After the stronger than expected jobs report, the next big data point will come on Thursday when the consumer price index figures for September are released. While inflation likely has peaked, the number will come in way above the Federal Reserve’s 2% target rate. That, added to the start of the third-quarter earnings reporting season, could stir up the volatility cauldron, and for shell-shocked investors the best move may be to the safest Warren Buffett stocks.
[in-text-ad]
If any investor has stood the test of time, it is Warren Buffett. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world. His annual Berkshire Hathaway shareholders meeting draws literally thousands of loyal fans who are investors. Known for his long buy-and-hold strategies and his massive portfolio of public and private holdings, he remains one of the preeminent investors in the world.

The Federal Reserve has stated its intent to have the funds rate up to 4.40% to 4.60% by the end of the year. That implies yet another 75-basis-point increase in November and a 50-basis-point raise in December. That does not bode well for stocks, so now it makes sense to raise as much cash as possible. For those looking to add new positions now, we found seven Warren Buffett favorites that can weather what looks to be an impending storm for stocks.

While all these top stocks are Buy rated across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

American Express

This stock has backed up recently and is offering the best entry point since late last year, despite posting solid second-quarter results. American Express Co. (NYSE: AXP) provides charge and credit payment card products and travel-related services worldwide. Its products and services include payment and financing products network services accounts payable expense management products and services, and travel and lifestyle services.

The company’s products and services also comprise merchant acquisition and processing, servicing and settlement, point-of-sale marketing and information products and services for merchants, and fraud prevention services, as well as the design and operation of customer loyalty programs. It sells its products and services to consumers, small businesses, midsized companies and large corporations through mobile and online applications, third-party vendors and business partners, direct mail, telephone, in-house sales teams and direct response advertising.

Shareholders receive a 1.50% yield. Wells Fargo has a $180 price target on American Express stock. The consensus target is $175.92, and shares closed on Friday at $139.00.

The company posted very solid second-quarter results, and Buffett owns a stunning 1.1 billion of its shares. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, corporations and governments in the United States and internationally. It operates 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms.
[in-text-ad]
Bank of America has expanded into several new U.S. markets, with scale across the country positioning it ideally to benefit from accelerating loan growth over the next two years. Moreover, unlike smaller peers, scale allows the bank to increase investment substantially over the next few years without notably jeopardizing returns, driving further market share gains.

Investors receive a 2.86% dividend. The Barclays target price is $51, while the consensus target on Bank of America stock is $42.41. The shares were last seen on Friday trading at $30.75.

Chevron

This integrated giant posted huge second-quarter results and remains a safer way for investors looking to get positioned in the energy sector. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide.

The Upstream segment is involved in the exploration, development, production and transportation of crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas (LNG); transportation of crude oil through pipelines; and transportation, storage and marketing of natural gas, as well as operating a gas-to-liquids plant.

The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products and lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It is also involved in cash management and debt financing activities, insurance operations, real estate activities and technology businesses.

Chevron stock comes with a 3.55% dividend. The $202 Credit Suisse target price is well above the $178.21 consensus target and the most recent close at $160.03 a share.

This remains a top Buffet holding, as he owns a massive 400 million shares. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It has an incredibly strong worldwide brand, with 40% overseas sales.
[in-text-ad]
The company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.

Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.

Investors receive a 3.23% dividend. Truist Financial has a Buy rating and a $75 target price. The Wall Street consensus price objective for the stock is set at $68.43. Coca-Cola stock closed at $54.51 on Friday.

Diageo

One of the largest producers of alcoholic beverages in the world, Diageo PLC (NYSE: DEO) produces, markets and sells alcoholic beverages worldwide, including scotch whiskey, gin, vodka, rum, beer, Irish cream liqueurs, wine, Raki, tequila, Canadian and American whiskey, Cachaça and brandy, as well as adult beverages and ready to drink products. The company’s premium brands include Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray and Guinness.

Its reserve brands include Johnnie Walker Blue Label, Johnnie Walker Green Label, Johnnie Walker Gold Label 18-year-old, Johnnie Walker Gold Label Reserve, Johnnie Walker Platinum Label 18-year-old, John Walker & Sons Collection, Johnnie Walker The Gold Route, Johnnie Walker The Royal Route and other Johnnie Walker super-premium brands, as well as The Singleton, Cardhu, Talisker, Lagavulin and other malt brands.

Shareholders receive a 2.28% dividend. Diageo stock has a $201 price target at BofA Securities. The consensus target is up at $210.05, and Friday’s final trade was for $167.30 a share.

Mondelez

This consumer sector giant makes good sense for conservative investors. Mondelez International Inc. (NASDAQ: MDLZ) manufactures and markets snack food and beverage products worldwide. It offers biscuits, including cookies, crackers and salted snacks; chocolates, and gums and candies; powdered beverages and coffee; and cheese and grocery products.
The primary Mondelez brand portfolio includes LU, Nabisco and Oreo biscuits; Cadbury, Cadbury Dairy Milk and Milka chocolates; Trident gum; Jacobs Kaffee; and Tang powdered beverages.
[in-text-ad]
Mondelez sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and other retail food outlets through direct store delivery, company-owned and satellite warehouses, distribution centers and other facilities, as well as through independent sales offices and agents.

The dividend yield here is 2.79%. The Bernstein analysts have set a $79 price target. The consensus target is $72.63, and Mondelez International stock closed on Friday at $55.26.

Procter & Gamble

The company offers a very solid dividend as well as a host of recognizable products. Procter & Gamble Co. (NYSE: PG) is one of the world’s largest consumer products companies and one of the oldest in the Fortune 500. Its many brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn.

The company sells its products through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, baby stores, specialty beauty stores, high-frequency stores and pharmacies. The company has been very innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends.

Procter & Gamble stock investors receive a 2.94% dividend. Morgan Stanley’s price objective is $160. The $153.51 consensus also compares with Friday’s close at $124.27.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

For worried investors, these seven top Buffett holdings, while not invincible, surely will hold up better for the rest of 2022 and into next year than technology and some other more volatile sectors. The fact is the stock market has some big downside potential from here. playing it safe just makes sense until the Federal Reserve is done raising interest rates, which may not be until the first quarter of 2023.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.