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3 Warren Buffett Stocks to Buy in June

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Buffett is such a raving fan of Wells Fargo because of the company's lean operation structure. Wells Fargo consistently boasts one of the lowest efficiency ratios among all the big banks, which helps it to earn strong profits while offering competitive rates to its customers. Better still, the company also keeps its trading operation small and has a far lower exposure to derivatives that its peer group, which helps to keep its overall risk profile low.

By running a lean and low-risk operation, Wells Fargo can easily afford to pass on the majority of profits to shareholders. Last quarter alone, the company spent $3 billion on dividends and share repurchases, which represented 60% of its net income.

Right now the company is facing some short-term challenges from losses in the energy sector and persistently low interest rates, both of which I think are temporary headwinds that will work themselves out over time. With its shares trading for about 1.4 times book value and offering up a dividend yield just over 3%, now is a fine time to consider following in Buffett's footsteps by buying a few shares of Wells Fargo

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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