Key Points
Coca-Cola is a dividend giant, having raised its payout to investors for more than 50 years.
American Express is a well-established powerhouse that’s still delivering significant growth.
10 stocks we like better than Coca-Cola ›
Any investor would love to follow in Warren Buffett's footsteps, choosing stocks that over time will create a billion-dollar portfolio. The storied investor manages more than $257 billion in securities at the helm of Berkshire Hathaway and has generated market-beating returns over almost 60 years.
While our portfolios may not hit the $1 billion mark, I have good news for you: Following some of Buffett's moves could help lift the value of your portfolio and shepherd you along the path to wealth. This means adding some of Buffett's investing principles to your own strategy -- for example, a focus on long-term investing -- and including a couple of his favorite stocks in your portfolio.
So, let's get started by considering two players the billionaire has owned for decades: Coca-Cola (NYSE: KO) and American Express (NYSE: AXP). In Buffett's 2023 shareholder letter, he wrote: "During 2023, we did not buy or sell a share of either AMEX or Coke -- extending our own Rip Van Winkle slumber that has now lasted well over two decades. Both companies again rewarded our inaction last year by increasing their earnings and dividends."
These have been players Buffett has relied on over time. Now the question is, if you could buy only one today, which one should you choose? Let's find out.
Image source: Getty Images.
The case for Coca-Cola
Buffett is known to drink Coca-Cola's eponymous beverage every day, and he isn't the only one. The company is the world's biggest maker of nonalcoholic beverages and has a fantastic moat, or competitive advantage -- this is its brand strength as well as its global distribution network. Buffett loves moats, as these may ensure a company's market position and therefore earnings strength over time.
Coca-Cola isn't a high-growth player, with revenue climbing only 1% in the recent quarter, but over a period of years, the company has been reliable, progressively increasing revenue and net income.
And though Coca-Cola is most known for Coca-Cola and variations such as Diet Coke, the company owns a variety of popular drinks, from Fuze Tea to Minute Maid juices. Meanwhile, the beverage giant also innovates according to the tastes of different countries to drive growth and uses data to offer drink sizes and formats that appeal to specific markets too. This should keep the company on the right path as the overall market evolves.
[SRC] https://finance.yahoo.com/news/better-warren-buffett-buy-coca-080400404.html
