Are you ready to punt your stock-picking duties to someone else? It's perfectly fine if you are. Properly researching a potential investment takes time that most people just don't have these days. Borrowing a handful of stock picks from a proven professional makes sense. And what better professional to borrow your picks from than perhaps the most-proven pro of all -- Warren Buffett?
With that as the backdrop, here's a rundown of five names Buffett's Berkshire Hathaway (BRK.A +0.43%) (BRK.B +0.40%) is currently holding that would be at home in your portfolio as well.
1. Apple
Apple (AAPL +1.08%) is such a frequently suggested pick that it's almost become a cliché. Clichés are clichés for good reason, however.
In this case, the reason is the company's control of the smartphone market. Apple's iPhone is the world's single-most-popular mobile device, accounting for roughly half of Apple's total revenue. Some would argue the company is too dependent on the iPhone, in fact.
There's more to the story, though. Consumer Intelligence Research Partners reports that 94% of current iPhone owners intend to buy another iPhone in the future, versus only 91% for users of Android smartphones.
NASDAQ: AAPL
Key Data Points
This slight lead in the loyalty front is how Apple has managed to amass more than 2 billion active users of its iOS operating system; most of them are iPhone owners. Of course, iOS users are increasingly paying for apps and other digital content, spurring sales growth for Apple's Services arm. Its revenue was up 8% for the quarter ending in July.
Tech stocks typically haven't been Warren Buffett's thing, so the fact that Apple is Berkshire's single-biggest stock holding speaks volumes about the Oracle of Omaha's view of the company.
2. Coca-Cola
Buffett's Berkshire isn't just a major shareholder of Coca-Cola (KO +0.59%). He's also a big fan of the product. Buffett reportedly drinks five cans of the company's namesake cola every single day!
On the surface, it's a quirky anecdote. But, in a more philosophical sense, Buffett's borderline-addictive loyalty to the company -- he no longer drinks Pepsi -- is representative of most consumers' love for the brand. Digital advertising analytics outfit DesignRush says U.S. consumers' loyalty to Coca-Cola is the nation's fifth-fiercest loyalty, one place behind Apple.
Of course, Buffett's got to like the dividend and its growth too. Coca-Cola's stock's yielding 3.3% of its current value, and the company's now raised its dividend payment for 61 consecutive years.
3. American Express
With nothing more than a passing glance, American Express (AXP 0.68%) is just another credit card payment middleman, in the same vein as Visa and Mastercard. And to be fair, there's plenty of overlap.
American Express isn't just a credit card company, though. In fact, the crux of its business is managing a perks and rewards program for its charge-card holders -- programs so compelling that consumers and corporations alike are willing to pay steep annual fees for access to them.
These fees alone make up more than a tenth of its top line, and in its high-margin revenue, these fees make an even bigger impact on the bottom line. Of course, all these perks also inspire cardholders to use their cards more and more, often in lieu of cash. The so-called "discount revenue" driven by this spending makes up more than half of its business.
Its unique business model is a key reason Berkshire Hathaway has been sitting on 151.6 million AmEx shares since late 2006.
4. Bank of America
It's been tough to be a bank investor lately, even when that bank is stalwart Bank of America (BAC +0.73%). Rising interest rates aren't just creating liquidity woes for the industry and crimping demand for loans. They're also making it tough for borrowers to repay existing loans; defaults and delinquencies are on the rise as well.
It's not all bad news for banks right now, however. Interest income is way up thanks to higher interest rates. Last quarter's net interest income was up 4% year over year for Bank of America, and while the bank's provisions for future losses on loans is growing, this growth pace is slowing down.
The company may be able to ease its way back from more serious trouble -- particularly if the economy experiences a recession-evading "soft landing." Newcomers will be collecting a dividend of nearly 3.8% on the stocks in the meantime.
5. Procter & Gamble
Last but not least, consider following Warren Buffett's lead by taking a stake in consumer goods giant Procter & Gamble (PG +0.92%).
For the record, Berkshire shed most of its position in Procter & Gamble in late 2015 following some dealmaking that ended with Berkshire buying battery brand Duracell from P&G. It's curiously held on to 315,400 shares of P&G stock ($44 million worth) since then, however, technically qualifying it as a Buffett holding.
NYSE: PG
Key Data Points
You may want to step into a relatively larger stake for yourself in light of last quarter's results. Although the total amount of product sold was essentially flat year over year for the quarter ending in September, organic revenue grew 7% thanks to price increases that customers willingly paid. It's a testament to the pricing power Procter & Gamble enjoys.
Of course, it's also a testament to the fact that Procter & Gamble can simply outpromote its competitors. P&G is one of the world's very biggest advertisers, and depending on the year is occasionally the planet's single-biggest spender on ads.
The company's deeper pockets may give it an unfair advantage on smaller consumer goods outfits, but investors aren't looking for a fair fight. They're looking for reliable returns that deep-pocketed outfits like Procter & Gamble can offer.
