Warren Buffett may very well be the best-known investor in history. Through decades of investing success that's seen his net worth skyrocket to over $130 billion and his company, Berkshire Hathaway, become one of the world's most valuable companies, it's easy to see why.
Buffett and Berkshire Hathaway's success has inspired investors to mimic some of their investments to try and replicate some of their success. While this may not be the best approach for all investors, there are some Buffett stocks that investors can feel comfortable holding onto for the long haul.
1. Coca-Cola
Cola-Cola (KO) is Berkshire Hathaway's fourth-largest holding, with 400 million shares. That's 6.6% of its portfolio and also amounts to a 9.3% stake in Coca-Cola.
The main allure of Coca-Cola's stock is its dividend. The company has a trailing-12-month dividend of around 3%, double the S&P 500's current yield. Beyond the above-average dividend yield, investors can appreciate Coca-Cola's commitment to yearly dividend increases. The company has increased its yearly dividend for 62 straight years and has grown over 59% in the past decade alone.
KO Dividend data by YCharts.
There may be ups and downs with Coca-Cola's stock (or any stock, for that matter), but investors can count on the dividend being as reliable as it comes.
Aside from being the world's largest non-alcoholic beverage company, Coca-Cola's longevity rests in its commitment not to get complacent with its market position. The company continues to make the necessary investments to ensure it adapts to changing consumer preferences. That's a recipe for sustained success.
2. Amazon
Amazon (AMZN 3.43%) is a stock that Buffett has mentioned he was hesitant to invest in initially, but he now regrets it. Considering Amazon's stock has had generational returns in the past decade alone, it's easy to see where this regret comes from now.
Amazon may be known for its e-commerce business, but it has hit the jackpot with its Amazon Web Services (AWS) business. E-commerce is responsible for most of Amazon's revenue, but AWS is its biggest profit-maker. In the fourth quarter of 2023, Amazon's operating income was $13.2 billion, and AWS accounted for $7.2 billion.
As of the fourth quarter of 2023, Amazon's market share in the global cloud infrastructure service industry was 31%, leading second-place Microsoft Azure by 7%. E-commerce will continue to be Amazon's bread and butter, but cloud services will likely drive a lot of its growth in the foreseeable future.
According to Fortune Business Insights, the global cloud computing market was valued at around $569 billion in 2022. It's projected to reach over $2.4 trillion in 2030, representing a compound annual growth rate of around 20%. Even growing at market pace should work wonders for Amazon's financials, which already aren't too shabby.
AMZN Net Income (Quarterly) data by YCharts.
Amazon is doing a good job of diversifying its business and getting a hand in many industries. Add in the recent AI boom, and the company is well-positioned to be a tech staple long-term as it strengthens its competitive advantage.
3. Procter & Gamble
Procter & Gamble (PG -0.78%) owns some of the best-known household brands in the world. From Tide to Pampers to Tampax to Old Spice, there's no shortage of iconic brands that P&G has under its umbrella of companies.
Much like Coca-Cola, the main appeal of P&G's stock is its dividend. It's a certified Dividend King, having increased its yearly dividend for 67 straight years and paid one for 133 years altogether. Only four companies have a longer streak of dividend increases.
P&G is one of the poster children for defensive stocks. When the economy is going through a downturn, it's fairly easy for consumers to cut back on discretionary items like entertainment, electronics, or travel. It's much harder (and generally not recommended) to forego the personal health, cleaning, or hygiene products that P&G sells.
Buffett likes companies with stable earnings, and that's exactly what P&G has. Its products sell regardless of the economic or market conditions, so investors tend to lean on defensive stocks when the economy is less than ideal or market volatility is high.
You probably won't see growth stock-like gains from P&G's stock, but it's a company that you can feel comfortable holding in your portfolio for the long haul.
