Warren Buffett isn't called the Oracle of Omaha for nothin' -- it's a well-deserved title! During his 55 years as CEO of Berkshire Hathaway (BRK.A 0.53%) (BRK.B 0.64%), shares of the conglomerate have regularly outperformed the overall stock market.
And much of this market-beating gain reflects the market-beating performance of Buffett's stock picks. That's why you would do well to poach a few of his choices for yourself.
With that as the backdrop, here's a closer look at three of Buffett's picks currently held by Berkshire Hathaway that would likely be at home in your portfolio as well.
Coca-Cola
Coca-Cola (KO 0.18%) is neither Berkshire's oldest nor biggest holding. But it's pretty close by both measures. The 400 million shares it currently holds were first purchased nearly 20 years ago and have grown to a value of nearly $28 billion. That's nearly 10% of its total stock holdings, making it the conglomerate's fourth-biggest position at this time. The sheer size and age of the stake speak volumes.
Buffett's long-lived bullishness isn't tough to figure out, either: He likes quality investments, and Coca-Cola is one. It's the biggest name in the beverage business, for instance, because it makes what consumers think is a fantastic product and has been a brilliant marketer of it for decades.
It's not just its namesake cola, either. The company also owns Gold Peak tea, Minute Maid juice, Powerade sports drinks, Dasani water, and more, catering to all of consumers' ever-changing tastes.
NYSE: KO
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And that's still not all there is to like. Buffett appreciates the company's business model as well. Contrary to what may be a common assumption, Coca-Cola does very little of its own bottling these days. Most of this relatively low-margin work is handled by third-party bottlers, so the company can focus on what it does best.
That's the aforementioned marketing. Case in point: People who were alive at the time still remember the catchy "I'd like to buy the world a Coke" advertising jingle that was first heard in 1971.
Buffett's chief interest in Coke, however, isn't necessarily rooted in the company's marketing prowess, either. It's arguably first and foremost rooted in the stock's dividend, which has now been raised annually for 63 consecutive years. Newcomers will be plugging into this ticker while its forward-looking dividend yield stands at 2.9%.
Berkshire doesn't reinvest Coca-Cola's dividend payments in more shares of Coke, by the way. It likes adding these dividends to its cash hoard, where it can be used in other ways. It's a strategy you might want to consider for yourself.
Apple
Yes, the shares of Apple (AAPL 0.41%) have struggled of late due to the company's misfires on artificial intelligence (AI). And yes, Berkshire Hathaway has sold quite a bit of its position in Apple since late 2023. Just don't lose perspective on either detail.
As for the sale of the majority of its stake in Apple, the iPhone maker is still Berkshire's single biggest trade. Its 300 million shares are worth $63 billion, accounting for 22% of the conglomerate's total stock holdings.
That's still a tremendous sign of confidence in Apple. Buffett and his lieutenants may have simply grown uncomfortable with how much of Berkshire's portfolio Apple had occupied after several years of huge gains.
Image source: Motley Fool.
As for the disappointing foray into the AI arena, give it time. The company is working on a relaunch that could be much more compelling the second time around.
The stumbling block was mostly its on-device digital assistant, Siri, which has failed to impress of late. This certainly bleeds into the equally disappointing Apple Intelligence tech that debuted in October without many of the most-awaited features, like being able to notify device owners when something personally important to them has surfaced. A handful of image tools were also conspicuously missing. In short, consumers haven't yet been given a full reason to upgrade their iPhones to Apple's latest AI-capable versions.
The company now fully acknowledges its missteps, though, marking the pivot to a more concerted effort to create the "Wow!" that Apple's historically been known for. As an example, Siri itself has a new chief who is responsible for its development. The company says its overhaul won't be complete until early next year, and this will provide the time to further refine the artificial intelligence hardware found on its first-generation AI-capable iPhones (which seems to be what plenty of consumers are waiting on anyway).
In the meantime, the iPhones currently in consumers' hands will continue working their way toward obsolescence, and toward the need for an upgrade.
The point is, Apple -- and its stock -- just need some time.
This might help inspire some patience: An outlook from Precedence Research suggests the global market for AI digital assistants is set to grow by an average annual pace of 24% through 2034.
Capital One Financial
Lastly, add credit card provider Capital One Financial (COF +1.22%) to your list of Buffett stocks to buy right now.
Many investors may not even realize Berkshire owns any of this company. And it doesn't hold a whole lot. Its 7.15 million shares are only worth about $1.56 billion. That's smaller than the conglomerate's stakes in Mastercard, Visa, and American Express.
But it's still arguably the most compelling credit card play among all the ones Berkshire currently holds, for a handful of reasons.
One of those is simply its valuation. Consistent gains from Visa and American Express have added to already-steep share prices over the course of the past several years. But even with Capital One's sizable gains since its low in 2023 following the bear market, shares are still trading at only a little over 14 times this year's expected per-share profit of $15.25.
NYSE: COF
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Perhaps the greater argument for stepping into this Buffett stock sooner than later, however, is the acquisition of credit card company Discover in May of this year. With this deal, the company now has its own payment network, similar to Visa, Mastercard, and American Express. And that clears one of the obstacles that had kept Capital One reliant on those third-party payment middlemen at a cost of over $1 billion per year.
With this component in place, the company will also be able to leverage its new reach in a way that funnels more consumers toward its branded cards and, indirectly, even toward its online bank.
This year's enormous top-line growth projection isn't the new norm, for the record -- that's just the result of combining the two similarly sized companies. Within a couple of years, revenue growth should be back to the single digits.
Even so, this reliably profitable company should be even more reliably profitable, supporting the modest dividend payment. It's not difficult to see why Buffett and his lieutenants first took on a small position in this name in 2023.
