3 Top Warren Buffett Stocks Worth Considering Now

Warren Buffett is widely regarded as one of the most successful investors of all time. His company, Berkshire Hathaway (BRK.A) (BRK.B), has had impressive performance, surpassing the S&P 500 by more than 931% since 1998. Buffett's investment strategies emphasize high-quality and valuable companies. Here are three stocks from the Berkshire Hathaway portfolio that are strong long-term options for investors.

Vanguard S&P 500 ETF

One of the simplest and most effective investment strategies is to include an S&P 500-focused index fund in your portfolio. The Vanguard S&P 500 ETF (VOO) serves this purpose effectively. This exchange-traded fund (ETF) tracks the performance of the S&P 500, which consists of large-cap stocks in the U.S. market.

By investing in this ETF, investors have seen their share price nearly double over the past five years. It represents a straightforward investment approach that many hedge fund managers fail to outperform. For any investor, having an ETF like this in their portfolio is a wise choice.

Moody's

My analysis of Moody's Corp (MCO) is straightforward. The demand for bond credit ratings is unlikely to diminish, and Moody's is a leader in this sector. Over the last five years, it has outperformed the S&P 500 by 22%, showing resilience over the long term. Moody's has had a strong performance in 2024, reporting a 22% increase in revenue year over year and a 32% rise in diluted earnings per share through the third quarter.

For the full year, Moody's expects diluted earnings between $10.85 to $11.05 per share. Even though the stock appears a bit expensive at over 40 times forward earnings, its reliability and integral role in the market make it an attractive investment.

American Express

American Express (AXP) focuses on credit services for higher-income consumers. This niche positioning ensures the company's growth continues, even during challenging economic times.

I find American Express appealing due to its robust annual growth rates and positive guidance for 2024. While its performance may not be as volatile as that of companies like Nvidia, it has outperformed the S&P 500 by nearly 28% over the past five years.

American Express has showcased three consecutive years of double-digit revenue growth, and this momentum has carried into 2024. The firm recently reported record revenue of $16.6 billion in its third-quarter results, representing an 8% year-over-year increase. The company has raised its full-year guidance for earnings per share to between $13.75 to $14.05, which is up from earlier estimates of $13.30 to $13.80. This outlook suggests a forward price-to-earnings ratio of just below 20, slightly above its five-year average.

In summary, American Express is a long-term holding to consider. The continued use of credit suggests that companies like American Express are well-positioned for the future, which likely explains why Berkshire Hathaway has invested over $40 billion in the company.

Investing, Stocks, Buffett