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 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 entire world.
Even though the Federal Reserve has been raising interest rates at a breakneck pace for the past year, yields for the 10-year note and the benchmark 30-year bond are back to levels seen in early September, with only the short end of the Treasury curve above the 4% level. The reason for the safe-haven buying is simple: investors are worried. With massive layoffs, mega-cap companies missing earnings expectations, inflation (while cooling) still at the highest levels in years, and a geopolitical nightmare potentially brewing in the Russian-Ukraine war, now is the time for investors to play it safe.
We screened the Berkshire Hathaway portfolio looking for safe stocks that pay dependable dividends and are rated Buy across Wall Street. The following five look like good ideas for conservative investors worried about a continuation of the bear market and the potential for a recession. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Citigroup
This top bank has rallied nicely off the lows, and Warren Buffett bought a massive $2.5 billion worth of shares last summer. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations and governments a broad range of financial products and services.
It offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. It operates and does business in more than 160 countries and jurisdictions in North America, Latin America, Asia and elsewhere.
Trading at a still very cheap 7.0 times estimated 2023 earnings, this one looks very reasonable in what remains a volatile stock market, and in a sector that has dramatically lagged. With multiple income sources at the bank still solid, this is perhaps one of best buys in the sector.
Shareholders receive a 3.92% dividend. Oppenheimer’s $83 price target is a Wall Street high. The consensus target is $57.80, and Citigroup stock closed on Wednesday at $51.90 a share.
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