pipeline is in the area of oncology. That’s significant by itself, but it’s particularly significant in the context of the company’s earnings outlook. In the first quarter, it posted a negative $4.40 per share. That’s an ouch, but one the company should recover from strongly. If it can, BMY stock is vastly undervalued.
Bristol-Myers Squibb offers investors a high-yield dividend of 5.9%. It has also increased its dividend for 16 consecutive years. Combine that with a stock price under $50, and BMY stock doesn’t appear to be a bad place to hang out while you wait for its pipeline to mature.
Visa (V)
If there’s one universal truth about investing, it’s that earnings growth leads to stock price growth. Visa (NYSE:V) is expected to increase earnings by 11% in the next year. That makes it an easy choice for this list of Warren Buffett stocks to buy now.
Visa is the world’s leading payment processor, with its fingers in the pie of the vast majority of transactions that occur daily. V stock is up 19% in the last 12 months but down about 5% in the last three months. This is likely because of concerns that consumer spending is winding down.
That’s not a bet I’d be making, particularly if the next directional move for interest rates is lower. That would be bullish for the consumer. Analysts seem to agree that this is a buyable dip. Analysts give V stock a Strong Buy rating with a price target of $310.25. That’s a 14.4% upside to go along with a dividend that’s been increasing for 16 consecutive years.
On the date of publication, Chris Markoch did not hold (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.
