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

Here are five stocks favoured by the world’s most successful value investor.

close-up photo of investor Warren Buffett

Image source: The Motley Fool

Warren Buffett is among the most successful investors in the world. Buffett and his holding company Berkshire Hathaway have consistently delivered outsized returns to long-term investors.

Also called the Oracle of Omaha, Buffett’s investments are watched closely by Wall Street. Here are five Warren Buffett stocks to buy and hold forever with just $1,000.

Apple stock

The largest company in terms of market cap, Apple (NASDAQ:AAPL) is a diversified tech behemoth. While the iPhone still accounts for 50% of total revenue, its high-margin Services business is the key driver of profits.

For example, the Services segment reported sales of US$21.2 billion in the June quarter, which was around 26% of total sales. But its net profits accounted for 40% of the bottom line. Services include several subscription solutions such as Apple Music, Apple Care, Apple Arcade, and Apple TV+, allowing the tech giant to successfully monetize its installed base of over 1 billion users.

Apple stock accounts for over 45% of Berkshire Hathaway’s portfolio.

American Express stock

Valued at a market cap of US$122 billion, American Express (NYSE:AXP) is one of the largest financial services companies today.

Due to rising interest rates, American Express increased net interest income by 32% year over year to US$3.1 billion in Q2 of 2023. With 138 million active credit cards, American Express also processed US$427 billion in payment volume on its platform.

Priced at 15 times forward earnings, AXP stock is very cheap and forecast to increase earnings per share by 14.8% annually in the next five years.

Coca-Cola stock

One of the most recognizable brands, Coca-Cola (NYSE:KO) is valued at a market cap of US$265 billion. Coca-Cola has a portfolio of over 200 brands, 26 of which generate more than US$1 billion in annual sales.

The retail heavyweight continues to expand organically and enter new markets, such as hot and sparkling beverages and juices, allowing it to expand its total addressable market from US$650 billion in 2017 to US$1.3 trillion in 2022.

Additionally, it also pays shareholders an annual dividend of US$1.84 per share, indicating a yield of 3%.

Chevron stock

Chevron (NYSE:CVX) is the third-largest oil stock, with operations in more than 180 countries. Valued at a market cap of US$300 billion, Chevron pays shareholders an annual dividend of US$6.04 per share, translating to a yield of 3.8%.

Despite falling oil prices, Chevron’s low-cost operations will allow it to maintain and even increase dividends in 2023, reduce balance sheet debt, and pursue growth projects in the future.

While it is part of the highly cyclical energy sector, Chevron has increased dividends for 36 consecutive years, showcasing the resiliency of its business model.

Kroger stock

The final Warren Buffett stock on my list is Kroger (NYSE:KR), a top U.S.-based grocery chain. Part of a recession-resistant sector, Kroger reported sales of US$45.2 billion in the quarter ended in April, an increase of 1.3% year over year.

Kroger recently increased dividends by 11% to US$0.29 per share, indicating a yield of 2.33%. With a payout ratio of less than 30%, Kroger can easily increase dividends in the future while expanding in other markets.

The Foolish takeaway

Each of the five Warren Buffett stocks are large-cap giants that enjoy wide economic moats, stable cash flows, and dividend payments. Further, these companies are part of different sectors allowing you to diversify your portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

American Express is an advertising partner of The Ascent, a Motley Fool company. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Apple, Berkshire Hathaway, Chevron, and Kroger. The Motley Fool has a disclosure policy.

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