If any investor has stood the test of time, it is Warren Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world, and his annual Berkshire Hathaway shareholders meeting draws thousands of loyal fans who are investors. Long-time investors and Buffett mavens are familiar with this quote, “His favorite holding for an S&P 500 stock is forever.” So it’s not surprising to report that for all the success and stature Berkshire Hathaway has in the investment world, seven top companies make up almost 75% of the funds’ total holdings.
Berkshire Hathaway has a long history of beating the market. Over the past 20 years, it delivered an average annual return of 12.1%, compared to the S&P 500’s 11.5%. So, the fact that it is outperforming the benchmark S&P 500 again should be no surprise. While much more concentrated than most portfolio managers would consider, the strategy has worked for Berkshire Hathaway investors for years and likely will continue to do so.
We screened the Berkshire Hathaway holdings looking for the safest stocks, and four are perfect ideas for growth and income investors looking for companies that are whipsawed during volatility like we have seen recently. Four top companies that pay solid and dependable recurring dividends are great ideas now.
Why do we cover Warren Buffett stocks?
There are few investors with the results and the reputation Buffett has garnered over the last 50 years, and while investing has changed over the previous half-century, buying good companies with products and services that are known worldwide while paying dividends will always stay in style.
Coca-Cola
This company remains a top long-time Buffett holding. He owns a massive 400 million shares. Coca-Cola Co. (NYSE: KO | KO Price Prediction) is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands.
Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands, including:
- Diet Coke
- Coca-Cola Light
- Coca-Cola Zero Sugar
- Caffeine-free Diet Coke
- Cherry Coke
- Fanta Orange
- Fanta Zero Orange
- Fanta Zero Sugar
- Fanta Apple
- Sprite
- Sprite Zero Sugar
- Simply Orange
- Simply Apple
- Simply Grapefruit
- Fresca
- Schweppes
- Dasani
- Fuze Tea
- Glacéau Smartwater
- Glacéau Vitaminwater
- Gold Peak
- Ice Dew
- Powerade
- Topo Chico
- Minute Maid
Globally, the company is the top provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks.
Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of more than 1.9 billion servings a day. It’s also important to remember that the company owns 16.7% of Monster Beverage, which continues to deliver big numbers.
UBS has a Buy rating with a $78 target price.
Diageo
Diageo PLC (NYSE: DEO) is a British multinational alcoholic beverage company with its headquarters in London. It is one of the largest producers of alcoholic beverages in the world.
It offers:
- Scotch whiskey, gin, vodka, rum, beer and spirits
- Irish cream liqueurs,
- Wine, Raki, tequila, Canadian and American whiskey
- Cachaça, and brandy, as well as adult beverages and ready-to-drink products
The company’s premium brands comprise Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray, and Guinness.
Its reserve brands include:
- Johnnie Walker Blue Label
- Johnnie Walker Green Label
- Johnnie Walker Gold Label 18-year-old
- Johnnie Walker Gold Label Reserve
- Johnnie Walker Platinum Label 18-year-old
- John Walker & Sons Collection
- Johnnie Walker The Gold Route
- Johnnie Walker The Royal Route
Johnnie Walker super premium brands: The Singleton, Cardhu, Talisker, Lagavulin, and others.
BofA Securities has a Buy rating with a $136 target price.
Domino’s Pizza
This is a stock that Buffett bought in 2024. Domino’s Pizza Inc. (NASDAQ: DPZ) is a company that operates a significant business in both delivery and carryout pizza.
The company operates through three segments:
- U.S. stores
- International franchise
- Supply chain
The U.S. stores segment is primarily comprised of franchise operations, consisting of franchised stores in the United States. The segment also operates a network of United States company-owned stores.
The international franchise segment primarily includes operations related to the company’s franchising business in foreign markets.
The supply chain segment primarily includes the distribution of food, equipment, and supplies to stores from the company’s supply chain center operations in the United States and Canada. Its Pinpoint Delivery technology allows customers to receive a delivery nearly anywhere, including parks, baseball fields, and beaches.
Domino’s Pizza is a public restaurant brand with a global enterprise of more than 20,500 stores in over 90 markets.
Loop Capital has a Buy rating and a large $550 price objective.
Kraft Heinz
Even in bad times, everybody has to eat, and this Buffett pick always stands to benefit. Kraft Heinz Co. (NYSE: KHC) was formed via the merger of H.J. Heinz and Kraft Foods. It is the third-largest food and beverage company in North America and the fifth-largest in the world.
The company is a leading global food company with estimated annual revenues of $25 billion from well-known brands such as Kraft, Heinz, Oscar Meyer, and Maxwell House.
Kraft Heinz derives 76% of its revenues from that market and 24% from the International segment.
The company’s additional brands include:
- ABC
- Capri Sun
- Classico
- Jell-O
- Kool-Aid
- Lunchables
- Ore-Ida
- Philadelphia
- Planters
- Plasmon
- Quero
- Weight Watchers
- Smart Ones
- Velveeta
JP Morgan has a Neutral rating with a $31 target price.
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