You don't need billions to invest like Warren Buffett. Decades ago, the Oracle of Omaha invested a small amount. Buffett's Berkshire Hathaway top stocks can be bought for a few hundred dollars. Here are my three favorite Buffett stocks to buy with $300 right now (arranged alphabetically).
1. Chevron Berkshire's newest 13-F filing shows Buffett bought only three equities in the fourth quarter of 2023, including Chevron (NYSE: CVX). The oil and gas giant is Berkshire's fifth-largest holding. At present prices, one Chevron share costs less than $160. Investing it would be wise.
A forward price-to-earnings ratio of 12x makes Chevron attractive. The corporation pays almost 4.2% dividends. It has raised dividends for 37 years. Most importantly, Chevron's growth prospects are good. Oil prices will undoubtedly climb in the next years. Oil prices affect the company's share price. Carbon capture could potentially benefit Chevron if it works.
2. Lennar NYSE: LEN is one of Buffett's smallest holdings. Berkshire's investment in the homebuilder is worth less than $23 million—pennies for the conglomerate. I think investors should consider Lennar now. It's cheap in several ways. Two Lennar shares could cost $300, depending on their pricing. The stock's 11.6x forward earnings multiple is low.
Lennar capitalizes on the U.S. housing crisis. In 2023, Realtor.com found a growing discrepancy between housing starts and household formations. Lennar, one of the major homebuilders, will gain if this housing gap narrows.
This stock may have a catalyst soon. The Federal Reserve suggested three interest-rate decreases in 2024 earlier this month. Lower interest rates should lower mortgage rates and increase housing starts, which is good for Lennar.
3. Occidental Petroleum Buffett acquired which stock most aggressively in recent years? Occidental Petroleum (NYSE: OXY) is another answer besides Berkshire Hathaway. Berkshire's sixth-largest holding is this oil corporation, one behind Chevron.
Occidental is the cheapest of these three equities at $65. Shares are priced at 17.5 times anticipated earnings, which is fair. CEO Vicki Hollub forecasts a 2025 oil shortage. The company's stock should rise soon if she's right. I'm not as sure as she is about the timing, but continuous demand without adequate fresh supply will likely raise prices.
Occidental is banking big on direct air capture, which pulls carbon dioxide from the air. I'm cautiously enthusiastic about the company's technical potential, like Buffett.
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