When you're investing, sometimes it's helpful to look at the moves of ultra-successful people to get some inspiration. You always want to ensure your investments match your risk tolerance and financial goals, but there's nothing wrong with looking toward successful investors or companies for stock inspiration.
Below are two billionaire-owned stocks that investors should consider adding to their portfolios. One can provide consistent dividend income, and the other offers great growth opportunities.
1. Coca-Cola
Coca-Cola (KO 1.03%) is a favorite stock of Warren Buffett, arguably the most well-known investor of our time. It's the fourth-largest holding of Berkshire Hathaway's stock portfolio and has been one of its top holdings for quite a while.
Coca-Cola's stock price hasn't surged as much as many top tech companies have, but it is still up more than 11% this year. That's less than the S&P 500's returns, but considering the company's size and maturity, it's a good start for the year's first half.
One of Coca-Cola's greatest feats as a company is its vast distribution network. Serving over 200 countries, there aren't too many places in the world where you can't find Coca-Cola products -- especially its flagship Coca-Cola soda. This has done wonders for Coca-Cola's brand and market dominance.
The continued focus on beverages instead of branching out to other segments like its biggest competitor, PepsiCo, has allowed Coca-Cola to optimize operations and logistics and operate more profitably. For perspective, PepsiCo made around $10.1 billion more in revenue this past quarter than Coca-Cola, but its operating income (profit from core operations) was only around $1.4 billion more.
KO Revenue (Quarterly) data by YCharts
Coca-Cola's market dominance originally attracted Buffett to the stock. It has maintained this dominance over the past decades, mainly because of its ability to adapt to changing consumer preferences. Its impressive beverage portfolio keeps growing, a sign that Coca-Cola isn't complacent with its market position.
Add in Coca-Cola's attractive and stable dividend (it's a Dividend King), and it's a stock that can provide reliable long-term value.
2. Amazon
Amazon (AMZN -0.87%) is a stock held in many billionaires' portfolios, and it's easy to see why, with the stock up more than 1,000% in the past decade.
Amazon's e-commerce business has made it the brand everyone knows today, but it continues to grow past that and into a juggernaut in many different industries. E-commerce continues to be the revenue driver (over 82% of total revenue in Q1), but its cloud business, Amazon Web Services (AWS), drives much of the profits. In Q1, AWS generated $9.4 billion of Amazon's $15.3 billion in operating income.
Amazon's advertising business has also been picking up steam. It has been its fastest-growing segment in the past five quarters, and its lowest year-over-year revenue growth during that time is still an impressive 22%.
With the growth of Prime Video -- especially as it continues to add sports broadcasting rights -- Amazon's advertising business could become a formidable competitor to advertising titans like Meta Platforms and Alphabet.
| Quarter | Advertising Revenue | Revenue Growth (YOY) |
|---|---|---|
| Q1 2023 | $9,509 | 23% |
| Q2 2023 | $10,683 | 22% |
| Q3 2023 | $12,060 | 25% |
| Q4 2023 | $14,654 | 26% |
| Q1 2024 | $11,824 | 24% |
Data source: Amazon. Revenue figures are listed in millions. YOY = year over year.
As Amazon expands its products and services, its long-term appeal increases because it's becoming less reliant on the success of its e-commerce business. E-commerce is a great industry to lead, but having the much higher-margin cloud and advertising businesses should help generate a lot of profits.
