Warren Buffett, the legendary investor who served as CEO of Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) from 1965 to the end of 2025, built his holding company’s equity portfolio through one simple philosophy. To quote the Oracle of Omaha himself: It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
For the latter portion of Buffett’s investing career, he focused primarily on identifying, buying, and holding high-quality businesses and stocks within Berkshire Hathaway. Although Buffett has now retired, with longtime lieutenant Greg Abel taking the helm as CEO, Abel has indicated Berkshire plans no immediate changes to its structure or its key investments.
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This includes Berkshire’s core portfolio of blue chip and other stocks. Among these holdings, the following stand out as stocks to buy and hold in all markets: Apple (NASDAQ: AAPL), American Express (NYSE: AXP), and Coca-Cola (NYSE: KO).
Berkshire Hathaway owns a 1.6% stake in tech giant Apple, worth approximately $56.4 billion. Representing 18.1% of Berkshire’s portfolio, this is also the company’s largest equity position. Interestingly enough, as recently as the early 2000s, Buffett was still rebuffing tech stocks, given the difficulties of evaluating companies in fast-changing industries.
However, with Apple, Buffett & team found an interesting exception. Among major tech stocks, Apple is a wide-moat stock as competitors have a hard time beating the high levels of customer loyalty for products such as the iPhone, not to mention the power of Apple’s ecosystem in keeping customers from switching to competing hardware.
Trading for 32 times forward earnings estimates, Apple may currently command a more than fair price, given how bullishness for artificial intelligence (AI) stocks persists. However, over a multidecade time horizon, factors like steady earnings growth, a commitment to share repurchases, plus its modest, but growing, 0.4% forward dividend yield, may result in strong, consistent total returns.
American Express is a financial stock, but this longtime Berkshire Holding is very similar to the Apple position. Like Apple, American Express’ strength is in its brand. The resultant customer loyalty, coupled with a complex ecosystem that monetizes this customer base, enables the company to generate steady, consistently growing profits even during more challenging times for the overall economy.
Berkshire Hathaway built up its 22% stake in American Express between 1991 and 1995. Over the past 35 years, American Express has handily beat the S&P 500 index by a wide margin . Although the S&P 500 has outperformed more recently, various factors bode well for Amex’s future fiscal performance.
Helping American express are the continued resilience of affluent customers amid challenging economic times plus robust demand for American Express ecosystrem products by millennial and Gen Z consumers. Shares currently trade for 19 times forward earnings estimates, which is within the stock’s historic valuation range.
American Express may have a forward dividend yield of just 1.3%, but these payouts have been growing at a double-digit clip annually for over a decade. In the years ahead, dividends are likely to keep contributing a greater portion toward the stock’s total returns.
Among its core holdings, Berkshire Hathaway has held Coca-Cola the longest, building up its position during the late 1980s/early 1990s. The holding company currently owns 9.3% of the beverage giant, a position that makes up roughly 9.7% of Berkshire Hathaway’s overall stock portfolio. In terms of long-term performance, total returns for Coca-Cola have more or less been in line with total returns for the S&P 500.
Since early 1988, when Berkshire first started buying Coca-Cola, Coca-Cola shares have delivered total returns of 3,580%, slightly below the 3,700% total return generated by the S&P 500.. Yet while Coca-Cola hasn’t generated market-beating returns for Berkshire, it has generated steady returns, largely due to Coca-Cola’s focus on maintaining and growing its dividend.
Coca-Cola is one of the Dividend Kings, with 64 consecutive years of annual dividend growth under its belt. Shares currently have a forward dividend yield of 2.8%. Dividend growth has averaged around 4.5% annually over the past decade. Berkshire uses the dividend income from this bedrock position to fund new investments; one could do the same with their own personal long-term portfolio.
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American Express is an advertising partner of Motley Fool Money. Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway and is short shares of Apple. The Motley Fool has a disclosure policy.
Warren Buffett’s Favorite Holdings: 3 Stocks Worth Owning for a Lifetime was originally published by The Motley Fool