Plenty of the Oracle of Omaha’s picks would be at home in your portfolio as well.
He may be from a different era than you, but Warren Buffett’s investing wisdom is timeless. It can just take some time to realize that having patience with his style of stock-picking eventually pays off.
With that in mind, if you’ve got $3,000 worth of idle cash sitting in your portfolio right now, here are three stocks currently held in Berkshire Hathaway‘s portfolio that would be great long-term investments for you as well.
Apple
It’s such a commonly suggested stock pick that it has almost become cliché. Nevertheless, there’s a reason Apple (AAPL 0.51%) is still Berkshire’s single-biggest holding despite Buffett’s recent sale of nearly half of the fund’s position in the company: Its long-term growth prospects remain attractive.
Yes, this attraction has everything to do with the recently unveiled and soon-to-be-delivered iPhone 16, which has enough internal processing power to handle some generative AI tasks natively on the device (as opposed to sending that heavy computing to cloud servers, where most artificial intelligence processing happens now). While the iPhone 16 won’t technically be the world’s first AI-capable smartphone, it’s arguably the one the world is most excited about. After all, iPhones are the world’s most popular smartphones.
In true Apple-esque fashion, the company is also wisely making it easy for iPhone users to get the most out of this functionality. The Apple Intelligence software necessary to turn newer iPhones and iPads into full-blown artificial intelligence devices will become available next month, offering services like auto-writing, photo enhancement, and a sharply improved Siri digital assistant.
The time has never been more ripe for such a product from such a respected brand. Technology market researcher IDC predicts the number of AI-capable smartphones will swell from roughly 230 million this year to more than 900 million in 2028, when they’ll account for more than two-thirds of the smartphone market. Apple is positioned to capture at least its fair share of this segment.
Of course, in a world with even more iPhone owners who are even heavier users of those devices, Apple’s high-margin services business (apps, music, video) can be expected to continue growing too.
Chevron
It would be understandable to think that oil giant Chevron (CVX -1.38%) doesn’t have much of a future. Fossil fuels are harmful to the environment, after all, and cleaner alternatives like solar are now both available and price-competitive.
It’s too soon to count Chevron out just yet, though.
While alternative energy sources are viable, transitioning to them for a majority of the world’s energy needs won’t be a multiyear project. It will be a multidecade project, and even as new green power generation is brought online, the overall need for power keeps growing. Standard & Poor’s reports the world used a record-breaking amount of fossil fuel in 2023, largely because oil and natural gas are proven, and their infrastructure is in place right now. Indeed, the U.S. Energy Information Administration believes that — unless there’s a shift in current consumption trajectories — oil will remain the planet’s top source of energy as far down the road as 2050. That jibes with outlooks from Goldman Sachs and OPEC.
While stagnant crude prices may have capped Chevron shares since early 2022, the company’s still making plenty of money, reliably generating annual net income on the order of $20 billion. When oil prices are inflated like they were in 2022, the company’s bottom line explodes.
There’s not a ton of growth in the cards for Chevron, to be clear. It’s mostly just a cash-generating operation that supports strong, reliably growing dividends.
However, given the stock’s forward dividend yield of 4.5% and the company’s payout-hiking track record, that’s a fair trade-off. As of this year, not only has the company paid its quarterly dividend like clockwork for decades, it has raised its yearly payout in each of the past 37 years. That streak isn’t likely to end anytime soon.
As of its last report on its portfolio, Berkshire Hathaway was holding 118.6 million shares of Chevron, which are now collectively worth roughly $17.4 billion.
Coca-Cola
Last but not least, add The Coca-Cola Company (KO -0.07%) to your list of Buffett stocks to buy with $3,000 right now.
We all know Coca-Cola as a beverage brand, but those who are also somewhat familiar with it as an investment are probably aware that the stock’s long bullish march since it touched a 20-plus year low in 2009 has left it priced richly at 25 times this year’s projected earnings of $2.85 per share and nearly 24 times next year’s expected earnings of $3.04 per share. That’s not cheap compared to most other consumer goods stocks.
But, as Buffett has said, his general investment philosophy is that “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Coca-Cola is undoubtedly a wonderful company, even if its current stock price is merely fair. Sometimes you just have to pay a premium for quality that’s worth buying and holding.
That quality is, of course, rooted in the company’s market leadership. Not only is its namesake cola the most popular carbonated beverage on the planet, but The Coca-Cola Company also owns an array of other familiar brands including Dasani water, Gold Peak tea, Minute Maid juices, and Powerade sports drinks. This wide range of offerings gives it and its production and distribution partners a great deal of leverage when it comes to getting products placed prominently in stores.
Of course, grocers and convenience stores are also more than happy to carry and feature Coca-Cola’s goods, knowing the organization is also brilliant and effective when it comes to marketing, which helps ensure that consumers will keep purchasing them.
It’s not just this persistent dominance of the beverage industry, however, that has inspired Buffett’s 400 million share position in Coca-Cola. (That makes it Berkshire Hathway’s fourth-biggest stock holding, by the way, worth $28.6 billion.) Like Chevron, this company is doing something that shareholders appreciate — generating reliable income that supports its dividend and drives persistent payout growth. Coca-Cola has now raised its payout every year for 62 consecutive years.
Those who buy the shares now will be plugging in while its projected dividend yield stands at a little over 2.7%.