As electric vehicle demand increases, Warren Buffett bought shares of oil.
Warren Buffett just disclosed he bought shares of Chevron oil (stock ticker CVX) and as the eighth richest person in the world, he must know something that you don’t know. As a wealthy investor, Buffett doesn’t make moves to decrease his wealth, he actually does the opposite.
As the state of Texas suffered days of no electricity, Warren Buffett released his latest investments. Some of his moves may not seem normal, but if his moves were normal, then he probably wouldn’t be a billionaire.
Buffett purchased $4.1 billion of Chevron, the second-largest oil company in the United States after Exxon Mobil. The two companies have traded places consistently on who is number one.
With the industry evolving as more people are going to solar and wind, oil still plays a part in the world. The oil industry suffered a loss in 2020 as fewer people traveled and spent more time at home due to the coronavirus.
Even with the stay-at-home order, natural gas-powered vehicles totaled around 175,000 vehicles in the United States and 23 million worldwide.
As for electric-powered cars, there are approximately 1.4 million electric-powered cars. More electric-powered cars will likely increase but gas vehicles are still the main choice of consumers.
People will talk about how gas is dying but the numbers don’t reflect that. It is likely that Warren Buffett did his homework to see that gas is not disappearing as fast as many people think. Oil companies are adapting to change and will most likely reinvent themself to avoid declaring bankruptcy.
Last year when the market crashed in March, I bought more shares of an investment in a fuel and oil stock, Sunoco LP (SUN). The stock has returned about 27% from a year ago.
Sometimes going against the odds works in your favor. When people were running away from oil stocks, I did the opposite and made a small investment. I didn’t feel the rush to energy-efficient vehicles was going to take over immediately.
Energy stocks to consider
US News highlighted the 7 best energy stocks for 2021. Oil prices reached $65 a barrel for the first time in 12 months. The share of renewables in the electricity generation will increase from 21% to 50% over the next 30 years. Solar and wind make up most of the growth.
Chevron provides a 5.3% dividend yield paid out quarterly in the months of March, June, September, and December. This is the 10th largest holding in Warren Buffet's Berkshire Hathaway. Chevron Corp. is based in San Romon, California.
Suncor Energy provides a 3.48% dividend yield paid out quarterly in the months of March, June, September, and December. This the smallest holding in Warren Buffet's Berkshire Hathaway. Suncor Energy is based in Alberta, Canada.
Magellan Midstream Partners provides nearly a 10% dividend yield paid out quarterly in the months of February, May, August, and November. Magellan Midstream Partners is based in Tulsa, Oklahoma.
Enterprise Products Partners provides an 8.35% dividend yield paid out quarterly in the months of February, May, August, and November. Enterprise Production Partner is based in Houston, Texas.
Cheniere Energy does not provide a dividend yield. The Houston-based company operates facilities that provide liquefy U.S. produced natural gas loaded onto ships and transported worldwide.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.