Warren Buffett, one of the greatest value investors of all time, is turning 90 this year. Operating from his hometown of Omaha, Nebraska, Buffett lives in a modest house, drives a modest car, and enjoys the simple pleasures of life, like an ice-cold Coke.

After sticking to the same investing game plan for years, Buffett's Berkshire Hathaway's (BRK.A 1.18%) (BRK.B 1.30%) portfolio has gotten a fairly considerable revamp over the last few years. For instance, trusting the wisdom of his closest Berkshire money managers, the company began buying shares of tech growth stock Apple in 2016. Technology, a sector that Buffett used to mostly avoid, now comprises about 40% of Berkshire's portfolio.

So it's clear that Buffett is willing to go in new directions if the right opportunity comes along. With this in mind, perhaps Buffett should consider Starbucks (SBUX 0.53%), Honeywell (HON 1.66%), and United Parcel Service (UPS 0.02%). These companies offer a great combination of market leadership, dividends, and value.

Here's why Buffett would love all three companies, and why they would fit nicely into Berkshire's portfolio.

Berkshire Hathaway CEO, Warren Buffett

Image source: The Motley Fool.

1. Starbucks

Berkshire Hathaway owns over $30 billion in shares of consumer staple stocks Coca-Cola and Kraft Heinz. Although Starbucks technically falls in the consumer discretionary category, its product line has arguably become more of a staple for consumers than many offerings from Coke and Kraft Heinz. The shift in consumer sentiment away from sugar and preservatives toward healthier options hinders the growth prospects of soda and processed-food companies. Yet Starbucks manages to have a similar level of recession resilience as these companies (with a much brighter future in the forecast).

Starbucks was hit hard by the pandemic but has since reopened nearly all of its stores. Its revenue and earnings are close to pre-pandemic levels, with U.S. same-store comps down just 5% year over year as of its most recent quarter. This is impressive considering 60% of its U.S. company-operated stores are still offering limited seating. 

Starbucks leaned heavily on grab-and-go ordering and its mobile app during the pandemic. And it worked. Customers are using the app and spending more money per transaction than ever before, which bodes well for Starbucks' future.

Since issuing its first quarterly dividend of $0.05 per share in April 2010, Starbucks has raised its annual payout every single year. Its quarterly dividend is now $0.45 per share, which is a yield of 1.7% at today's prices. Starbucks has plans to build new stores focused solely on grab-and-go ordering -- which should help it grow earnings and its dividend for years to come.

2. Honeywell

Just over 2% of Berkshire's portfolio is dedicated to industrial stocks. If Buffett was looking for an industrial to add, then Honeywell deserves to be a top contender.

Like most industrial stocks, Honeywell suffered revenue and earnings declines last year. As results improved toward the end of the year, management said it is now confident that the company can return to growth.

The same factors that hurt Honeywell's 2020 results should help it in 2021. Commercial aviation could rebound as air traffic improves. Higher oil prices and industrial production will help its performance materials and technologies segment. Honeywell's customers delayed building solutions projects in 2020. But in its fourth-quarter conference call, Honeywell management announced orders were piling in, putting its backlog in a good position for 2021. And finally, safety and productivity solutions (SPS) -- the only segment that grew in 2020 -- should continue to benefit from warehouse automation and productivity solutions. SPS ended 2020 with a $4 billion backlog -- double the backlog at the end of 2019. Simply put, Honeywell is seeing business pick up in all of its segments.

Aside from an optimistic outlook, Honeywell has many qualities that Buffett would love. The company's strong balance sheet, history of dividend increases, and growth prospects give it long-term value. Despite last year's challenges, Honeywell was able to generate tons of free cash flow that more than doubled its dividend payments.

HON Free Cash Flow (Annual) Chart

HON Free Cash Flow (Annual) data by YCharts

Excess free cash flow continues to give Honeywell the dry powder needed to limit how much debt it adds to its balance sheet. Today, its balance sheet remains one of the best of the major industrials.

3. UPS

Ranking 48 out of 48 on Buffett's list of holdings is UPS. So yes, Buffett owns the stock. But at 0.003% of Berkshire's portfolio, the company's UPS shares could double and it would hardly make an impact.

UPS rival, FedEx, reported encouraging earnings and guidance on March 18 that showed a strong recovery in business-to-business (B2B) sales and e-commerce growth. This is good news for UPS, which would like its B2B volumes to return to pre-pandemic levels.

UPS has the makings of a perfect Buffett stock. With 70% higher net income and double the market cap of FedEx, UPS is the market leader in its industry. Its adjusted 2020 EPS of $8.23 per share gives it a reasonable price to earnings (P/E) ratio of around 19. UPS has a dividend yield of 2.6%. The company just raised its quarterly dividend to $1.02 per share, more than double what it was 10 years ago.

UPS has plenty of growth prospects as well. It's leading the distribution process for COVID-19 vaccines, a trend Buffett can appreciate seeing as he's been buying healthcare stocks. UPS was also one of the few industrial stocks that crushed earnings throughout 2020, not to mention notching its best quarter ever at the end of the year.

E-commerce is a booming trend that benefits UPS. The company has been expanding its fleet and laying the groundwork for what it expects to be years of e-commerce growth. The pandemic accelerated that trend, which was a big part of UPS' strong 2020 performance. However, there's reason to believe it will retain much of the business it gained while adding more in the years to come.