3 Buffett stocks that beat the market this year - will they repeat their success?

Warren Buffett is known for his brilliant investment approach, and his company Berkshire Hathaway has once again outperformed the S&P 500 index. Although Berkshire's stock growth this year is slightly higher than the index, some dividend stocks in his portfolio are experiencing significant growth.

We take a look at three of them that beat the market in 2024. Can they repeat that success in 2025?

American Express $AXP

Buffett has owned American Express (AmEx) stock for decades, a clear indication of his confidence in the company. AmEx is the second-largest position in Berkshire's portfolio and has seen an incredible 58% growth this year.

Although the dividend, with a yield of just 0.96%, isn't staggering, the company's record results make up for that shortfall. AmEx has posted ten consecutive quarters of record revenues, while managing to attract new clients and retain existing ones.

While analysts don't expect AmEx to maintain this year's pace, with a relatively low price-to-earnings ratio of under 19, the stock is still attractive. In addition, plans to introduce new products, such as the U.S. Consumer Gold Card, and potential economic changes could bring AmEx further growth.

Citigroup $C

Citigroup has literally shined in 2024 - its stock is up 30%. The financial giant offers an attractive dividend yield of 3.27%, which appeals to income-focused investors.

The key to Citigroup's success has been its low valuation. Even after this year's growth, the stock is trading at 9.2 times expected earnings and just 67% of its book value. This makes Citigroup look like a good investment with further growth potential, at least according to analysts.

Analysts estimate that the stock has room to grow another 17% over the next 12 months. If the company can continue its current pace, it is likely to outperform the market again in 2025.

Capital One Financial $COF

Another financial stock that has excelled this year is Capital One Financial with a gain of nearly 35%. Although its dividend yield of 1.37% is not significantly higher than the S&P 500, the company has the potential to beat expectations.

A key event that could impact performance in 2025 is the planned acquisition of Discover Financial Services. Capital One has already received regulatory approval in Delaware and expects to complete the transaction in early 2025. If all goes well, this acquisition could support further stock growth.

Disclaimer: There is a lot of inspiration to be found on Bulios, but stock selection and portfolio construction is up to you, so always conduct a thorough analysis of your own.

Source: TheMotleyFool