SKY PLC, Vodafone Group plc & ITV plc Have The Traits Of A Warren Buffett Investment

Invest like Warren Buffett with SKY PLC (LON: SKY), Vodafone Group plc (LON: VOD) and ITV plc (LON: ITV).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Warren Buffett is undoubtedly one of the world’s greatest investors and he didn’t get where he is today by making bets on the success of highly speculative mining companies.

Buffett only invests in the best companies, which have wide moats, a reliable income stream, intelligent management and a history of success. A strong brand is also important to Buffett, as without that, the company in question will struggle to rise above the competition. 

Finding Buffett-esque companies is difficult and requires plenty of research. There are a few businesses that meet all of his criteria. Vodafone (LSE: VOD) is one such company.

Should you invest £1,000 in ITV right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if ITV made the list?

See the 6 stocks

Reliable income 

Vodafone has a huge moat in its European, South African and Indian telecoms network. It would cost tens or possibly even hundreds of billions of pounds to replicate the company’s existing infrastructure. Additionally, it’s a strong brand that’s internationally recognised. That being said, Vodafone’s market share is under attack in some regions, and while the company is now fighting back, the outlook is no longer as bright as it once was.

Still, Vodafone’s wide moat means that the company is a perfect income investment, the sort of investment that Warren Buffett might buy. The company’s shares currently support a dividend yield of 5.3%, and the payout is expected to rise in line with inflation for the next few years.

Prized assets 

ITV (LSE: ITV) is a company that could fit quite comfortably into Warren Buffett’s equity portfolio. ITV has a leading market share in the UK’s television market. What’s more, the company is branching out into online content and has built a vast content library, which can be sold to various other networks around the world. This library is one of ITV’s most prized assets and should continue to generate a steady income stream for the company going forward.

ITV’s growth since 2011 has been nothing short of outstanding. If the company meets City forecasts for growth for the next two years, by the end of 2017 ITV’s pre-tax profit will have tripled in seven years. Off the back of this growth, the company’s shares have gained around 200% since the beginning of 2011 and ITV continues to return excess cash to shareholders via special dividends. The company’s shares currently trade at a forward P/E of 13.3 and support a regular dividend yield of 3.1%.

Growth in a competitive market 

Sky (LSE: SKY) is one of the most recognisable brands in the UK and Europe. The company has shown its resilience and strong relationship with customers over the past few years as competitors such as NetflixAmazon, BT and other content streaming providers have all started to nibble away at the company’s market share.

However, despite this competition, Sky’s pre-tax profits are up around 50% since 2011 and City analysts are forecasting a further 11% growth in EPS this year. Sky’s shares currently trade at a forward P/E of 16.2 and support a dividend yield of 3.4%.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended Sky. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

2 FTSE 100 and FTSE 250 stocks to consider as stock markets plummet!

Looking for lifeboats as growth-crushing trade tariffs loom? Here are two (including a FTSE 100 gold stock) I think merit…

Read more »

Number three written on white chat bubble on blue background
Investing Articles

Just released: the 3 best growth-focused stocks to consider buying in April [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Happy young plus size woman sitting at kitchen table and watching tv series on tablet computer
Investing Articles

£10,000 invested in Watches of Switzerland shares 1 year ago is now worth…

Watches of Switzerland shares have been decimated by Trump’s tariffs on Switzerland. Dr James Fox explores whether this is an…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

Growth stocks are crashing! Here’s what I’m doing now

Our writer shares his thoughts as growth stocks get crushed, as well as a favourite from the Nasdaq that he…

Read more »

Investing Articles

What’s going on with the Nvidia share price now?

The Nvidia share price is tanking. Once the most valuable listed company, Nvidia has seen more than $1trn wiped off…

Read more »

Investing Articles

This FTSE AIM stock has £2.3bn in net cash, and a market cap of £2.4bn!

I love this FTSE AIM stock, but it really hasn’t delivered for me yet. The stock trades with crazily low…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

Down 15% in a week! Are these 5 FTSE 100 fallers screaming buys as markets plunge?

Five of Harvey Jones's favourite FTSE 100 stocks all have the same thing in common – they've fallen around 15%…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

2 stocks that have been crushed and now offer a ton of value

Edward Sheldon has been scanning the market for stocks that offer value after the sell-off. Here are two shares he…

Read more »