Warren Buffett is an immensely rich man whose investment vehicle Berkshire Hathaway (BRK.A +1.63%)(BRK.B +1.71%) has an equity portfolio stuffed with nearly 60 stocks.
Happily, thanks to the wide variety of titles in that portfolio, none of us have to be as wealthy as the celebrated investor to get our hands on some of the better companies. Here's a look at two very solid long-term plays that won't drain your bank account much: Nu Holdings (NU +1.24%) and Coca-Cola (KO +0.98%).
1. Nu Holdings
One consistent theme throughout Buffett's long leadership reign at Berkshire is his affection for finance stocks. He has a sharp eye for high-potential plays in the industry, and in mid-2021, his company started investing in Brazil's Nu Holdings.
These days, Berkshire holds over 107 million shares of Nu, giving it a stake of just over 2% of the company. At the current share price, that comes to nearly $882 million.
As its name implies, Nu is a cutting-edge fintech whose anchor asset is digital lender Nubank. It offers a wide range of both traditional and modern financial services, including loans, deposits, and instant transfers. Customers access these services through the company's mobile app, which has won praise for its user-friendliness.
Brazil is a sprawling, populous country that until recently had a banking system that was traditional, limited, and backward-looking. Nu is helping to wrench that system into the modern age with its quick and easy digital offerings. It's no wonder take-up has been fast and heavy.
In the company's second quarter, it managed to grow its customer count by a mighty 28% year over year; the tally now stands at almost 84 million. More growth is in the cards, as Nu has plenty of room to expand its relatively young operations outside of Brazil in nearby Latin American markets.
And since its home country's population is home to more than 218 million, there's surely far more growth in store there, too.
NYSE: NU
Key Data Points
That rapid adaptation by consumers is making a very positive difference in its financials. Numerous metrics shot notably higher in the second quarter. The company also managed a dramatic flip into the black on the bottom line.
The only slight ding on Nu is that many investors have discovered its vast potential, so its price has climbed to thin-oxygen heights (albeit only to $8 and change per share). But, as Buffett believes, we should always consider buying quality stocks at both low and high prices. This one definitely makes the grade as a solid investment.
2. Coca-Cola
Nu is a relatively new stock for Buffett and Berkshire. Let's look at a long-termer now: Coca-Cola.
The Oracle of Omaha's company first plowed money into the beverage seller in 1984 and continues to have a massive stake in it. Berkshire holds 400 million shares, which is a 9% stake in the company and makes it Berkshire's No. 4 stake in terms of total value (which, at the moment, is nearly $23 billion).
Coca-Cola is a model Warren Buffett stock, with its wide moat. Although as a product it's fairly simple and cheap to make (it's almost entirely sugar and water, after all), the prominence, popularity, and reach of its brand are unparalleled. Let's face it, no one is going to make a soda that's anywhere near as famous and popular as Coke.
NYSE: KO
Key Data Points
Better yet, as a low-cost product, keeping Coke successful is basically a matter of marketing. As a result, the company throws off vast piles of cash (another feature Buffett loves). With that mountain of money, it is able to fund a constantly rising dividend.
This is why many investors consider it the ultimate dividend stock. Coca-Cola is one of the rare S&P 500 index components that have lifted their payouts at least once per year for a minimum of 50 consecutive years. These days, the stock's yield is well over 3%, putting it notably higher than the average for S&P 500 stocks, and comfortably above that of many peer blue chips.
One aspect of Coca-Cola's performance I find especially admirable is that the company always seems to find a way to grow revenue despite its size and heft. Its full-year 2022 top line of almost $43 billion was an extremely fizzy 10%-plus higher than the previous year's.
Headline net income and free cash flow were both down by not-very-worrying amounts, but at these levels -- over $9.5 billion for each of those line items -- who cares? This remains a high-margin, cash generating monster of a company.
Given that, it's very likely Coca-Cola will never disappear from Berkshire's portfolio. It probably belongs in yours, too.
