Warren Buffett is a name that's synonymous with investing success. Through his company, Berkshire Hathaway, he's managed to amass a fortune in the stock market rivaled by very few in history. Many Berkshire Hathaway shareholders have also gotten rich along the way.
Buffett's investing philosophy has remained simple yet is tried and true: Invest in great businesses and hold them for the long haul.
If you're looking for Buffett stocks to invest in right now, look no further than these three no-brainers.
1. Coca-Cola
Coca-Cola (KO 0.15%) is up the fourth-largest position in Berkshire Hathaway's portfolio, trailing behind only Apple, Bank of America, and Chevron. Buffett likes Coca-Cola because it's a stock he feels comfortable holding forever, primarily because of the company's iconic brand and unrivaled distribution.
Impressively, Coca-Cola has managed to get distribution in more than 200 countries and territories around the world, which isn't easy to do -- especially profitably. In the first quarter of this year, the company increased its organic revenue (revenue from its core business operations) by 12% year over year. That's a decline from its Q4 2022 year-over-year growth, but it still beat earnings-per-share predictions by 5.4%.
The company continues to add to its portfolio by investing in beverage categories outside of soft drinks. Coca-Cola's water and coffee segments unit case volume increased by 5% and 9%, respectively, outpacing its flagship Coca-Cola soda and other sparking soft drinks.
There's no doubt soft drinks are Coca-Cola's main money-maker, but its long-term growth will likely depend on how well it can compete in high-growth categories such as ready-to-drink alcohol. The good news is Coca-Cola's management has shown its willingness to make the necessary investments to maintain its dominance and expand its offerings.
You could argue that Coca-Cola is slightly overvalued, but if you're in it for the long term, you shouldn't be too concerned, given the company's track record. Add in the company's generous dividend, and you can be like Buffett and feel comfortable holding this stock forever.
2. Snowflake
Snowflake (SNOW 2.69%) was a rare investment in an initial public offering (IPO) for Berkshire Hathaway, which purchased about $735 million worth of shares of the company at its $120 IPO price in September 2020. Snowflake's stock is now just over $155, which isn't a loss for Berkshire Hathaway, but it's also a far cry from its November 2021 high of about $392.
Snowflake is a cloud data-warehousing platform that seems to have all the tools needed to be an industry leader for a long time. Buffett once said, "If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes," and Snowflake should be a stock investors feel comfortable holding for a decade-plus.
As of March 1, the company had just over 7,800 customers (up 31% year over year), with 330 spending at least $1 million annually with the company (up 79% year over year). And one way to know it's not just hype is Snowflake's 158% dollar-based net revenue retention rate. This means customers are spending 58% more each year with the company -- a key to longevity.
Snowflake hasn't reached net profitability yet, but its free cash flow is impressive. In its 2022 investor day presentation, the company said it wanted to achieve 25% free-cash-flow margins (free cash flow as a percentage of revenue) by its 2029 fiscal year. It managed to hit 25% this past fiscal year, so the company is headed in the right direction.
3. Visa
It's been a good few years for Visa (V 0.65%), which has outperformed the S&P 500 over the past five years.
Visa has one of Buffett's favorite qualities in a company: a huge competitive moat. In Visa's case, its competitive moat is its merchant reach. As of the fiscal second-quarter ended March 31, Visa had more than 100 million merchants in its global network.
Because Visa earns money by taking a percentage of the transactions it processes, it could take a slight hit if a recession occurs and causes people and businesses to slow spending. In the meantime, the company's been going strong. In fiscal Q2, Visa brought in $7.9 billion in revenue (up 11% year over year) and increased payments volume by 10%.
Despite its impressive reach, there's still plenty of room for Visa to grow, considering how many countries still operate predominantly with cash. The gap it has on competitors will be all but impossible to close anytime soon -- especially if Visa continues growing at the current rate.
