As 2024 draws to a close, Warren Buffett’s investment strategy remains a blueprint for success, built on identifying companies with enduring competitive advantages and strong fundamentals.
While replicating Buffett’s track record may be out of reach, a handful of his investments remain no-brainer buys regardless of investment style.
Among these, Kraft Heinz (NASDAQ: KHC) and American Express (NYSE: AXP) emerge as standout picks, offering investors compelling opportunities for both growth and stability heading into 2025.
Picks for you
Kraft Heinz stock
Kraft Heinz is steadily carving a niche as a promising investment for 2025. Trading at $30.77, the stock reflects a 19% decline year to date, presenting an opportunity to invest in a company undergoing a significant turnaround.
Kraft Heinz stands out as a core holding in Warren Buffett’s portfolio, with 326 million shares valued at $10 billion, representing 3.6% of Berkshire Hathaway’s (NYSE: BRK.A) total investments.
Backed by the implicit endorsement of one of the world’s most successful investors, Kraft Heinz also garners confidence from influential figures such as Bill Gates, Jeremy Grantham, and Prem Watsa, further underscoring its appeal as a compelling investment.
From a valuation perspective, Kraft Heinz is attractive. The stock’s forward price-to-earnings (P/E) ratio of 10.18 is significantly below the sector average, signaling a discount relative to peers.
Additionally, the company offers a dividend yield of 5.19%, which is a standout in the consumer staples sector.
Despite trading significantly below its 2015 opening price of $71 and its 2017 peak, Kraft Heinz remains a solid pick. Recent challenges, such as multiple contractions, concerns over the impact of GLP-1 weight loss drugs on consumer demand, and sluggish business performance, have undoubtedly weighed on the stock.
However, despite these headwinds, including weak volume growth and shifting consumer behavior, Kraft Heinz’s core fundamentals remain strong.
The company reported $12.9 billion in revenue during the first half of 2024, showcasing the enduring appeal of its iconic brands such as Philadelphia Cream Cheese, Heinz Ketchup, and Lunchables.
Although Q3 saw a 2.6% decline in net sales, these results reflect temporary challenges rather than long-term trends.
Looking to 2025, improving macroeconomic conditions could catalyze Kraft Heinz’s recovery. With U.S. GDP projected to grow by 2.5% according to Goldman Sachs, rising consumer spending power, and anticipated interest rate cuts, the company is well-positioned to benefit.
Furthermore, its focus on emerging markets and high-margin channels like ‘Away From Home’ is driving incremental revenue growth, offsetting pressures in North America and developed international markets.
American Express
American Express has all the hallmarks of a Warren Buffett favorite, making it a no-brainer investment for 2025.
With a 153% stock price increase over the past five years and a 61% surge in 2024 alone, the payments giant has consistently outperformed not just the broader market but also key financial benchmarks.
Operating globally with a market cap of $214 billion, American Express continues to thrive even in challenging economic environments.
The company’s 10 consecutive quarters of record revenue showcase its foothold, driven by strong cardholder spending, an 18% increase in card fee revenue, and the addition of 3.3 million new premium cardholders in 2024.
Its projected 2024 EPS of $13.75 to $14.05 represents an impressive 75% growth since 2019, supporting its ability to deliver consistent results.
Beyond its financials, American Express’ wide economic moat—anchored by its premium branding, customer base, and unparalleled cardholder-merchant network—provides it with a durable competitive advantage that few can replicate.
While its P/E ratio of 21.3 reflects a modest premium, it remains competitive compared to the S&P 500’s (SPY) average of 27.3. Coupled with a nearly 1% dividend yield, the stock offers an attractive proposition for both growth-oriented and income-focused investors.
With its proven track record and strong growth trajectory, this payments giant is a no-brainer pick for traders and investors looking ahead to 2025.
With their focus on stability, robust fundamentals, and long-term growth potential, these stocks provide investors with a chance to navigate volatility while positioning their portfolios for sustained success.
For those who prefer a more conservative approach, investing directly in Berkshire Hathaway stock offers a diversified gateway to these and other carefully curated Buffett selections.
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