Warren Buffett’s success as an investor means his portfolio of stocks. Berkshire Hathaway Get a lot of attention. Although you should always make your own buy and sell calls, there are two interesting stocks in Buffett’s investment vehicle to consider today. The list includes Chevron(NYSE: CVX ), coca cola(NYSE: KO )And American Express(NYSE:AXP). Here are which ones are probably worth buying, and which ones you might want to avoid.
Chevron is one of the world’s largest conglomerates Energy companies. This means that the business covers the entire spectrum of the sector, from upstream (oil and natural gas production), to midstream (pipelines) and downstream (chemicals and refining). This gives some balance to the company’s financial results, as each segment of the industry performs slightly differently.
The end result for the energy company Chevron’s peaks and valleys is not as extreme as it would be if they worked only in the upper part. This makes it a strong choice for long-term investors looking to invest in the energy sector.
Helping things is one of the strongest. Remaining papers In the sector, the lowest debt-to-equity ratio of 0.17x.
The real attraction is the current dividend. For starters, the yield is 4.3%. And that yield is supported by dividends that have risen over three decades. That means the average yield in the energy sector is around 3.3%, indicating that Chevron’s lagging stock performance is now showing.
Some are related to purchases that are not intended and do not work. Some are tied to Chevron’s poor business results in the face of weak energy prices. However, if you have a long-term investment horizon, this industry stalwart is probably worth buying today. Harvesting an above-average industrial yield while waiting for better days is not a terrible thing.
Coca-Cola is one of the most famous companies in the world and is often the most expensive stock to buy. But the recent price rebound has brought the shares into attractive territory, assuming you don’t mind paying a reasonable price for a great company.
To provide some numbers, this Dividend King’s dividend yield is around 3.2 percent. This has been roughly middle of the road for the past decade, offering a hint at a reasonable price. Supporting that view are traditional valuation metrics like price-to-sales and price-to-earnings, both of which are slightly below their five-year averages. While it would be unfair to suggest that Coca-Cola is a buzz buy, the price seems reasonable.
But the real story is that they are getting paid for it. Coca-Cola’s business sports strong margins, a healthy balance sheet and a beverage brand portfolio that’s second to none (thanks in large part to its namesake soda). While investors may have some concerns about inflation, new weight-loss drugs, and testing of snack foods, given its long and successful history, Coca-Cola is likely to remain an industry leader. And that means the dividend will continue to be paid and will continue to grow over time – just what a conservative income investor wants to see.
American Express is a payment processor focused on high-end consumers. That’s a strong environment, as affluent clients see the recession in relative stride. Of course, the fees the company collects for processing transactions become more reliable over time.
Overall, American Express is an attractive business. But Benjamin Graham, who helped coach Warren Buffett, says a big company can be a bad investment if you pay too much.
After roughly doubling in value in a year, American Express is looking expensive. The company’s price-to-sales, price-to-earnings, price-to-cash flow and price-to-book value ratios are all above their five-year averages.
If you’re a more active investor concerned about valuation, you might want to take some profit here. It’s understandable for long-term investors to want to stay on top of the underlying business, but new investors should stay on the sidelines until there’s a better entry point.
Even Warren Buffett, the Oracle of Omaha, makes mistakes. So you should take the Berkshire Hathaway portfolio with a grain of salt. You should also remember that Buffet tends to buy and hold, so the things in his portfolio today may not be the things he buys today.
But if you’re looking for some investment ideas, a look at Buffett’s stock list today brings up interesting questions around Chevron, Coca-Cola and American Express. The first two seem like purchases, but the last one seems a bit too expensive now.
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American Express is an advertising partner of Motley Fool Money. Reuben Greg Brewer It has no place in the said shares. He has positions in the Motley Fool and recommends Berkshire Hathaway and Chevron. The Motley Fool has Disclosure Policy.
