10 Best Stocks to Buy According to Billionaire Warren Buffett

7. Moody’s Corp (NYSE:MCO)

Portion of portfolio: 4.37%

Value of holdings: $11,677,932,812

The financial data firm Moody’s Corporation (NYSE:MCO) remains a dominant force in the credit ratings and financial analytics industry offering credit research, credit models, analytics, and economic data as part of its risk management services.

Buffett maintained his ownership stake in one of his top portfolio holdings during the fourth quarter holding 24,669,778 of its shares.

Veteran data provider announced its fourth quarter and full-year 2024 financial results on February 13 revealing a 13% year-over-year increase in revenue for the period, but missing analysts’ estimates by $40.6 million. Fourth-quarter 2024 adjusted earnings totaled $2.62 per share, outpacing the Zacks Consensus Estimate of $2.60. The company is optimistic regarding its future growth relying on innovation and expectations of macroeconomic stability. For the full year, the company saw revenue increase 20% year-over-year.

The strong first-quarter number released last week beat expectations with revenues of $1.9b arriving 2.5% ahead of estimates. Statutory earnings per share (EPS) were $3.46, 6.0% also ahead of forecasts.

The company generates revenue from its two subscription-based services and fees for its ratings and analytics. Moody’s Investors Service (MIS) accounts for 60% of total revenue, being the core provider of profitability, while Moody’s Analytics (MA) division accounts for the remaining 40% of revenue. Over 80% of Moody’s overall revenue is recurring, out of which 57% comes from the United States, 28% from Europe, the Middle East, and Africa (EMEA), 11% from the Asia-Pacific region, and 4% from Latin America.

Even though it faces competitive pressures from S&P Global’s broader service offerings, specialization in credit risk and regulatory compliance is what positions Moody’s as a ‘go-to’ place for financial institutions that are in search of deep expertise in these areas, according to a bullish thesis on Moody’s Corporation (MCO) on Substack by Business Model Mastery.

Citi initiated coverage of Moody’s with a price target of $565 and a Buy rating in December, expressing optimism about the company’s outlook.

Year-to-date the company’s stock has lost 7,13% in its value, trading at $439.63 per share on April 24 at the time of writing.