Warren Buffett has built an enviable track record buying stocks. This goes back nearly seven decades to when he was running an investment partnership and continues to this day as the CEO of Berkshire Hathaway.
A few months ago, he announced his plans to retire as the company's CEO at year-end. Investors shouldn't take that as a sign the Oracle of Omaha's investing prowess has slipped, however.
Among Berkshire Hathaway's stock holdings, long-held Coca-Cola (KO -0.13%) and Domino's Pizza (DPZ -0.54%) stand out. Fortunately, you don't need a lot of money to invest in the two companies.
You can start investing in each one with small sums. Here's what makes them attractive.
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1. Coca-Cola
Coca-Cola first started selling soda in 1886. It has survived by adapting to consumer tastes. It now sells other beverages, such as water, juice, and plant-based beverages, in more than 200 countries.
Dividends remain one of the main attractions for investors. Earlier this year, the board of directors raised the quarterly payout by more than 5% to $0.51. The company has now increased payments for 63 straight years, making it a Dividend King.
Shareholders will earn a nice dividend yield. The stock's 3% yield easily bests the S&P 500 index's 1.2%.
Those looking for breakneck growth should search elsewhere since Coca-Cola is a mature company. That's reflected in management's long-term goals, which include 4% to 6% revenue growth and a 7% to 9% increase in operating income, both adjusted for certain items like removing foreign currency translation effects.
Coca-Cola has been meeting these goals. Second-quarter revenue increased 5%, driving a 15% operating income rise.
The combination of solid earnings growth and higher dividends makes Coca-Cola's stock an attractive investment based on its total return potential.
2. Domino's Pizza
Domino's Pizza has grown into the world's largest pizza chain with more than 21,500 locations. It franchises about 99% of its locations. This low-cost model allows Domino's to collect royalty fees based on a percentage of the franchisee's sales.
Since opening its first restaurant in 1960, Domino's Pizza continues to resonate with customers based on its affordable prices and convenient locations offering pick-up and delivery options. Management's MORE strategy aims to produce more sales, more profits, and more stores in a smart way. This includes focusing on providing delicious food, and offering customers convenience, consistency, efficiency, and competitive prices.
The simple yet effective concept continues to resonate with customers. You can see this by looking at Domino's consistent sales growth.
Positive same-store sales (comps) continued in the second quarter. U.S. comps increased 3.4%, and international comps gained 2.4%. Importantly, Domino's didn't rely on price increases to drive comp increases. The higher U.S. comps were due to higher traffic and increased spending. Management credited higher traffic largely for the international comps' growth.
The company still has room for growth. That's because, with this success, Domino's continues expanding. It added 178 locations during the quarter (30 domestic and 148 international).
The company also pays a reliable dividend. While the company hasn't built the same track record of dividend increases as Coca-Cola, it has raised them for a number of years. This includes a 15.2% hike earlier this year. Shareholders will receive a 1.5% dividend yield, slightly above the S&P 500.
