When it comes to investing, few sources can match the track record of Warren Buffett. The CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has consistently outpaced the S&P 500 over nearly 60 years, boasting an impressive compounded annual return of approximately 20%. This figure is a staggering double the performance of the S&P 500.
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Buffett’s Bank of America Endorsement
Bank of America (NYSE: BAC) has received Buffett’s endorsement as a formidable pick for 2024. This bank is not only Buffett’s preferred banking stock but also happens to be Berkshire’s second-largest holding, following Apple. Buffett has lauded the bank’s CEO, Brian Moynihan, on multiple occasions, expressing his strong support for Moynihan’s leadership. Berkshire Hathaway’s investment history in the financial sector aligns with Buffett’s expertise, which places significant emphasis on competent bank management. Moynihan’s management has successfully steered Bank of America through the aftermath of the financial crisis, rebuilding its market standing and reputation.
In its third quarter, Bank of America showcased a 10% rise in net income, amounting to $7.8 billion, along with a 3% increase in revenue, reaching $25.2 billion. The strong profit growth can be attributed to a lower tax rate as well as impressive performance by the bank, despite prevalent economic challenges. Bank of America continues to exhibit resilience, with ample prospects for dividend growth—currently, the stock yields 2.9%. With the economy’s shift towards recovery and the stock’s compelling valuation, Bank of America appears primed for favorable performance in the upcoming year.
D.R. Horton in the Spotlight
Another stock that stands to benefit from the anticipated economic recovery in 2024 is D.R. Horton (NYSE: DHI), the largest U.S. homebuilder. As one of the three homebuilder stocks acquired by Berkshire in the second quarter of 2023, D.R. Horton’s stock presents a well-positioned investment opportunity. The company’s financial outlook remains promising, leveraging the sustained potential of the housing market, which has struggled due to limited available inventory.