If you are looking for some reliable and profitable stocks to add to your portfolio, you might want to consider following the footsteps of one of the most successful investors of all time: Warren Buffett. The legendary CEO of Berkshire Hathaway (BRK.A -0.76%) (BRK.B -0.69%) has a proven track record of picking winners and generating consistent returns for his shareholders.
Below is a brief overview of two of the Oracle of Omaha's top stocks that screen as no-brainer buys right now.
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Coca-Cola: A top defensive stock
Coca-Cola (KO) is one of the most iconic and recognizable brands in the world, with a loyal customer base and a global distribution network. The company sells more than 200 master brands globally, it has a commercial footprint in over 200 countries and territories, and claims a dominant market share of about 21% in the non-alcoholic ready-to-drink category. Coca-Cola has been a staple in Buffett's portfolio since 1988 when he bought a 6.2% stake. Today, Berkshire Hathaway owns 9.22% of the beverage giant, worth about $24.1 billion. Coca-Cola is presently the diversified holding company's fourth-largest stock holding.
Coca-Cola is a top defensive stock that can withstand both economic downturns and market volatility. Underscoring this point, the company's free cash flows, cash on hand, and revenue have all risen at a steady rate over the past three years, despite the challenges associated with the pandemic, global supply chain kinks, geopolitical turmoil, inflation, and high interest rates.
KO Revenue (Annual) data by YCharts
It also pays a generous dividend, with a current yield of 3.04%, and has increased its payout for 61 consecutive years. On top of its generous payout, Coca-Cola has also been investing in innovation and diversification, expanding its portfolio to include more health-conscious and environmentally friendly products, such as sparkling water, plant-based drinks, and recyclable packaging. As such, the company should be poised to deliver strong financial results for the foreseeable future.
Coca-Cola's entrenched competitive position, laser-like focus on innovation and growth, and top-notch dividend program make it a great addition to almost any type of portfolio.
Berkshire Hathaway: A proven winner
Berkshire Hathaway is not only Buffett's own company, but also one of his best investments. The conglomerate owns dozens of businesses across various sectors, such as insurance, railroads, energy, utilities, retail, manufacturing, and technology. Some of its most notable subsidiaries include Geico, BNSF Railway, Dairy Queen, and Duracell. Berkshire also has a massive stock portfolio, valued at about $351 billion as of Aug. 30, which includes stakes in industry leaders like Apple, Bank of America, American Express, and Amazon.
Berkshire Hathaway is a powerhouse of growth and value creation, with a remarkable history of outperforming the S&P 500 index. The company has grown its per-share market value by an average of 19.8% annually since 1965, compared to 9.9% for the S&P 500 index. It has also delivered a total return of 3,787,464% since Buffett took over in 1965, compared to 24,708% for the index. Berkshire Hathaway is also known for its financial strength and discipline, with over $147 billion in cash on hand at the end of the most recent quarter.
All told, Berkshire Hathaway provides instant diversification, exposure to a wide range of high-quality businesses and stock holdings, and an ocean of cash reserves. If you're looking for an attractive mix of quality and safety, Buffett's holding company should fit the bill.
