The 7 Best Warren Buffett Stocks to Buy Now: October 2023
At 93, Warren Buffett is now worth $116.2 billion. That’s because he’s been very careful with what he invests in. He always made sure he understood the nuts and bolts of a company before buying. He also made sure that what he was buying had ignored value, which makes the following Warren Buffett stocks strong buys.
For instance, in 1988, he bought a billion dollars worth of Coca-Cola (NYSE:KO) after the stock market crash of October 1987. He saw consistent performance, good long-term prospects, and a bargain in the stock price after years of disaster. The stock said Buffett just wasn’t reflective of the growth.
Coke became one of the perennial Warren Buffett stocks because was also a company that was easy to understand with predictable and proven earnings and could be bought at a reasonable price.
It’s all part of the reason why his company Berkshire Hathaway has been heavily investing in these seven Warren Buffett stocks. All of which are still worth buying today.
Coca-Cola (KO)
With a yield of about 3.4%, Coca-Cola is still a favorite among Warren Buffett stocks. Not only is KO a Dividend King, but it’s one of the safest stocks on the market with strong, consistent demand, and dependable earnings growth.
For example, in its most recent quarter, the company posted adjusted EPS of 78 cents on sales of $12 billion, beating expectations for EPS of 72 cents on sales of $11.7 billion.
Even better, KO raised its full-year forecast, expecting organic revenue growth of between 8% and 9% for 2023 from 7% to 8%. It also expects to see adjusted EPS growth of between 5% and 6%.
With consistent demand and a history of strong dividend growth, KO is a top Buffett stock to buy and hold for the long haul.
Occidental Petroleum (OXY)
Warren Buffett’s Berkshire Hathaway has been aggressively buying Occidental Petroleum (NYSE:OXY). In fact, they now own about 24% of the stock.
Not only does Buffett like OXY because it’s cheap, but he also likes the company’s growth strategy.
OXY has been increasing efficiency at its current facilities, as noted by the Motley Fool while returning cash to shareholders. It also has a strong history of buybacks. Plus, with oil prices quickly rising on geopolitical and supply issues, OXY should benefit.
Analysts at Roth MKM just raised their price target on OXY to $64 from $60, with geopolitical issues likely to boost oil prices and remove physical barrels from the market.
Susquehanna analysts also raised their price target to $78 from $72, with a positive rating. Technically, OXY has been trading sideways since the year began.
However, if oil prices gush higher, and if OXY can break above resistance around $66.50, it could test $75 shortly.
VanEck Vectors Morningstar Wide MOAT ETF (MOAT)
There’s also the VanEck Vectors Morningstar Wide MOAT ETF (CBOE:MOAT), which is based on Warren Buffett’s “economic MOATS” concept.
In fact, most of the stocks in the MOAT ETF have long-term advantages, including switching costs, intangible assets, network effect, and cost advantages. All of which Buffett looks for when buying stocks with wide moats.
Bank of America (BAC)
Bank of America (NYSE:BAC) has been beaten silly this year. All thanks to the banking crisis that erupted earlier this year, credit rating downgrades, and higher inflation, which dampened consumer borrowing.
However, these headwinds won’t last forever. Plus, while we wait for the BAC stock to recover, we can collect its 24-cent dividend, which is payable on Dec. 29 to shareholders of record as of Dec. 1.
Helping, the company just posted EPS of 90 cents, as compared to expectations for 82 cents. Revenue of $25.32 billion was also better than expectations for $25.14 billion.
Better, BMO Capital just raised its price target on BAC to $40, with a market perform rating.
Apple (AAPL)
At the moment, Apple (NASDAQ:AAPL) makes up about 47.6% of the Berkshire Hathaway portfolio, which means the firm is raking in millions from the tech giant’s 0.55% dividend yield.
Also, aside from being one of the world’s most valuable brands, it’s one of the most innovative companies around. Granted, iPhone sales slipped 2% year over year in the third quarter, but Apple is more than just an iPhone company.
Remember, it’s also expanding into artificial intelligence, virtual and augmented reality, and fintech, and has even pushed into digital services. I’d use the recent weakness in Apple as an opportunity to buy more.
T-Mobile (TMUS)
Warren Buffett owns 5.24 million shares of T-Mobile (NASDAQ:TMUS) and had to be happy when the company declared its first-ever dividend.
In fact, as the company noted on Sept. 25, it’ll pay out a 65-cent dividend to shareholders of record, as of the close of business on Dec. 1. That means he’ll see a payout of about $3.4 million just on that dividend.
Should TMUS maintain that payout, Buffett could see an annualized dividend of $2.60 on his 5.24 million shares.
TMUS also announced a $19 billion shareholder return program that will run through Dec. 2024. Included in the program is the 65-cent dividend.
It also expects to pay around $3 billion in additional dividends in the new year along with share buybacks. Even better, the dividend payout per share is expected to increase by 10% a year.
Lennar Corp. (LEN)
Warren Buffett recently bought shares of homebuilder Lennar Corp. (NYSE:LEN).
In fact, he picked up 152,572 shares of the beaten-down stock, which carries a small yield of 1.43%. Despite rising interest rates, Buffett believes a low inventory of existing homes could benefit builders.
Lennar earnings have also been solid. In its third quarter, it posted EPS of $3.91, which beat by 38 cents. Revenue of $8.73 billion was down about 2.2% year over year, but still beat expectations by $210 million.
As noted by TipRanks.com, the Wells Fargo analyst is “positive on the company’s growth potential, streamlined operations, and a relentless focus on cost containment with balance sheet flexibility. The firm adds that Lennar’s valuation also offers a nice near-term investor incentive.”
On the date of publication, Ian Cooper did not hold (directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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