Billionaire investor Warren Buffett has a massive following in the investing world. Many investors often mimic his picks, knowing that investments Buffett chooses for his portfolio have solid fundamentals and can make for good long-term investments. The three top holdings in the Berkshire Hathaway portfolio today are Apple (AAPL +1.05%), Bank of America (BAC 1.49%), and American Express (AXP +1.53%). Here's how you would have done if you invested $10,000 into each one of them 10 years ago.
NASDAQ: AAPL
Key Data Points
Apple Stock: 887% return
Apple is the top holding in the Berkshire Hathaway portfolio, at around 41% of the portfolio. The next largest stock (Bank of America) accounts for less than 11%. Buffett is a big fan of Apple's business and it's hard not to like a company that has such a loyal customer base.
In each of the past three fiscal years (Apple's year ends in September), the company has generated at least $100 billion in pre-tax profits. And its revenue during those years has totaled at least $365 billion. The company generates great margins on its iPhones and iPads and with more than 2 billion active Apple devices, there's a huge user base to whom the company can potentially upsell more products and services.
Although Apple's stock has been struggling this year, if you invested $10,000 into the stock a decade ago, your investment would now be worth close to $99,000 when including the dividend.
NYSE: BAC
Key Data Points
Bank of America: 180% return
Berkshire's next-largest holding is Bank of America. It's a distant second but it's still a notable investment. Buffett loves bank stocks and insurance companies, so it's little wonder why Bank of America would be a top holding. It's one of the top banks in the country and it's one of the safest stocks investors can hold in their portfolios.
Bank of America generates impressive margins as its net income has totaled around $25 billion or higher in each of the past three years, and revenue during that stretch has grown from $89 billion to just under $99 billion this past year.
Buffett has long been a believer in betting on America and there are few better ways to invest in the economy than by holding shares of a top bank. Even now, with Bank of America trading at just 1.1 times its book value, it's an attractive stock to own, especially when you also factor in its dividend yield of 2.6%.
Bank of America hasn't been the growth machine that Apple has been over the past decade, but you still would have nearly tripled your money here. When including the dividend, a $10,000 investment in the bank stock 10 years ago would now be worth around $28,000.
NYSE: AXP
Key Data Points
American Express: 209%
Buffett loves financial stocks and in Berkshire's portfolio, you'll find all three major credit card companies accounted for. American Express, however, ranks higher than Visa and Mastercard. One of the reasons is likely its more affluent customer base. As is the case with Apple, these types of customers may be in better financial shape to handle the effects of rising inflation, and thus, are less sensitive to worsening economic conditions.
American Express has generated impressive growth in recent years as cardholder spending has hit record levels. Last year, Amex reported $60.4 billion in revenue, which was 15% higher than in the previous year and 40% more than the $43.1 billion it reported in 2021. And with net income totaling $8.3 billion in 2023, the company also generates strong, double-digit profit margins.
Amex's business hasn't been slowing down and neither has the stock. If you invested $10,000 into the business a decade ago, your investment would now be worth nearly $31,000 (including dividends), slightly outperforming Bank of America during that timeframe.
By investing $30,000 across these three stocks a decade ago, you would have a profit of $128,000 -- thanks largely in part to Apple's gains. But all of these stocks have been phenomenal investments over the years and with strong financials and more growth opportunities still ahead, there's plenty of reason to remain bullish on them for the foreseeable future.
