Warren Buffett is considered the GOAT of investing because he is a no-nonsense investor. He doesn’t go by trends or follow the herd. Instead, he looks for competitive advantages in a company or its overall potential to ensure he never loses money.
These companies, past and present, should be honoured that the GOAT bought their shares. Today, an American mega-cap tech stock remains his undisputed top holding. While his conglomerate no longer owns Canadian stocks, one name is still synonymous with Warren Buffet.
Apple Inc. (NASDAQ: AAPL) and Restaurant Brands International (TSX: QSR) are the stocks to buy now if you want to adopt Buffett’s investment strategy and philosophy. Both companies are ideal for long-term or value investors.
One of the best businesses
Buffett views Apple as having one of the best businesses in the world. He adds that none of the businesses owned by Berkshire Hathaway are better than the tech giant. The legendary investor is shrewd but conservative, so tech startups don’t appeal to him.
With its US$3 trillion market cap, Apple is a market mover and rock-solid investment. The 1,031.6% (27.4% CAGR) total return in 10 years lends confidence to invest in the stock. Based on Berkshire’s latest 13F filing (as of September 30, 2023), Apple holdings represent 48% (US$178.5 billion/915.5 million shares) of the total portfolio. Bank of America is a far second at 9.1%.
In fiscal 2023, total net sales and net income declined by an identical 2.8% to US$383.3 billion and US$96.9 billion versus fiscal 2022. In Q4 fiscal 2023, net income rose 10.8% year over year to US$23 billion. Also, Apple usually maintains a large cash pile annually. At the close of fiscal 2023, the cash on hand is US$162.1 billion.
Apple CEO Tim Cook said the iPhone posted a September-quarter revenue record, while Services’ revenue for the quarter reached US$22.3 billion, a new all-time record. Cook adds that the strongest products include the iPhone 15 lineup and the first carbon-neutral Apple Watch models.
Winning investment
Buffet was a long-time investor of RBI, the mother company of Burger King, Tim Hortons, Popeyes, and Firehouse Subs. He started amassing shares of the quick-service restaurant chain in 2014 until the government-mandated lockdown prompted him to unload all his shares in Q2 2020.
Nonetheless, the Canadian stock recovered remarkably from the pandemic with only minimal losses in 2020 and 2021. QSR stormed back and was a winning investment in 2022 (+14.2%) and 2023 (+18.2%).
The latest news is that the $46 billion firm acquired Carrols Restaurant Group, its largest Burger King franchise in the US, for $1 billion. According to Tom Curtis, President of BK US and Canada, the acquisition is an exciting accelerator to its “Reclaim the Flame” plan. The restaurants will undergo remodelling over the next five years.
Durable earnings
Warren Buffett invests in companies with a proven history of earnings. As of this writing, Apple trades at US$191.56 per share and pays a 0.50% dividend. However, Canadians investing in Apple should hold the shares in a Registered Retirement Savings Plan (RRSP) to avoid paying the 15% withholding tax. As of this writing, QSR trades at $103.27 per share and pays a decent 2.84% dividend.
