If you're looking for stocks to buy and hold for the long term, it's a great idea to turn to an expert. I'm talking about billionaire investor Warren Buffett. Words like "short term" and "speculation" aren't even part of his vocabulary.
Buffett prides himself on buying top-notch companies for reasonable prices and sticking with them for years. An example is Coca-Cola. He bought the shares back in the 1980s, and today the company continues to be one of his favorite holdings.
So let's look to the star investor for inspiration. Here are two of the best Buffett stocks to buy right now for the long haul.
1. Amazon
Amazon (AMZN -1.64%) might not look so brilliant at the moment. The stock is heading for a decline of more than 40% this year. And rising inflation and the general economic situation has weighed on earnings, too. Amazon is facing higher costs, and consumers have less money to spend.
But if we stop here, we would be doing exactly what Buffett never would do: focusing on the short term. Amazon's long-term picture is much different. That's because today's economic troubles are temporary. And Amazon has the strength to weather the storm and thrive down the road.
The company is a leader in two markets that are growing in the double digits: e-commerce and cloud computing. The e-commerce business is suffering at the moment. But over the long term, Amazon's Prime subscription service and the company's extensive fulfillment network should drive a new wave of growth. Even in today's tough environment, Prime members are spending more and more.
Cloud computing continues to be a bright spot for the company. Amazon Web Services (AWS) is growing revenue and operating income in the double digits. And Amazon has increased investment in AWS to ensure success.
Right now, its shares are trading at their lowest in relation to sales since 2015. Considering Amazon's two supercharged businesses, this is an opportunity with "buy" written all over it.
2. Johnson & Johnson
Buffett surely likes Johnson & Johnson's (JNJ -0.69%) dividend profile. The company is a Dividend King, meaning it has increased its dividend annually for at least the past 50 years.
This shows that rewarding investors is important to the pharmaceutical company. So there's reason to be optimistic J&J will keep increasing those payouts. That's great news for Buffett and for you.
And now just so happens to be a good time to buy J&J. The company will spin off its consumer health business into a separate company next year. Consumer health could be considered a bit of a drag on earnings. The unit represents the smallest contributor to revenue compared with J&J's two other businesses: pharmaceuticals and med tech. It has also posted the slowest growth of the three.
All of this means J&J could be about to embark on a new chapter of growth, led by its strongest businesses. The company also has a deep pipeline of potential products that should keep revenue growth going over time. Right now it has more than 100 candidates in development.
J&J also is growing through acquisitions. For example, it recently said it would buy heart pump expert, Abiomed.
How much will all of this potential growth cost you? Today, J&J trades for less than 20 times forward earnings estimates. This is an absolute steal considering the promise of passive income -- and the exciting wave of growth on the horizon.
