Warren Buffett’s Top Stock Picks for Stable Returns

Known as the "Oracle of Omaha," Warren Buffett leads Berkshire Hathaway with a philosophy rooted in compound investing.

His stock picks emphasize dividend-paying companies, appealing to both novice and seasoned investors alike. Here are three companies, that you should consider:

American Express, despite being Berkshire Hathaway’s third-largest holding, is often overlooked as a Buffett favorite. Holding 151.6 million shares for decades, the company excels as a rewards program manager. Its cards offer incentives for dining, ride-hailing services, and hotel stays, surpassing competitors like Visa and Mastercard (also held by Berkshire).

Despite economic challenges, American Express has shown robust growth, with a 25.09% increase year-to-date and a remarkable 37.23% surge over the past 12 months. Although its 1.2% dividend yield may not dazzle, the company boasts steady dividend growth, raising its payout from $0.07 to $0.70 per share over three decades.

READ MORE:

Jerome Powell Speaks Again on Rate Cuts

VeriSign, another Buffett pick, manages website name registrations, a vital but less visible role in the internet infrastructure. While not a high-growth sector, VeriSign’s stable revenue and profit margins make it a reliable investment. Unlike many Buffett picks, VeriSign doesn’t pay dividends but instead enhances shareholder value through aggressive share buybacks, leading to substantial stock gains over the years.

Chevron, a $19 billion stake in Berkshire’s portfolio, reflects Buffett’s pragmatic approach to energy stocks. Despite renewable energy advancements, Buffett remains optimistic about Chevron’s prospects, supported by projections of continued global crude oil demand. Chevron’s stock has risen 2.81% in 2024 amid geopolitical tensions and lower OPEC output, offering investors a robust dividend yield of 4.2%.

These picks illustrate Buffett’s strategy of diversification across sectors, providing a solid entry point into his renowned investment philosophy

Alexander Stefanov