Top Three Berkshire Hathaway Stocks to Consider Now
Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) holds an investment portfolio that attracts attention worldwide, featuring numerous stocks and exchange-traded funds (ETFs) chosen by the legendary investor Warren Buffett. If you’re in the market for new stocks, it’s wise to see what the Oracle of Omaha is investing in.
Over the last year, Berkshire sold many stocks, increasing its cash reserves to new heights. This has led to speculation that Buffett might be preparing for a market decline. Nevertheless, Berkshire holds many stable stocks likely to deliver solid returns for long-term investors. Here are three key holdings that still deserve attention: Apple (NASDAQ: AAPL), Coca-Cola (NYSE: KO), and Amazon (NASDAQ: AMZN).
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
1. Apple
Berkshire began acquiring Apple shares in 2016. Although it sold more than two-thirds of its shares in the past year, its remaining $70 billion investment still makes up over 20% of its portfolio, making it its largest single investment.
Apple has seen its sales growth slow as it remains largely dependent on the iPhone. Yet, the company retains a powerful brand, significant pricing power, and a strong ecosystem. At the end of the latest quarter, Apple had $157 billion in cash and marketable securities, providing it with ample opportunity to invest further and acquire new businesses. The company has repurchased 35% of its shares over the last decade and raised its dividend for 13 consecutive years.
For fiscal 2025, set to end in September 2025, analysts forecast revenue and earnings per share (EPS) growth rates of 8% and 10%, respectively. This growth will be powered by steady iPhone sales, the expanding services ecosystem, and new generative artificial intelligence (AI) initiatives. Apple’s stock is priced at 30 times forward earnings, and it offers a modest forward yield of 0.5%, yet it remains a viable safe-haven choice in both bullish and bearish markets.
2. Coca-Cola
Berkshire’s involvement with Coca-Cola began back in 1988. Over the last 12 years, the company has neither bought nor sold shares, and its $26 billion stake represents 8.5% of its total portfolio, ranking fourth among its holdings.
Coca-Cola has effectively countered declining soda consumption by diversifying its offerings with bottled water, teas, juices, sports drinks, coffee, and even alcoholic beverages. The company has refreshed its classic sodas with new flavors and healthier options, allowing it to consistently grow organic sales. This performance has solidified its status as a Dividend King with 62 consecutive years of dividend increases, along with a 15% share repurchase rate over 30 years.
For 2024, Coca-Cola anticipates 10% organic sales growth, with comparable EPS projected to rise by 5-6%. Reported revenue and EPS are expected to increase 9% and 14%, respectively. Looking ahead to 2025, analysts expect 4% growth in revenue and EPS. Despite facing challenges from inflation and a strong dollar, Coca-Cola has efficiently managed these headwinds with strategic price hikes. The stock appears reasonably valued at 22 times forward earnings and offers a forward dividend yield of 3%, which could grow more attractive if interest rates decrease.
3. Amazon
Berkshire started investing in Amazon in 2019. Although it reduced its position in 2023, it still holds a $2 billion investment, contributing 0.6% to its portfolio. Amazon stands as the largest e-commerce and cloud infrastructure platform, generating significant cash flow while maintaining a competitive edge.
The pandemic led to accelerated growth for Amazon, with more consumers shopping online and companies upgrading cloud services. However, growth has eased over the past two years due to tougher economic conditions and a tapering of demand. Despite initial concerns, Amazon’s growth has steadied recently, with an uptick in e-commerce sales as it enhanced delivery speeds and increased its product offerings globally. Its cloud business also benefited as companies adapted their infrastructure for new generative AI applications.
For the current year, analysts predict Amazon’s revenue and EPS will grow by 11% and 63%, respectively. In 2025, they expect growth rates of 11% for revenue and 22% for EPS, as short-term challenges fade. While its stock may not appear cheap at 34 times forward earnings, it holds historical value and remains a leading option to capitalize on the ongoing growth of e-commerce and cloud computing.
A second chance at a potential investment opportunity
If you’ve ever felt you missed out on investing in successful stocks, you’re not alone.
- Amazon: If you had invested $1,000 when we first recommended it in 2010, you’d have $22,292!
- Apple: A $1,000 investment at our 2008 recommendation would be worth $42,169!
- Netflix: A $1,000 investment based on our 2004 recommendation would be worth $407,758!
Right now, we are identifying three incredible companies as our next “Double Down” stocks, and this may be your best opportunity to invest before it’s too late.
See 3 “Double Down” stocks »
*Stock Advisor returns as of November 4, 2024.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Amazon, Apple, and Berkshire Hathaway. The Motley Fool has positions in and recommends Amazon, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
