If you're looking for investment ideas, what better place to start than with Warren Buffett, one of the most famous investors of modern times? Nicknamed the Oracle of Omaha due to the success of his investments over time, the CEO of Berkshire Hathaway currently has investments in Chevron (NYSE: CVX), Visa (NYSE:V)And Coca-Cola (NYSE:KO). All three are worth looking at in December.
Chevron is an integrated energy giant with operations across the industry, from upstream (power generation), through midstream (pipelines) and downstream (chemicals and refining). This diversification helps smooth out the ups and downs inherent in this highly volatile, commodity-driven sector.
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Additionally, Chevron has long strived to have a strong balance sheet, with a current debt-to-equity ratio of around 0.17 times. This is one of the lowest debt levels among the company's closest peer group.
Simply put, Chevron is ready for the next oil downturn. When the time comes, the company will go into debt, relying on its balance sheet so that it can continue to finance its activities while supporting its dividend. As the energy sector recovers, it will reduce its debt.
It's the game plan that management has used for years and how the company has racked up more than three decades of annual dividend increases despite operating in a highly volatile industry. With an attractive dividend yield of around 4% today, Chevron is a great addition for dividend investors looking to add some energy exposure to their portfolio.
Visa is one of the largest payment processing companies in the world. It has long benefited from the transition from cash to card payments. The increase in online shopping, where cash is not even a choice, has contributed to this.
Although Visa only charges a small fee for each transaction, it processed more than 233.8 billion transactions in fiscal year 2024. These small fees add up to big numbers, and they're growing, with transactions processed up 10% year-over-year in fiscal 2024. It seems very likely that the upward trend will continue.
What's interesting is that Wall Street has pushed Visa's stock price to all-time highs. But, at the same time, its price-to-sales ratio and its price-to-earnings ratio are both close to their five-year averages.
The dividend yield, while minimal at 0.75%, is actually quite attractive for Visa, from a historical perspective. In other words, this well-positioned growth stock appears to be reasonably priced. This is worth your attention right now if you're focused on growth, knowing that Buffett's approach is all about paying a fair price for big companies.
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