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Warren Buffett And your company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) You don’t need any introduction. Between 1965 and 2023, Berkshire’s stock generated a total gain of 4,384,748%, or a compound annual gain of 19.8%. During the same period, the broader benchmark S&P 500 including dividends generated a total gain of 31,223%, or a compound annual growth rate (CAGR) of 10.2%. This domain is one of the many reasons why investors Revere Buffett and Berkshire.
While you should never invest without doing your due diligence, you can follow Berkshire’s portfolio for investment ideas or to test your thesis if Berkshire buys or sells a stock that you might otherwise have done otherwise. Here are Buffett’s best stocks to buy with $1,200.
Berkshire first bought Coke (NYSE: KO) In the 1980s, and it has been a big winner over the many decades that Berkshire has owned the stock. Coca-Cola is Berkshire’s fourth-largest position and makes up 8.4% of the conglomerate’s equity portfolio.
Why does Buffett love Coca-Cola so much? The dividend. In Berkshire’s 2022 letter to shareholders, Buffett wrote that the dividend Berkshire received from the company in 1994 was $75 million. By 2022, that dividend had grown 838% to $704 million. Today, Coca-Cola’s dividend yield is approximately 3.1%. The company has increased its dividend for an astonishing 62 consecutive years, placing it in an exclusive club known as dividend kings. This is easy, reliable for Berkshire and money checks every year.
Coca-Cola stock has not performed well in recent years. While the broader market rose more than 53% in 2023 and 2024, Coca-Cola shares fell 2%. Consumer staples are considered defensive during high inflation environments. People will usually still buy basic items in an expensive economy and businesses can usually pass on an increase in their prices to customers.
However, once the Fed stopped raising rates and inflation eased, consumer staples became less attractive. Also, they began to have less pricing power as consumers began to reach their points.
While the environment could remain challenging for commodities, many analysts see Coca-Cola as the frontrunner because of its strong execution in the United States and focus on global franchising. While they wait for these efforts to translate into stock appreciation, investors can collect a steady and growing stream of passive income every three months.
Since launching a new stake in the US oil producer Western Oil (NYSE: Oxy)Berkshire has bought the stock like there’s no tomorrow. Occidental is the sixth largest position in Berkshire’s portfolio, and Berkshire now owns more than 28% of the shares outstanding.
