Warren Buffett's holding company, Berkshire Hathaway, has done very well over the decades, posting average annual returns in excess of 20%. Much of this performance was generated from Berkshire's publicly traded portfolio. And thanks to disclosure rules, we can dig into the regulatory filings and see which stocks Buffett likes best.

Right now, more than 10% of this portfolio is invested in just two stocks. And following the recent market correction, it looks like a great time to be buying.

Warren Buffett loves these 2 stocks

Two stocks that have been in Buffett's portfolio for years are Chevron (CVX 0.65%) and Occidental Petroleum (OXY 1.82%). Together, they represent roughly 11% of Berkshire's publicly traded portfolio, with a combined value of around $24 billion.

They are the fifth and sixth largest positions, respectively, for Berkshire. Suffice to say that Buffett is very bullish on both companies.

What does he love so much about Chevron and Occidental Petroleum? With the S&P 500 overall trading between 25 and 30 times earnings, both companies are arguably overlooked in today's environment. Shares of both trade under 15 times trailing earnings, and below 14 times forward earnings, suggesting that analysts believe more profit lies ahead.

The dividend yield for the S&P 500, meanwhile, has fallen to just 1.27%. Occidental's yield is roughly double that at 2.47%, while Chevron's yield has risen to nearly 5%. Both companies also have a strong history of share buybacks.

In summary, both represent out-of-favor businesses with cheap valuations and strong dividends, all with positive profit growth anticipated for the year ahead.

Should you follow Buffett into these two portfolio mainstays? Before you jump in, there's one factor you should understand.

CVX PE Ratio data by YCharts; PE = price to earnings.

Should you buy Chevron or Occidental Petroleum shares?

Chevron and Occidental are not interchangeable businesses. The former is one of the largest integrated oil and gas companies in the world, meaning that it not only produces the raw material in its upstream divisions, but also plays a role in transporting, refining, and selling the final product.

The latter company, Occidental, meanwhile, is more focused on upstream production, making it more sensitive to changes in commodity prices.

When oil prices plunge, for instance, Chevron can lean on higher refining margins or profits from its chemicals business to shoulder the load. In this scenario, Occidental is much more exposed without as much segment diversification. But when oil prices rise sharply, Occidental -- at least on paper -- has significantly more upside potential given its more direct exposure to volatile commodity prices.

But make no mistake: Both companies will need rising oil prices to be attractive long-term investments. Over the past 12 months, oil has fallen by nearly 30% to just $60 per barrel. And investment banks like Goldman Sachs are now calling on prices to remain low through at least 2026.

Of course, conditions can improve as quickly as they have declined. And buying when expectations are low is often a great way to profit as a contrarian investor.

But no matter how cheap Chevron and Occidental shares become, you must maintain a positive view on long-term oil prices. In this regard, Buffett appears bullish, but investors must understand how crucial commodity prices will be to the success of these two businesses.