The 7 Best Warren Buffett Stocks to Buy

People used to think picking the best Warren Buffet stocks was easy, but that sentiment isn’t what it was.

Coming into 2022, many people said that Warren Buffett had finally lost his touch. The world’s most famous investor has outperformed for decades, but he had largely missed the recent tech boom. After a long and incredibly successful career, perhaps it was time for Buffett to pass the reins on at Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B).

However, 2022 has given Buffett another high note in his illustrious career. Buffett’s stocks, which lean toward defensive holdings, have held up well while many of the market’s former high-fliers have plummeted this year. With a bear market now fully in swing, Berkshire’s portfolio makes a lot of sense for riding out current market volatility.

With Berkshire owning dozens of different stocks, however, it isn’t practical for most investors to replicate the entirety of Berkshire’s publicly-traded holdings. As such, these are the seven best Warren Buffet stocks hold the most appeal through the end of 2022.

C Citigroup $45.26
KO Coca-Cola $58.67
DEO Diageo $168.50
CVX Chevon $173.68
MCO Moody’s  $255.02
V Visa $193.77
USB US Bancorp $41.90

Citigroup (C)

Too-big-to-fail bank Citigroup (NYSE:C) is one of the most interesting holdings in Warren Buffett’s portfolio today. That’s because Berkshire has been a huge buyer of C stock in 2022, building a large position.

Berkshire now owns more than 55 million shares of Citigroup, which adds up to 2.9% of the bank’s entire shares outstanding. The position is worth nearly $2.5 billion.

Citigroup is one of the best Warren Buffet stockss because it has developed a reputation for operational problems in recent years. An overly-extended international footprint has led to weakness in various overseas markets. Citigroup’s profitability has also lagged other large American banks. There’s a lot to clean up on the execution front.

But wow, shares are cheap. Citigroup is now selling for around just half of its tangible book value. That’s a price you normally only see for banks that are in a distressed state of affairs.

Citigroup has problems, but it’s not in any danger of financial failure. In fact, Citigroup is exceptionally profitable, with shares going for just six times forward earnings. The stock also offers a 4.6% dividend yield, rewarding Buffett and other Citigroup shareholders to wait until sentiment picks up.

Coca-Cola (KO)

Coca-Cola (NYSE:KO) is one of Warren Buffett’s iconic holdings. The Oracle of Omaha is known for his love of Cherry Cokes and reportedly drinks several cans of Coke products on an average day.

His loyalty makes sense when you consider Berkshire’s massive holding in the soft drink company. Berkshire owns a stately 400 million shares of Coca-Cola, or 9.2% of the whole company. That stake is worth $23 billion. With the annual dividend at $1.76 per share per year, Coca-Cola also pays Berkshire more than $700 million each and every year simply from dividends.

Coca-Cola is still one of the best Warren Buffet stocks even though it’s not as glamorous as it used to be, given the rising health concerns around excess sugar consumption.

Coca-Cola has done a good job with diet beverages and other products with less or no sugar. Shares are at 23 times forward earnings, which isn’t super cheap but is a reasonable valuation for a high-quality defensive stock such as this one.

Diageo (DEO)

Diageo (NYSE:DEO) is one of Berkshire’s smallest portfolio holdings, with it holding a modest 227,750 DEO stock shares at this point. By Buffett standards, that’s chump change.

However, Diageo might be a name that Berkshire wants to elevate into a larger holding going forward, making it one of the best Warren Buffet stocks to buy and hold.

The company seems like a classic Berkshire name in the Coca-Cola spirit. Diageo makes a wide range of alcoholic beverages including Smirnoff, Johnnie Walker, and Guinness beer. Business is good, and rarely fluctuates despite changing economic conditions as alcohol consumption tends to hold up even during recessions.

Diageo is a value pick now, as shares have dipped to just 20x forward earnings, which is well below its historic median. This is likely because Diageo’s headquarters is in the United Kingdom. Thus, DEO stock has gotten caught up in the brutal sell-off around British assets this year. However, the current geopolitical uncertainties should offer long-term investors a compelling entry point.

Chevron (CVX)

Strong demand for refined products and petrochemicals have further brightened the profitability picture for Chevon (NYSE:CVX).

Berkshire owns more than 163 million shares of Chevron, which makes it an owner of 8.4% of the entire company.

That amounts to a stake worth more than $28 billion. Shares currently trade for around 10x earnings and offer a 3.3% dividend yield. On top of that, with the huge cash flows being generated today, Chevron should be able to buy back a lot of stock in the coming months and years.

Moody’s (MCO)

Moody’s (NYSE:MCO) is one of the best Warren Buffet stocks to buy for a few reasons.

One, there are only three major players in the credit rating space. This means that competition is limited and the firms can charge high prices for their services.

Two, credit ratings are essential to issuing bonds. Many groups, such as pensions and exchange-traded funds (ETFs) won’t buy bonds unless they meet a minimum credit rating grade. When you combine a monopoly-type industry with a product that must be purchased, you tend to get strong results.

MCO stock tends to be expensive thanks to these strong characteristics. However, the 2022 bear market has changed that. Moody’s shares have slumped 36% year-to-date as investors fear a slowdown in new bond issuance.

That’s true enough in the short term. Over a longer time horizon, however, bond issuance isn’t going anywhere and Moody’s will charge its large and growing transaction fees on the broader U.S. credit market.

Visa (V)

Credit card company Visa (NYSE:V) has had an up-and-down couple of years. Shares initially slumped amid fears of a pandemic-induced slowdown.

Now, credit is picking back up amid an historic surge in consumer spending. Visa’s profits have been more muted, however, as it relies on international transactions for a sizable piece of its business. International travel is finally starting to really get back toward pre-pandemic levels now.

Visa shares are once again selling off, now on concerns around inflation and weakening consumer sentiment. However, investors shouldn’t be too worried. For one, inflation automatically boosts Visa’s revenues, since it charges a percentage-based transaction fee. As nominal prices go up, so do Visa’s revenues.

Berkshire Hathaway currently owns almost 8.3 million shares of V stock, which works out to a holding of more than $1.5 billion. Given Buffett’s love of financial companies with a strong consumer brand, Visa still is one of the best Warren Buffet stocks to hold for the long term.

US Bancorp (USB)

US Bancorp (NYSE:USB) is one of Buffett’s bigger holdings, even if it is less well-followed than Citigroup.

Berkshire Hathaway owns 137 million shares of USB stock, which is worth more than $5 billion today.

US Bancorp isone of the best Warren Buffet stocks to buy because it’s known for running a tight ship. It has a strong consumer banking franchise and tends to stay out of riskier lines of business that have tripped up other banks in its peer group.

US Bancorp shares have fallen more than 25% year-to-date, pushing shares down to less than 10 times forward earnings. On top of that, it now pays a 4.7% dividend yield.

It’s not just Buffett that sees deep value in USB stock today. Morningstar’s Eric Compton agrees that shares are dramatically mispriced. Compton sees USB’s fair value at $59 versus a current price of $41 now. This suggests more than 30% undervaluation today.

On the date of publication, Ian Bezek held a long position in DEO, BRK.B, and V stock. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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