Six Bank Stocks in Warren Buffett’s Portfolio

 

People are constantly looking to emulate the Oracle of Omaha, whose immense success has catapulted him to the top five richest men in the world. So, obviously, one of the things that is constantly under scrutiny is Warren Buffett’s portfolio. Although there are dozens of different stocks which fairly frequently change, shrewd investors may learn a bit about how the best do business by studying their moves.

At the time of writing, Buffett currently owns stocks in 6 different banks. Those bank stocks make up a monster portion of his portfolio at around 11% of Buffett’s total market cap. It should be noted, of course, that Buffett does have a warrant to purchase share of Bank of America by 2021. However, at the present he doesn’t own any of the bank’s stocks.

Here are six bank stocks you’ll currently find in Buffett’s portfolio: 

1. Wells Fargo

Wells Fargo makes up the largest portion of Buffett’s bank stocks at $26.8 billion in shares. The bank has been a Buffett favorite for years, and he stuck with the company throughout the recent “fake accounts” scandal which was recently settled. Despite the recent downturn, the company has beat the returns of other banks consistently in the last 10 years, making it a solid choice for Buffett.

2. American Express

American Express engages in enough bank-like activities to make this list, and Buffett has long been a fan. In fact, he owns around $11.9 billion in shares and of his five largest stocks, it is the only one Buffett has never sold. At last estimate, Berkshire owns around 16% of American Express, and Buffett is a huge fan of the company’s large moat and closed-loop payment network.

3. U.S. Bancorp

Although U.S. Bancorp is one of the most expensive stocks on this list, trading at around 2.1 times its book value, Buffett considers it a good value and owns around $4.5 billion in shares. This stock is a great example of Buffett’s preference for buying great companies at fair prices, and U.S. Bancorp is one of the most efficient and profitable banks in the industry.

4. Goldman Sachs

Berkshire Hathaway’s relationship with Goldman Sachs began during the recession, when Buffett bailed out the company in exchange for warrants to purchase stock. Although Berkshire redeemed those warrants in 2011, the company has already sold around three fourths of the shares it purchased. Berkshire currently has around $2.5 billion tied up in Goldman Sachs shares.

5. Bank of New York Mellon

The Bank of New York Mellon is America’s oldest continuously operating bank and it has a strong balance sheet. Although it is one of Buffett’s smaller investments, the bank has consistently performed well over the years. In fact, Buffett likes it so much he actually increased his stake in the bank by 3.6% in 2016, resulting in a $1 billion investment in the bank.

6. M&T Bank

Berkshire has held shares in this regional bank for nearly two decades. Its investment currently totals to around $834 million. The bank itself is highly profitable compared to its peers and Buffett has spoken several times about his respect for the bank’s management team.

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