1 Warren Buffett Stock to Buy Hand Over Fist in July

Warren Buffett has built an incredible track record running Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). And he did it using simple-to-understand logic: Buy well-run companies when they look attractively priced and then hold for the long term (so you can benefit from the growth of the business over time). But even well-run companies fall out of favor, and that’s why this Buffett stock, with a lofty 4.7% dividend yield, is worth buying in July.

Two oil picks with different industry approaches

Energy stocks are currently suffering through a period of volatility thanks to geopolitical tensions. That’s not unusual at all. The energy market is known for being volatile, and so are most stocks in the energy sector. Buffett has two energy investments, Occidental Petroleum (OXY -0.27%) and Chevron (CVX 0.34%). They have materially different industry positions.

Warren Buffett.

Image source: Getty Images.

Oxy, as it is more commonly known, is focused on growing its business as quickly as practicable so it can better compete with established industry giants like, well, Chevron. Chevron, an industry giant, is focused on slow growth and — here’s the key for investors — surviving through the inherent ups and downs of the energy sector. The second bit is why Chevron is so attractive as July gets underway.

There are three parts to Chevron’s story. The one that will likely be most interesting to investors is its reliable dividend. The integrated energy giant has increased its dividend year in and year out for 38 consecutive years. That’s an incredible streak given the price swings that have occurred in oil over that span. The company is, clearly, focused on rewarding investors for sticking around.

The interesting part is that this reliable dividend stock’s dividend yield gets attractive during the tough times. Right now is a tough time thanks to both industry issues and some company-specific problems. History suggests Chevron will muddle through and continue to pay its dividend. In the meantime, investors can collect a hefty 4.7% dividend yield.

What backs Chevron’s lofty yield?

A big yield that gets reliably paid is nice, but it doesn’t fully explain why Buffett has Chevron in Berkshire Hathaway’s portfolio. Which is where the next two parts of the Chevron story come in.

First, Chevron is an integrated energy giant. That means that it has exposure to the entire energy value chain, from producing oil and natural gas, to transporting the commodities, to processing them into other products. Each segment works a little differently through the energy cycle. Having exposure to all of them helps to smooth out performance over time. On top of that diversification, Chevron also has a global portfolio. So it can shift its investments to where they will have the best opportunity for success.

CVX Debt to Equity Ratio Chart

CVX Debt to Equity Ratio data by YCharts

That’s a solid start, but there’s another important factor. Chevron also has one of the strongest balance sheets in the energy patch, with a debt-to-equity ratio of just 0.2 times. That gives management the leeway to add debt during industry downturns so it can continue to support the business and dividend through hard times. When commodity prices recover, as they always have historically, it pays down its debt in preparation for the next downturn.

Buy Chevron when others are selling the stock

Chevron’s stock is down around 20% from its 2022 highs, when oil prices were much higher. Long-term dividend investors shouldn’t get too hung up on the downturn or the reasons why. Chevron is built to survive whatever comes its way. It probably makes more sense to just follow Buffett’s “simple” approach and buy this well-run company while it is attractively priced and then hold it for the long term.

Reuben Gregg Brewer has positions in TotalEnergies. The Motley Fool has positions in and recommends Berkshire Hathaway and Chevron. The Motley Fool recommends BP and Occidental Petroleum. The Motley Fool has a disclosure policy.

Source link

Visited 1 times, 1 visit(s) today

Related Article

Palestinian Hamas terrorists keep guard on the day Hamas handed over deceased hostages in Khan Younis in the southern Gaza Strip February 20, 2025. (credit: REUTERS/Hatem Khaled/File Photo)

Hamas has lost 80% of its control over Gaza Strip

“Let’s be realistic here, there’s barely anything left of the security structure. Most of the leadership, about 95%, are now dead,” the Hamas official told the BBC.” Hamas has reportedly lost about 80% of its control over Gaza, a senior official from the terrorist organization told the BBC in an interview published Sunday. The official

Toyota four-cylinder engine prototypeToyota

Here’s Why Rivals Should Worry

Toyota’s New Engine Family: Here’s Why Rivals Should Worry originally appeared on Autoblog. A new Toyota engine lineup is causing competitors to double-take for more than one reason Many of today’s powertrain developments are in the electric vehicle (EV) realm, but Toyota is expanding the limits of gas-powered engines. The automaker’s next-gen engine lineup includes

Asian Penny Stocks To Monitor In July 2025

As global markets experience varied performances, with the U.S. indices hitting record highs and Japan facing trade negotiation challenges, investors are keenly observing the shifting dynamics in Asia. Amidst these developments, penny stocks—traditionally smaller or newer companies—continue to capture attention for their potential value and growth opportunities. While the term may seem outdated, these stocks

Morning Headlines

Met officer recalls terrifying moment she realised true horror of 7/7 attacks

Get the free Morning Headlines email for news from our reporters across the world Sign up to our free Morning Headlines email Sign up to our free Morning Headlines email A first responder has recounted the chilling moment she grasped the true horror of the 7 July bombings, two decades after the devastating attacks. Superintendent

3 Stocks That Might Be Undervalued In July 2025

As global markets experience mixed performances, with the U.S. indices reaching record highs and Asian markets showing varied results, investors are increasingly turning their attention to potential opportunities in Asia. In this environment, identifying undervalued stocks can be a strategic move for those looking to capitalize on market inefficiencies and economic developments across the region.

Scary crash.IndyCar

Prayers Pouring In After ‘Horrific’ IndyCar Crash Sunday

Prayers Pouring In After ‘Horrific’ IndyCar Crash Sunday originally appeared on The Spun. Prayers are pouring in after a “horrific” IndyCar crash on Sunday morning. The Indy NXT Grand Prix at Mid-Ohio took place on Sunday morning. Unfortunately, it featured one heck of a crash. Two drivers – Sebastian Murray and Ricardo Escotto – were involved in

Protesters, mainly Houthi supporters, rally to show support to Palestinians in the Gaza Strip, amid the Israel-Hamas conflict, in Sanaa, Yemen December 6, 2024. (credit: REUTERS/KHALED ABDULLAH)

First Red Sea naval attack in months raises alarms

The attack on the ship comes as Iranian-backed militias in Iraq are also suspected of numerous drone and missile attacks over the past two weeks. An attack on a vessel in the Red Sea was reported on Sunday, which was the first attack there in months. The Iranian-backed Houthis had carried out dozens of attacks

ATLANTA, GEORGIA - NOVEMBER 03: Jerry Jones, owner of the Dallas Cowboys, looks on prior to the game against the Atlanta Falcons at Mercedes-Benz Stadium on November 03, 2024 in Atlanta, Georgia. (Photo by Kevin C. Cox/Getty Images)Kevin C. Cox/Getty Images

Dallas Cowboys Announce Donation Following Texas Flooding

Yahoo is using AI to generate takeaways from this article. This means the info may not always match what’s in the article. Reporting mistakes helps us improve the experience.Generate Key Takeaways Dallas Cowboys Announce Donation Following Texas Flooding originally appeared on The Spun. The Dallas Cowboys announced on Sunday an official donation following the flash

0
Would love your thoughts, please comment.x
()
x