When Warren Buffet speaks, people listen. And when the Oracle of Omaha puts his money where his mouth is, it’s not necessarily a bad idea to mimic the investment. Now, I want to be careful here: you never want to use one person’s opinion as your sole guide. Still, with the level of expertise on hand, it’s tempting to consider Warren Buffett energy stocks.
Why energy? Obviously, none of the advanced innovations are possible without this sector. In addition, the Oracle is known for considering long-term fundamentals. It’s curious, then, that he has a few notable hydrocarbon enterprises listed under his conglomerate Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B). While fossil fuels might seem anachronistic, they’re still very much relevant.
Much of the reason centers on the science. Fossil fuels command high energy density, something that can’t be readily duplicated with renewable energy sources. Plus, with the Oracle backing the sector, there could be some more rewards on the horizon. With that, below are Warren Buffett energy stocks to buy.
Chevron (CVX)
Based in San Ramon, California, Chevron (NYSE:CVX) is one of the world’s supermajors. That’s a label applied to integrated oil and gas giants that dominate the global energy sector. Fundamentally, it’s no shock to see that CVX ranks among the top Warren Buffett energy stocks. While the hydrocarbon ecosystem is quite ancient, it may have a longer lifespan than many expect.
Again, it comes down to the science. Essentially, the physical laws of the universe prevent us from harvesting sunlight and wind power as a replacement for mainline energy resources. The amount of infrastructure needed to truly foster green societies is simply unfeasible. And that’s where the high energy density of fossil fuels enters the frame.
It’s not just talk. While the financial performance has been somewhat shaky, in the past two quarters, Chevron posted earnings per share of $3.08. This figure easily beat out the average consensus view of $2.94.
For fiscal 2024, analysts believe that sales could rise by 7.3% to $201.39 billion. Further, the high-side target lands at $218.94 billion. In other words, the Oracle knows what he’s doing.
Occidental Petroleum (OXY)
Another hydrocarbon specialist, Occidental Petroleum (NYSE:OXY) falls under the oil and gas exploration and production segment. Also known as the upstream component of the value chain, Occidental with its subsidiaries acquires and develops oil and gas properties in the U.S., the Middle East and North Africa. As the geopolitical backdrop threatens to disrupt global supply chains, demand for OXY stock could spike.
Indeed, tensions in the Middle East and Eastern Europe appear to be worsening. As well, we have an election cycle that could result in the unpredictable Donald Trump becoming president again. However, the Republicans should be friendly toward the hydrocarbon sector. Therefore, OXY stock may be poised for significant gains ahead.
Overall, the company posted an average EPS of 81 cents in the past four quarters. This beat out the consensus average view of 72 cents. To be fair, experts see very little sales growth in fiscal 2024 to $28.95 billion. However, in fiscal 2025, revenue could jump by 11% to $32.15 billion. Further, the high-side estimate calls for $34.59 billion. Thus, OXY ranks among the Warren Buffett energy stocks to consider.
BYD (BYDDF)
Of course, it would be remiss to characterize the Oracle of Omaha as only caring about fossil fuels. And that brings us to the Chinese multinational conglomerate BYD (OTCMKTS:BYDDF). Though not a pure play in the energy sector, one of its subsidiaries is BYD Auto, which produces electric vehicles. Per its public profile, the enterprise also specializes in rechargeable batteries and solar panels.
From an indirect standpoint, then, BYDDF represents one of the Warren Buffett energy stocks. Even more enticing, the Oracle seems to have his finger on the market’s pulse. BYD is one of the sponsors of the Euro 2024 football (soccer) championship; in fact, it’s the first Chinese automotive manufacturer to sponsor the event. Outside of the World Cup, there are few other tournaments of this caliber.
Further, the company is making steady financial progress. In the past four quarters, it posted an average EPS of 81 cents, beating out the consensus view of 72 cents. Unfortunately, forward financial projections are hard to come by for the company.
However, according to TipRanks, BYDDF commands a unanimous strong buy view among nine expert voices. For the gambler, it’s one of the tempting Warren Buffett energy stocks available.
On the date of publication, Josh Enomoto 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.
