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Got $1,000? 5 Buffett Stocks to Buy and Hold Forever

Aditya Raghunath
·4 min read
calculate and analyze stock
Image source: Getty Images

Written by Aditya Raghunath at The Motley Fool Canada

Warren Buffett is arguably the greatest investor of all time. Among one of the richest individuals globally, Buffett made his fortune investing in the stock market.

Buffett is a value investor, which means he identifies companies trading at a price lower than their intrinsic value, allowing the Oracle of Omaha to benefit from outsized gains over time. Given his stellar record, every investment made by the mogul is closely followed by Wall Street.

Here are five Warren Buffett stocks you can consider buying right now. Each stock listed here is part of Warren Buffett’s Berkshire Hathaway portfolio.

Amazon stock

One of the largest companies in the world, Amazon (NASDAQ:AMZN) is part of multiple growth markets. Globally, it is the largest e-commerce platform, the largest public cloud infrastructure company, and the third-largest digital advertiser.

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Amazon has already delivered game-changing returns to shareholders in the past two decades and trades at 42 times forward earnings, which might seem steep. However, analysts expect the tech giant to improve its profit margins from a loss per share of US$0.27 in 2022 to adjusted earnings per share of US$3.61 in 2024.

American Express stock

American Express (NYSE:AXP) is a credit card company that has been part of Buffett’s portfolio for more than three decades. Over the years, American Express has targeted a premium audience of high earners and spenders, allowing it to return 130% to shareholders in the last 10 years after adjusting for dividends.

Priced at 14.6 times forward earnings, AXP stock is quite cheap, given its forecast to expand earnings by 14.3% annually in the next five years.

Chevron stock

An energy heavyweight, Chevron (NYSE:CVX) also offers you a tasty dividend yield of 4.2%. With large-scale operations in some of the most important oil and gas geographies, Chevron can help diversify your portfolio.

Its dividend yield is backed by cash-generating assets, allowing the company to report US$5.7 billion in adjusted earnings in the third quarter (Q3) of 2023. Chevron recently disclosed its intention to acquire Hess for US$53 billion and expects the transaction to turn cash-flow accretive by 2025.

Chevon has raised dividends for 36 consecutive years, which is exceptional for an energy stock. In this period, the payouts have risen by 6.6% annually.

Coca-Cola stock

Coca-Cola (NYSE:KO) is one of the largest holdings of Warren Buffett. Armed with a wide competitive moat, Coca-Cola is among the most recognizable brands globally, allowing it to generate predictable cash flows and pay shareholders a dividend yield of 3.3%.

Further, these payouts have risen for 61 consecutive years, showcasing the resiliency of the company’s cash flows.

In 2023, Coca-Cola paid an annual dividend of US$1.84 per share and is on track the payout again this year.

Mastercard stock

The final Warren Buffett stock on my list is Mastercard (NYSE:MA), which has already returned over 450% to shareholders since January 2014.

Valued at US$450 billion by market cap, Mastercard is the second-largest payments processing company in the world. While Mastercard is part of a cyclical industry, it has taken advantage of extended periods of economic expansion, which has driven consumer spending higher.

Further, Mastercard is not part of the lending sector, shielding it from headwinds such as higher interest rates and credit delinquencies.

Priced at 30 times forward earnings, Mastercard stock remains the top investment choice at the current price.

The post Got $1,000? 5 Buffett Stocks to Buy and Hold Forever appeared first on The Motley Fool Canada.

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American Express is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Amazon, Berkshire Hathaway, Chevron, and Mastercard. The Motley Fool has a disclosure policy.

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