Warren Buffet Holds Stakes in 6 Dow Jones Companies. These Are the Top Picks for Revenue-Oriented Investors to Acquire Immediately.
Warren, the investment guru behind Berkshire Hathaway, tends to invest in large-cap stocks for their ample financial resources. Given Berkshire's financial muscle, smaller firms may not significantly impact their portfolio. As a result, it's no shocker that Warren holds six Dow Jones Industrial Average (DJIA) stocks, with Coca-Cola and American Express among the earliest acquisitions.
Buffett has a soft spot for Coca-Cola, purchased back in 1988, and American Express, entered in 1991. Both of these stocks are akin to 'eternal' ones for Warren. In his letter to Berkshire Hathaway shareholders, he designated them as stocks he intends to maintain indefinitely. On the other hand, while Apple isn't included in his indefinitely maintained list, during a 2024 CNBC interview, Warren praised Apple, even though it doesn't feature as a 'forever' stock in his letters.
Apple ranks top in Berkshire's portfolio with Chevron trailing closely. Interesting to see, Chevron was also bought aggressively by Warren in the final quarter of 2020, in the wake of the COVID-19 pandemic's devastating impact on the oil market. The remaining two Dow Jones Industrial Average stocks in Buffett's portfolio, Amazon and Visa, contribute less than 1% to Berkshire's collective.
Over the past 12 months, American Express has seen an astounding 70% growth in its shares, making it the top performer among Buffett's Dow stocks. Closely following is Amazon with over 45% growth. All the remaining stocks, except Coca-Cola, have reported double-digit growth. However, in terms of valuation, American Express falls below the forward P/E ratios of its competitors.
Amazon reported earnings of $15.3 billion in the latest quarter, an impressive leap of 55%. Unfortunately, none of the other Dow index stocks come close to Amazon's growth. Coca-Cola, a perennial favorite among analysts, has a consensus 12-month price target suggesting a potential upside of 15%.
Now, down to the crux – if income is what you seek, Chevron and Coca-Cola emerge as the leading contenders, with Chevron presenting a higher yield of 4.05%. The energy major has an impressive record of 37 years of dividend increases, setting itself apart as a 'Dividend Aristocrat'. Meanwhile, Coca-Cola, with its 62-year strong dividend streak, is rightfully titled a 'Dividend King'.
In conclusion, whether you opt for Chevron or Coca-Cola, you're guaranteed a solid income flow. However, Chevron's higher dividend yield might give it an edge in this scenario.
Warren's investment strategy often involves focusing on the financial stability of companies, as shown by his preference for large-cap stocks like Coca-Cola and American Express, which have provided him with ample returns over the years. Given the substantial growth of American Express' shares by 70% in the past 12 months, it becomes an attractive option for investors seeking profitable finance opportunities through investing.
