3 Warren Buffett Stocks to Hold Forever

He’s no longer Berkshire Hathaway’s (BRKA +0.43%) (BRKB +0.45%) chief stock-picker. But Warren Buffett’s proven stock-picking approach lives on through the decades of investing wisdom he’s passed along while CEO of the conglomerate, as well as the fact that many of Berkshire’s current picks were added to its holdings while Buffett was still at the helm.

To this end, here are three Warren Buffett stocks currently in Berkshire’s portfolio that you can feel good about buying and holding forever.

Image source: Getty Images.

1. Coca-Cola

It’s not just one of Berkshire Hathaway’s biggest positions. The Coca-Cola Company (KO +0.59%) is also one of Berkshire’s oldest – the 400-million-share position in the beverage giant first began being established all the way back in the mid-1990s.

It’s not difficult to see what the Oracle of Omaha liked about Coca-Cola at the time. As is still the case now_,_ the company was dominating the drinks space thanks to plenty of clever lifestyle marketing. And perhaps more important to Buffett, also like now, back then The Coca-Cola Company was already dividend royalty; as of this year it’s now raised its annual per-share payout for 64 consecutive years.

For perspective on just how much Coca-Cola has been a boon for Berkshire’s stock portfolio, since the position was first opened back in 1994, KO shares have advanced from a split-adjusted price of around $10 apiece to more than $77 now. Its quarterly dividend payment has also grown from just under $0.20 per share then to its current quarterly payment of $0.53 per share during this three-decade stretch. This holding now generates nearly $900 million worth of annual cash payments for Berkshire.

And none of these dividend payments have ever been reinvested. This reliable cash flow is used in other ways that are just as important to Berkshire’s enduring success.

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NYSE: KO

Coca-Cola

Today’s Change

(0.59%) $0.46

Current Price

$77.80

Key Data Points

Market Cap

$335B

Day’s Range

$77.73 - $78.42

52wk Range

$65.35 - $82.00

Volume

45

Avg Vol

18M

Gross Margin

61.75%

Dividend Yield

2.65%

It’s unlikely this company will be able to do quite as well for shareholders in the foreseeable future as it has in the past. The beverage business has become even more crowded and competitive than it was then. Plus, consumers’ health-minded dietary preferences are taking their toll.

Even so, a challenged Coca-Cola Company is still a more solid consumer staples holding than plenty of other companies in the prime of their existence.

2. Visa

Credit card company Visa (V +0.92%) has never been one of Berkshire’s bigger holdings. The 8.3-million-share position is “only” worth about $2.5 billion right now. That’s less than 1% of the value of Berkshire Hathaway’s entire stock portfolio, and less than_ half_ of 1% of the entirety of Visa itself.

Still – much like its long-lived stake in Coca-Cola – it’s telling that Berkshire has stuck with Visa for well over a decade.

But is it right for you?

Well, there’s certainly not much not to like about it. The company’s moving well beyond being a mere credit card middleman, after all. Debit cards, business-oriented services like data intelligence, and customer loyalty program support are all in its wheelhouse as the world continues to move away from cash and toward one that leverages customized digital money solutions. That’s how Visa was able to report an 11% increase in revenue last fiscal year despite a mere 8% increase in total payments volume, and only a 9% uptick in the total number of transactions it processed.

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NYSE: V

Visa

Today’s Change

(0.92%) $2.81

Current Price

$309.95

Key Data Points

Market Cap

$591B

Day’s Range

$307.38 - $311.11

52wk Range

$299.00 - $375.51

Volume

62

Avg Vol

7.7M

Gross Margin

78.02%

Dividend Yield

0.81%

It’s increasingly a company that consumers and corporations alike count on just being there in the background and handling all the small money-related logistics. All of it generates revenue, as well as deepens its customers’ dependency on what it offers.

In this vein, then, perhaps the real appeal of owning a stake in Visa is the fact that it achieves reliably consistent growth regardless of the economic environment.

3. Berkshire Hathaway

Last but not least, if you simply want to copy what Warren Buffett does, just buy shares of Berkshire Hathaway itself. In fact, that would be the easiest way – and maybe the only way – to mirror the entirety of the Oracle of Omaha’s stock picks.

Given the way the world talks about “Buffett stocks” it would be easy to forget that he doesn’t personally own the stocks in question. Rather, the stocks being discussed are the ones held by Berkshire. He just helped pick them.

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NYSE: BRKB

Berkshire Hathaway

Today’s Change

(0.45%) $2.18

Current Price

$492.21

Key Data Points

Market Cap

$1.1T

Day’s Range

$491.08 - $496.63

52wk Range

$455.19 - $542.07

Volume

875

Avg Vol

4.9M

Gross Margin

23.63%

That doesn’t mean he doesn’t have a personal vested interest in the companies being discussed – quite the opposite, actually. See, Warren Buffett is also Berkshire Hathaway’s single biggest individual shareholder, sitting on more than 200,000 “A” shares of the conglomerate. That’s roughly 15% of the $1 trillion company, or roughly $150 billion worth. While he may also own individual stocks beyond his position in the company he led for decades, his personal Berkshire holding does appear to account for the vast majority of the man’s reported total net worth.

More important to you, simply holding a position in Berkshire Hathaway not only negates the need for figuring out which Buffett picks you might want to buy for yourself, but it also automatically updates your holdings whenever the conglomerate’s current managers decide to make any changes to its stock portfolio. And arguably best of all, holding a position in this company allows you to own a stake in dozens of other companies that aren’t publicly traded, like Dairy Queen, Fruit of the Loom, Pilot Travel Centers, Shaw flooring, and Duracell, just to name a few. It truly is a “buy and hold it forever” kind of investment.