These 3 ASX 200 shares look like classic Warren Buffett investments

Oracle of Omaha Warren Buffett is one of the world’s greatest investors.

His basic investing concepts include a long-term, value-focused approach to investing, and he has decades of experience identifying high-quality businesses and holding them over the long term.

His investing wisdom boils down to a few key philosophies: rational decision-making, patience, and focus on high-quality businesses.

With that in mind, there are three ASX 200 stocks that I think look like something Warren Buffett would invest in.

Wesfarmers Ltd (ASX: WES)

Warren Buffett famously prioritises good-quality businesses. He always looks for companies with a strong history, trustworthy management, and reliable long-term profit growth. 

Australian conglomerate, Wesfarmers, embodies all three of these key traits. 

The company is well-established and financially sound with a history of reliable growth and stability. 

The retail giant also has a huge and highly diversified exposure across multiple industries and sectors. It owns and operates major everyday brands including Bunnings, Kmart, Target, and Officeworks. It also has operations across health and wellbeing, industrials, chemicals, energy, and even more.

Not only that, but it continually focuses on expanding its markets, product categories and digital capabilities to drive long-term growth. 

It’s this stability and consistent long-term net profit growth that make Wesfarmers stand out amongst other ASX blue-chip shares. 

Transurban Group Ltd (ASX: TCL)

One of the key qualities Warren Buffett looks for in an investment is a strong competitive moat.

Major toll-road operators, like Transurban, are a great example of businesses with deep structural advantages that help protect their long-term profitability.

Transurban shares are classically defensive because its services are essential. The company builds and operates major urban toll road networks, tunnels, and bridges and operates 22 assets across Australia, the US, and Canada.

Even in the event of a downturn, people still need to travel to work or transport goods and services. Transurban’s toll roads typically have stable traffic volumes year-round, which means the business enjoys resilient cash flow regardless of whether the economy is booming or slowing.

Transurban’s tolls generally increase according to inflation or its long-term agreements. That means Transurban can increase revenue over time without necessarily needing to win more customers.

Transurban owns an asset that can raise prices while customers continue using it. That’s a very attractive trait for investors like Warren Buffett.

Washington H Soul Pattinson and Co Ltd (ASX: SOL)

Soul Patts is another ASX 200 share which fits perfectly into the Warren Buffett style of investing. 

In fact, the Australian diversified investment house is often compared to Warren Buffett’s Berkshire Hathaway because it invests in a broad portfolio of assets. These range from ASX-listed companies, to private credit, to real estate, and others.

It is widely regarded as Australian dividend royalty and it’s also one of the few ASX shares that have continually raised its dividend payments over the past 28 years.

Soul Patts is heavily value-orientated. The company explicitly targets businesses capable of long-term compounding. It also focuses on investments where the price paid is justified by the company’s underlying quality, cash flows and long-term prospects. That’s a classic Warren Buffett strategy. 

The post These 3 ASX 200 shares look like classic Warren Buffett investments appeared first on The Motley Fool Australia.

More reading

• How to find ASX shares that Warren Buffett might buy
• Here’s what brokers tip for Wesfarmers shares over the next 12 months
• Reporting season half-time report: 5 lessons from August so far
• How to build a strong ASX retirement portfolio with 10 shares
• Which is the best Vanguard ETF? VAS, VGS and VDHG compared

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Transurban Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.