If you owned a $1,000 stake in Berkshire Hathaway when Warren Buffett assumed control of the company back in May of 1965, that position would be worth more than $27.5 million today. The investment conglomerate now has a market capitalization of roughly $771 billion and stands as the one of the world's largest companies, and The Oracle of Omaha's ability to identify promising businesses worth holding long term has played a big role in getting there.
While Berkshire's massive market cap suggests its most explosive days of growth are likely in the past, an incredible performance and top-tier management and analyst teams suggest it can still pay to look to the company for investing inspiration. Read on for a look at five top stocks in the Berkshire Hathaway portfolio that are worth buying today and holding for the long haul.
Image source: The Motley Fool.
1. Amazon
Even with current holdings worth roughly $1.8 billion, Amazon (AMZN -1.65%) ranks as just the 21st-largest overall stock holding in Berkshire's portfolio. The investment conglomerate first purchased the e-commerce and cloud computing giant's stock in 2019, and you can be sure that Buffett regrets not investing in the multi-industry innovator sooner. The famously successful investor went so far as to describe himself as "an idiot" for not buying shares at an earlier stage.
With gains of roughly 21,680% over the last 20 years, it's not hard to imagine why The Oracle of Omaha is frustrated about taking some time to see the light on Amazon, but the company will likely continue serving up more strong performance over the long term. Amazon's e-commerce and cloud businesses still have incredible runways for expansion, and these pillars give it the flexibility to pursue wins in other emerging technology and service trends.
2. Snowflake
While the Oracle of Omaha is best known as a value investing guru, that doesn't mean that he and the Berkshire team don't sometimes see great value in highly growth-dependent stocks. Snowflake (SNOW -1.61%) provides a data-warehousing platform that can be used to combine and analyze information from Amazon, Alphabet, and Microsoft's respective cloud platforms, and surging demand for its services is translating to rapid business expansion.
Image source: Snowflake.
Based on its forward price-to-sales multiple of approximately 30.5, it could be argued that Snowflake is the most "expensive" stock in the Berkshire portfolio. On the other hand, it has a very favorable growth outlook, and I wouldn't be surprised at all if it winds up being one of the investment conglomerate's best-performing stocks over the next decade.
3. Verizon
With the largest wireless network in the U.S., highly rated service, and strong customer loyalty, Verizon (VZ -0.68%) stands to be one of the biggest beneficiaries in the next-generation network technologies in the telecom industry. 5G is paving the way for upload and download speeds that absolutely trounce what's possible on 4G LTE in even the most ideal circumstances, and this big leap forward in network technology will make a wide range of new technologies and services possible.
Verizon's business is already a free-cash-flow-generating machine, and that allows it to return substantial cash to shareholders in the form of dividends. The company's payout currently yields roughly 4.7%, and the stock looks cheap trading at roughly 10 times this year's expected earnings.
4. Bank of America
Berkshire Hathaway's holdings in Bank of America (BAC -1.07%) stock are currently worth roughly $45 billion and account for more than 13% of its overall stock portfolio. The banking giant is Berkshire's second-largest overall stock holding and its biggest investment in the financials industry by a wide margin.
There will always be a need for banking and financial services, and Bank of America's incredible scale gives it an edge in the space. Bank of America also pays a dividend that currently yields roughly 2.1%.Even better, the company has been raising its payout at a rapid clip over the last decade, and there's a good chance that investors can look forward to more payout growth.
BAC Dividend data by YCharts
5. Apple
Buffett has said that Apple (AAPL 0.52%) is probably the best business he knows, and a quick look at the Berkshire Hathaway portfolio makes it clear he has a high level of conviction on that call. The tech company stands as the single largest stock holding in Berkshire's portfolio, representing roughly 46% of its total stock holdings.
Apple has the world's most valuable brand in the consumer electronics space, and that advantage has allowed the company to generate far more profits from mobile, computer, and wearable hardware sales than its competitors. The tech giant has also built a powerful software and services ecosystem that's helping to power new growth stages for the company.
With a market capitalization of roughly $2.73 trillion, Apple stands as the most valuable company in the world and could have a harder time delivering relative growth going forward. However, the company's core hardware and software businesses continue to look very strong, and it has the potential to score massive wins in augmented reality, smart cars, and other potentially revolutionary trends.
