Warren Buffett is without a doubt one of the most successful investors of all time. The “Oracle of Omaha” has delivered year-after-year of outsized returns for long-term investors with Berkshire Hathaway (NYSE:BRKa) (NYSE:BRKb) and its holdings and continues to prove that he has a one-of-a-kind knack for stock picking.
Warren Buffett’s favorite stocks tend to have several qualities that stand out. He looks for companies that have good fundamentals, increasing profit margins, and can provide strong returns over the long-term. Mr. Buffett also loves stocks that pay dividends so that he can reinvest them in his company.
Given the continued economic uncertainty and recent volatility in the market, investors should be very attracted to Warren Buffett’s style of investing at this time. That’s why looking at some of the companies he has selected for Berkshire Hathaway’s holdings is a great idea.
These stocks can be perfect for starting a new investment portfolio, adding to an existing account, or for setting yourself up for retirement.
Let’s take a look at 3 Warren Buffett stocks to buy now.
1. American Express Co
First up is American Express (NYSE:AXP), a financial services company that provides charge and credit card products as well as travel-related services to consumers and businesses all over the world. It’s one of the leading credit card providers in the world and a company with an iconic and instantly recognizable brand.
While American Express is similar to other major providers like Visa (NYSE:V) and Mastercard (NYSE:MA), it’s unique in that it operates a “closed-loop” payment system that involves maintaining direct relationships with card members and merchants. This integrated system allows American Express access to unique consumer data without the backing of large financial institutions.
Warren Buffett sees the competitive advantage in this company’s business model, which is a great reason to consider adding shares. You also have to like the company’s potential as consumer spending returns to normal following the pandemic. Combine that with the potential for travel and entertainment spending to pick up again and American Express is a very attractive recovery play.
The stock offers a 1.11% dividend yield and American Express saw its Q1 net income increase by 508% year-over-year to $2.2 billion, confirming that the company is seeing improvements thanks to the macroeconomic outlook and strong credit performance.
2. Apple
Investors can’t go wrong with adding Apple (NASDAQ:AAPL) to their investment plans, and the stock is even more attractive after the recent selloff following the company’s fantastic Q2 earnings report.
Buffett has been a long-term Apple shareholder and the stock is Berkshire Hathaway’s largest holding by market value. If you aren’t familiar with Apple’s business, it designs, manufactures, and markets mobile communication and media devices, personal computers, and more.
With an array of products that constantly generate strong sales like the iPhone, iPad, Mac, Apple Watch, and more, this company has proved time and time again that it can adapt to new trends and create innovative products that still generate interest among consumers.
Apple reported excellent Q2 earnings that included a March quarter revenue record of $89.6 billion, up 54% year-over-year. Service and Mac revenue also reached a new all-time high for the company in Q2, and Apple's international sales continue to stand out.
While there are some concerns about how the chip shortage will affect Apple in 2021, you can’t argue with this company’s consistently outstanding earnings results and continued leadership in the tech world. Adding shares of this Warren Buffett stock at this time is a no-brainer, particularly since the company just announced a dividend hike and increased its share-buyback program.
3. U.S. Bancorp
Another strong Warren Buffett stock to look at adding at the moment is U.S. Bancorp (NYSE:USB). Given the recent strength in the financial sector and an improving lending environment as the economy rebounds, adding shares of one of the largest diversified financial services firms in the United States could be a great move.
U.S. Bancorp provides a range of financial services like lending and depository services, cash management, capital markets, and trust and investment management services.
It’s a great stock to buy if you are looking for income, as it currently offers a 2.83% dividend yield. Keep in mind that interest rates could increase as the economy gets better, which works directly in this company’s favor.
U.S. Bancorp stock is up over 31% year-to-date and could be a great addition to any investment account, especially if you want to own one of the best regional banks in the country.