Warren Buffett's 56% Bet on Two Major Stocks in Berkshire Hathaway's Portfolio

Warren Buffett, known for his masterful investment strategies, has yet again showcased his talent by outperforming the market. Berkshire Hathaway's equity securities portfolio returned 32.4% over a three-year period, surpassing the S&P 500's 27.5% return, thanks largely to Buffett's adept stock selections. Two standout investments by Buffett are Apple and The Coca-Cola Company, which combined, form a staggering 56% of Berkshire Hathaway's $318 billion portfolio, as of the end of the third quarter, with $157 billion in Apple and $22 billion in Coca-Cola.

Apple: Commanding Nearly Half of Berkshire's Investments

Warren Buffett highly values a company's ability to maintain a durable economic moat, which represents its competitive advantages. Apple certainly fits this criterion, showcasing strengths such as brand recognition, proprietary technology, and customer loyalty. By designing attractive hardware and tying it to its exclusive iOS software, Apple has created an ecosystem that encourages repeat customers and justifies premium pricing.

The tech giant has made waves in a variety of consumer electronics markets, further solidifying its growth potential as the industry itself is expected to grow at a 6.6% annual rate through 2030. Apple has also leaned into its services sector, enhancing its overall profitability through offerings like the App Store, iCloud, Apple Pay, and various subscription services.

Although Apple experienced some setbacks in its fiscal fourth quarter, the company remains a Wall Street darling with expectations of a steady 10% annual growth in earnings per share over the long term.

Coca-Cola: A Fizzy 7% of Buffett's Portfolio

Coca-Cola shares a similar story of holding a strong economic moat, thanks to its unrivaled scale and brand power. It's not just about selling sodas; the company has become a leader in the global market, available in over 200 countries and still expanding its market share. Coca-Cola's marketing prowess has also earned it top honors as the most valuable nonalcoholic beverage brand.

The renowned drinks manufacturer has shown reliable financial performance with consistent growth in revenue and earnings. Looking ahead, analysts foresee a steady 6% annual increase in earnings per share, despite the stock's seemingly high valuation at 23.1 times earnings. For dividend-lovers, Coca-Cola stands out with an impressive dividend yield of 3.2% and a strong history of payouts boosting its status as a Dividend King.

Buffett, Investment, Stocks