Warren Buffett may finally be ready to step down as CEO (and resident stock-picking guru) of Berkshire Hathaway. But that doesn't mean you can't still borrow a pick or two from the world's most proven investor. And you arguably should. Here's a rundown of three top picks among Berkshire's current holdings that would be a good fit for most peoples' portfolios.
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Chevron
If the oil and gas business is on its last legs, someone might want to tell it to the industry and its customers. Production as well as consumption of both continue to break new records following 2020's pandemic-prompted lull. Prices are holding pretty steady, too, despite a bit of cyclical weakness in recent months.
Obviously the renewable energy movement isn't as ready to wean the world from fossil fuels as many hoped it might be just a few years back. Indeed, the National Center for Energy Analytics doesn't expect the planet's need for crude to peak until at least 2030, and even then we'll still need plenty of it for at least a few more decades as alternative energy options continue their relatively slow proliferation.
Enter oil giant Chevron(NYSE: CVX). Buffett first established his position in 2020 at the height of the COVID-19 pandemic, and has added to it much more than he's subtracted from it, making it Berkshire's fifth-biggest stock holding currently worth $16 billion.
That doesn't mean it's always been a great performer. The stock has drifted lower since peaking in late 2022, in fact, and is currently knocking on the door of multi-year lows largely thanks to pro-drilling President Donald Trump. (More supply lowers oil and gas prices, which in turn lowers Chevron's net profits.)
Buffett and his lieutenants are thinking much bigger-picture though, and much longer-term. Given the industry's internal dynamics marked by a decreasing amount of proven and readily accessible reserves and persistent operating costs, it takes a major player like Chevron -- the industry's third-biggest, as measured by market capitalization -- to bring enough leverage and scale to the table to make drilling worthwhile.
Buffett is also arguably stoked about the income this ticker's generating in the meantime. Newcomers will be plugging into Chevron stock while its forward-looking dividend yield stands at just under 5%. That yield's also based on a dividend that's not only been paid like clockwork for decades, by the way, but has now been raised for 38 consecutive years.
Kroger
There's no denying Kroger(NYSE: KR) dropped the ball by letting general merchandise retailer Walmart enter the grocery market mostly unchecked back in the 1990s. It also failed to stave off Amazon's foray onto its turf, not just when the e-commerce giant added grocery delivery to its mix of online shopping options, but also when it bolstered its presence in the food space with its 2017 acquisition of Whole Foods.
If you think Kroger has not regrouped and pushing back, though, think again. High-margin private label goods are now a major part of the company's business mix ($32 billion worth of Our Brands sales in 2024, or 22% of total sales), for instance, while Kroger Plus now counters Amazon's and Walmart's continued penetration of the grocery market.
Perhaps the most unexpected aspect of this company's current business, though, is how modern and digital it has quietly become. For example, while Kroger doesn't often offer top-line data, it did confirm in its year-end report that allowing brands to promote their goods on Kroger.com produced an operating profit of $1.35 billion in 2024. That's roughly one-third of last year's total operating profit of $3.85 billion, and it's still early days for a great business that might soon need to offset some of the margin pressure on groceries themselves.
Sure, the company's plans to acquire rival Albertsons recently fell through, and even more recently, Kroger's now-former CEO Rodney McMullen resigned due to "personal conduct" reasons. Although not for reasons related to the company's operation, it's still another disruption that needs to be dealt with now.
Kroger is more of a juggernaut than most investors might realize, though. Between simple price appreciation, regular share repurchases, and the reinvestment of its ever-rising dividend, an investment in Kroger stock has actually outperformed the S&P 500 for the past five-year, 20-year, and 30-year stretches.
Berkshire Hathaway's 50 million share position in Kroger is presently worth $3.6 billion.
BYD
Last but certainly not least, you may want to consider adding one of Berkshire Hathaway's least likely holdings to your portfolio as well. That's BYD(OTC: BYDDY)(OTC: BYDD.F). Never heard of it?
You might actually be more familiar with it than you think. Remember the recent chatter about Tesla being dethroned as the world's biggest seller of electric vehicles (EVs)? The company's recent headwind is largely the result of CEO Elon Musk's affiliation with Trump and serving as the head of DOGE, but it's actually been happening off and on since 2023, prior to Musk's deep involvement with the White House's current administration.
The company behind the stir is China's BYD, which delivered a world-leading 4.27 million hybrids and EVs last year. Its dominance hasn't waned since then. Its dominance won't likely fade anytime soon either, in light of optimistic outlooks for the EV market.
While electric vehicles aren't exactly inspiring most U.S. drivers anymore, that's a fairly localized phenomenon. The rest of the world continues to fall in love with them, so much so that the International Energy Administration believes the number of EVs traveling the planet's road will swell from 2023's count of 45 million to 250 million by 2030 to 525 million by 2035.
BYD stands to remain a leader of this growing market, which is seemingly -- and wisely -- putting its focus everywhere except the anemic U.S. market.
Berkshire's position in BYD isn't huge. Thanks to a bit of selling last year and the year before, in fact, its current stake of 54.2 million shares is only worth $2.7 billion. Don't read too much into the partial exit though. Buffett mostly just didn't want to compete with a then-well-performing Tesla -- a concern that's since been dialed back.
Indeed, the fact that Buffett was ever interested in the first place and is still holding onto a position of any size speaks volumes in favor of buying a stake in BYD now.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, Chevron, Tesla, and Walmart. The Motley Fool recommends BYD Company and Kroger. The Motley Fool has a disclosure policy.
