5 Best Warren Buffett Stock Picks for Beginners

2. Visa Inc. (NYSE:V)

Percentage of Warren Buffett’s Stock Portfolio: 0.56%

Number of Hedge Fund Holders: 171

Visa Inc. (NYSE:V) is a California-based payment card services company that enables electronic funds transfers through its branded credit, debit, and prepaid cards.

Visa Inc. (NYSE:V) released its Q4 and FY 2023 earnings report on October 24. In Q4, the company’s revenue was up 10.3% YoY at $8.6 billion and posted a non-GAAP EPS of $2.33, outperforming the estimates by $50 million and $0.09, respectively. Due to the YoY growth in payments volume, Visa Inc. (NYSE:V) generated net revenues of $32.7 billion for FY 23, up 11% from the previous year. The company’s profits also increased in 2023 and it was able to report a non-GAAP net income of $8.77 per share, showing an increase of 17% from the prior year.

Visa Inc. (NYSE:V) has increased its dividend for the past 15 years, including its latest increase on October 24. The company raised its quarterly dividend by 15.6% to $0.52 per share, payable by December 1 to the shareholders of record on November 9. In addition to an increase in its quarterly dividend, Visa Inc. (NYSE:V) authorized a $25 billion multi-year class A common stock share repurchase program.

Visa Inc. (NYSE:V) is one of the best Warren Buffett stock picks for beginners as it is a blue chip stock that Warren Buffett has held since the third quarter of 2011. Chris Hohn’s value-based hedge fund TCI Fund Management has also kept the stock in its portfolio since 2019 and was the most prominent hedge fund holder of the company in Q2 with 17.786 million shares worth over $4.22 billion.

Baron FinTech Fund made the following comment about Visa Inc. (NYSE:V) in its second quarter 2023 investor letter:

“We modestly trimmed Visa Inc. (NYSE:V), Mastercard Incorporated, and Accenture plc to manage the position sizes and raise capital to fund purchases elsewhere. These stocks remain full-sized positions and high-conviction ideas in the Fund.

Another fintech industry trend we’re seeing is a pickup in M&A activity, most notably in the payments sector. The year started with Nuvei’s $1.3 billion acquisition of Paya announced in January. In April, Network International received an initial takeover offer from a group of private equity firms, which was then topped by Brookfield Asset Management whose $2.8 billion offer was accepted by the Board in June. Following reports earlier this year of a bidding war between Visa Inc. and Mastercard Incorporated to acquire cloud-based issuer processor and core banking software provider Pismo, Visa announced its intention to acquire the Brazilian company for $1 billion in late June.”