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Berkshire Hathaway (BRK-A, BRK-B) CEO Warren Buffett has established himself as one of the greatest investors ever. No one will dispute this fact or the idea that Warren Buffett stocks tend to get much more attention from conservative investors for various reasons.
Any company that receives the blessing of the Oracle of Omaha is one that long-term investors will look to own. With an annualized growth rate of 19.8% from 1965, Berkshire Hathaway has outperformed the S&P 500 and picked the right stocks that have proven the test of time.
Certain companies possess the essential qualities to maintain their leadership positions and are immune to significant competitive challenges, and this is what Buffett loves. These companies are among the top long-term buy-and-hold stocks with robust brands and favorable growth prospects. Moreover, they offer indispensable products or services and demonstrate effective management, solid financials, and consistently strong performance. These three stocks embody all these attributes, according to the Oracle of Omaha.
| SYMBOL | COMPANY | PRICE |
|---|---|---|
| BAC | Bank of America | $29.19 |
| KO | Coca-Cola Company | $61.67 |
| AAPL | Apple | $184.92 |
Bank of America (BAC)
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Bank of America (BAC) is a strong permanent buy-and-hold investment among the most important banking companies in the United States. Notably, even Warren Buffett has shown confidence by acquiring BAC stock over time. The bank’s consistent ability to generate positive operating leverage since 2015 has contributed to this sentiment. Additionally, Bank of America has demonstrated solid earnings, with its earnings per share increased from 80 cents to 94 cents in the last quarter despite facing challenges.
Buffett’s recent actions suggest a shift in his banking investments, with a focus away from regional banks. He still owns more than 1 billion shares, or 13% of Bank of America, maintaining a sizable interest in the business. This makes it one of his largest holdings, second only to Apple (NASDAQ:AAPL).
Bank of America stands as a stable investment compared to regional banks, benefiting from depositors seeking security amid rising interest rates. The higher rates enable the bank to increase loan charges, strengthening its financial performance. Additionally, Bank of America presents a favorable valuation compared to peers like JPMorgan Chase and Wells Fargo, trading at a lower earnings multiple and offering a significant discount based on book value and cash holdings.
Coca-Cola (KO)
Coca-Cola (KO) is a top holding in Buffett’s portfolio, often ranking third or fourth alongside American Express(AXP). Coca-Cola pays a dividend yield of around 3.1% and has increased dividends for 61 consecutive years. It is well-positioned as a safe stock for a recession due to its value proposition and the anticipated need for a pick-me-up as people return to work. In a downturn, job security becomes crucial, and employees are likely to show up to the office daily, making Coca-Cola a reliable choice.
With an estimated value of $258 billion and a wide variety of billion-dollar companies, Coca-Cola is the leading non-alcoholic drink corporation in the globe. Notably, Warren Buffett’s Berkshire Hathaway owns a significant 9.2% stake in Coca-Cola, valued at over $22 billion.
Coca-Cola anticipates significant growth opportunities in the future as it taps into a vast total addressable market valued at $1.3 trillion in 2022. The company anticipates its total potential marketplace to grow gradually at a mid-single-digit yearly pace as the global populace is expected to rise by about 500 million by 2030.
Apple (AAPL)
Apple is a well-known permanent investment stock that accounts for about 40% of the holdings of Warren Buffett’s Berkshire Hathaway. When Buffett shows confidence in a company by investing heavily in it, it becomes a noteworthy choice for other investors as well.
Although Apple’s stock is selling at a PTE ratio of around 31 and is close to reaching its following the pandemic spike, its record of success as a sustained winner screams for itself. Apple has produced a remarkable usual yearly return of 28% over the previous ten years, above the S&P 500’s average annual gain of 12%.
Apple reached unprecedented heights following the launch of its much-anticipated augmented reality headset, the “Vision Pro.” With a price tag of $3,499, this groundbreaking device immerses users in a captivating mixed-reality environment. It introduces unique features like app navigation controlled by eye movements, the ability to watch movies in 3D, browse photos, and indulge in immersive gaming experiences.
Apple’s strong position in the consumer tech industry makes it a frontrunner in the thriving VR/AR sector. With a growing business and promising market conditions, the company’s stock presents an enticing investment opportunity.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.
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