The 3 Best Warren Buffett-Owned Stocks to Buy Right Now

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Warren Buffett is the chairman and CEO of Berkshire Hathaway ( NYSE:BRK-B ), but is perhaps best known for being among the greatest investors of all time. Indeed, any investor that can smash the returns of the S&P 500 over a multi-decade period is worthy of such accolades. And Buffett has done just that, leading Berkshire to a 19.8% annual return since 1965. Such returns would have transformed a $1,000 investment back then into over $42.5 million today. Indeed, it would pay to have a Time Machine right now, given that the same investment in the S&P 500 would have yielded around $330,000 over the same time frame.

The power of compounding is a real thing, and Buffett has done a great job of maximizing gains during up years, but more importantly limiting losses during previous crashes.  He's previous called himself the "chief risk officer" of Berkshire Hathaway, and his recent sales of Apple and Bank of America suggest Buffett is among the most bearish he's been in a very long time.

With Berkshire's cash pile now above $275 billion and growing, this is a company with plenty of dry powder to deploy during the next crash. Warren Buffett appears to see something we don't, in this regard.

But for those looking to follow in his footsteps with what he's sticking with right now, here are three of the best Buffett-owned stocks I think are still worth adding.

Key Points About This Article:

• Warren Buffett has been in selling mode of late, increasing his cash pile as recession fears are clearly bleeding into his calculus for where the market may be headed.
• That said, there are a few stocks I don't think he's likely to sell during this market cycle - here are the top three in this regard.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report . It features a software stock we’re confident has 10X potential.

Berkshire Hathaway (BRK-B)

An image of a Burlington Northern Santa Fe Railroad train, which is owned by Berkshire

Berkshire Hathaway better be atop the list of long-term Buffett stocks to buy and hold. Indeed, as far as the stock Buffett has most consistently bought over the years, BRK-B would certainly top the list. Warren Buffett's penchant for stock buybacks is notable. And though he owns plenty of dividend-paying stocks in his portfolio, for his shareholders, he prefers stock buybacks as a capital return delivery method for tax reasons.

Now, while the market has clearly run higher in recent months providing Berkshire with a $1 trillion market cap , it's likely that even Warren Buffett may trim his buybacks in the coming quarters. With everything seemingly overvalued in face of heightened recession risks, I'd expect to see Berkshire's cash position continue to grow.

Thus, for investors seeking a safe haven to hide out in amid what could be a very volatile few quarters ahead, this would be a top pick of mine. The company's focus on providing long-term value for shareholders is on display once again here, with Berkshire's focus on generating cash ahead of what could be an incoming recession another great example of how he can time longer-term trends very accurately.

Coca-Cola (KO)

A tin of Coca-Cola with a brick wall background

Coca-Cola ( NYSE:KO ) is best known as a world-class beverage brand. However, the consumer discretionary giant is actually the owner of more than 200 brands, including Powerade, Minute Maid, Costa Coffee, and Dasani, among many others. The company's diverse product lineup appeals to changing consumer preferences, with many leaders in their categories. Indeed, it's my view that Coca-Cola’s strength lies in its mastery of marketing, with its flagship brand a pop culture icon. Furthermore, Coca-Cola's size itself provides a relative competitive edge against rivals, putting up clear barriers to entry for those looking to get into this game.

The company's organic revenue growth profile has once again improved from the Covid era. In 2021 and 2022, revenue rebounded 16% each year from a one-year drop of nearly 10% in 2020. This strong growth has continued into 2023 and 2024, though this year's number is expected to slow considerably. For a company of Coca-Cola's size, that's understandable.

However, on the operating margin front, marked improvements (margins expanded to 29.1% from 28.7% last year) drove EPS growth of 8% this past year. Assuming high-single-digit earnings growth moving froward, the company's current dividend yield of 2.7% appears to remain solid, with outsized potential for further distribution hikes in the future.

Coca-Cola's simple business model continues to drive strong financials, and is a clear reason why Warren Buffett and so many other investors love this brand.

Chubb (CB)

Chubb logo

Berkshire Hathaway recently invested in Chubb ( NYSE:CB ) for the first time, so I thought I'd put this insurance company on this list of Buffett-owned stocks to buy. Indeed, finding one of his most recent purchases, and diving into said purchase, certainly makes sense for investors looking to see what's worth buying in this market.

Now, it's worth pointing out that Buffett has been a long-time believer in the insurance business. Insurance companies receive premiums from its customer base up front, and pay out claims down the line. So, as long as an insurance company like Chubb has a strong actuarial team that knows how to do math in its back office, and can invest those funds for a reasonable return over time, investors can benefit both from operational skill and investment returns over a very long time.

The compounding effects of such well-managed insurers can be impressive over very long periods of time. Buffett's investment in Chubb does suggest this insurer is among the best-managed in this space (he knows a thing or two about taking over insurance companies, so that's always a possibility down the line). Accordingly, this stock is on my watch list right now on this basis alone, but I intend to do a deeper dive into this stock as well over the coming weeks.

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