I've got some good news and some bad news. The bad news is we probably can't replicate Warren Buffett's investment performance right to the letter. After all, the billionaire bought certain holdings quite a while ago -- and we can't go back in time to follow his every step.
But here's the good news: Many Warren Buffett stocks make great additions to a portfolio at any time. That's because, over time, these companies have what it takes to deliver elements like earnings growth or dividend growth. And this should boost Buffett's portfolio -- and yours -- down the road.
Let's check out two of these solid Buffett stocks everyone should own.
1. Amazon
Amazon (AMZN -1.14%) is a great example of a company set to grow earnings over the long term. That's thanks to its dominance in two high-growth industries: e-commerce and cloud computing. Both markets are set to increase in the double digits this decade, and Amazon should benefit.
Let's talk about e-commerce first. Amazon is tackling that area by growing its Prime subscription service membership -- and to do that, it continues to broaden what Prime has to offer.
For instance, Buy with Prime, launched last year, allows members to buy things on certain e-commerce sites outside of Amazon -- and benefit from the Amazon checkout and shipping experience. And Amazon has said Prime customers are relying more and more on Prime for shopping and entertainment. Today, Amazon has more than 200 million Prime members.
As for cloud computing, Amazon Web Services (AWS) is the worldwide leader in the industry. And even as higher inflation and general economic woes hurt Amazon's earnings, AWS still managed to report double-digit revenue growth last year.
We may expect a slowdown now as AWS customers cut spending -- but this, like the rising inflation headwinds facing the e-commerce business, is a temporary situation. Meanwhile, AWS offers its customers lower-priced data storage options, so they are likely to stick around even through tough times.
Finally, to manage today's environment, Amazon is improving its cost structure. This should help boost growth down the road too. Today, Amazon shares are trading near their lowest in relation to sales since 2015. This looks like a terrific entry point for a company set to win over time in two big markets.
AMZN PS Ratio data by YCharts
2. Coca-Cola
Warren Buffett loves Coca-Cola (KO 0.68%) for its dividend growth, and you will too. The beverage giant offers a 3% dividend yield. That's higher than the industry average of less than 2%, according to NYU Stern School of Business research. Today, Coca-Cola pays investors $1.84 per share in passive income annually -- and, if history is a guide, that's likely to increase.
Coca-Cola has lifted its dividend for more than 50 years, offering it a spot on the elite list of Dividend Kings. This shows us that rewarding shareholders is important to the beverage maker. And that means the company probably will continue with this policy. Coca-Cola's free cash flow has climbed more than 78% over the past five years, so the company has the resources to continue increasing payouts.
And over the past five years, Coca-Cola's dividend payments have helped it surpass the performance of the S&P 500. It's been a profitable investment for those who hold on for the long term.
KO Total Return Price data by YCharts
Coca-Cola may not offer as much earnings growth potential as a company like Amazon -- but the popularity of its products and opportunities in emerging markets could boost earnings over time.
Last year, in spite of a difficult economy, the company's total net revenue rose 11%. This demonstrates the strength of Coca-Cola's brand worldwide. And in emerging markets, a "vast opportunity for growth" lies ahead, the company predicts. That's because, there, only about 30% of beverage consumption is commercialized. That leaves a lot of room to introduce new products and gain share.
Though Coca-Cola isn't a growth stock, we still should expect earnings to advance over the long term. Meanwhile, we can sit back, and like Warren Buffett, collect passive income while we sip on a Coke.
