Warren Buffett has a great talent for growing piles of money. As CEO of Berkshire Hathaway , he delivered an extraordinary 4,384,748% return to shareholders over the last 59 years, which works out to an annualized return of 20% -- double the S&P 500 's return.
If you have $300 to invest right now, you could do a lot worse than selecting a few stocks from Berkshire's $284 billion stock portfolio. It's filled with industry-leading businesses that benefit from durable competitive advantages -- one of the things Buffett looks for in every investment.
Here are two solid Buffett-approved stocks to invest in right now.
1. Amazon
Amazon (NASDAQ: AMZN) is a relatively small position for Berkshire Hathaway, with the company holding 10 million shares in the second quarter worth about $1.8 billion at current share prices. Berkshire has held a position in the online tech titan since 2019.
Amazon benefits from a wide economic moat . It has over 200 million Prime members, profitable revenue streams from advertising and subscription services, and the leading enterprise cloud service in Amazon Web Services.
The common denominator that explains its success in retail and cloud computing is the company's customer-focused culture. When businesses were pulling back on cloud spending in 2022, Amazon helped those companies get the most out of their cloud budget. This goes a long way in building long-term relationships with these customers, and it appears to be paying off with AWS revenue growth accelerating in 2024.
Amazon is a very large business with $604 billion in revenue across all segments, but it can still grow for years. This is noted by the AWS segment's 19% year-over-year growth in revenue last quarter, which makes up most of the company's operating profit, not to mention a growing $6 trillion global e-commerce market, according to eMarketer.
The stock currently trades at around $176, so an investor with $300 can easily afford to buy one share of this outstanding growth stock.
2. Coca-Cola
Berkshire Hathaway is one of Coca-Cola 's (NYSE: KO) largest shareholders. It owns 9% of the company's shares outstanding, and it's one of Buffett's longest-held investments in Berkshire's stock portfolio. Buffett originally bought Coke stock over 35 years ago, and shares now total 400 million after several stock splits.
Coca-Cola's competitive advantage is based on its powerful consumer brand. People consume 800 billion servings of the company's brands every year. That number should increase as Coca-Cola continues to push for more growth across emerging and developed markets.
The beverage king spends over $7 billion annually in marketing expenses. Coca-Cola owns 200 brands, including Sprite, Minute Maid, and Powerade, providing ample sales opportunities in a global non-alcoholic beverage market valued at $1.5 trillion, according to Statista.
Selling relatively affordable products in mass volume is a very profitable business. Most of the company's revenue comes from selling concentrate, or syrup, to bottlers to create the finished product. This is why Coca-Cola earns a stellar 23% profit margin.
Coca-Cola has reported a series of strong earnings reports this year that have pushed the stock to new highs. The shares currently trade around $72, but the company's above-average dividend yield of 2.69% suggests it is still reasonably priced to earn satisfactory returns over the long term.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $656,938 !*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns as of September 3, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Berkshire Hathaway. The Motley Fool has a disclosure policy .
Local News
Comments / 0