Personal Finance
PSX

3 Warren Buffett Stocks to Buy in June

WFC Chart
WFC Chart

WFC data by YCharts

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

A secret billion-dollar stock opportunity

The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .

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.

In This Story

PSX IBM WFC

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More