Part of Berkshire Hathaway (NYSE: BRK.A) CEO Warren Buffett’s success is his ability to identify stocks with long-term growth potential.
Notably, Buffett’s portfolio consists of what can be referred to as ‘forever’ stocks, which have a reputation for offering sustainable competitive advantages while allowing investors to buy and hold them for an extended period.
With the fourth quarter of 2024 approaching amid the lingering economic uncertainty surrounding a possible recession, some of Buffett’s ‘forever’ stocks offer an opportunity for notable returns. Below are the two equities to consider.
Picks for you
Coca-Cola (NYSE: KO)
Over the past several years, the beverage giant has become one of the leading players in Buffett’s portfolio, serving as a great example of a long-term investment. Indeed, Coca-Cola (NYSE: KO) represents one of the best ‘forever’ stocks, enjoying a distinct competitive advantage for several years.
In Q4 2024, investors may want to examine KO closer, thanks to its global brand and reputation, supported by an expansive portfolio of beverages. These atributes have provided Coca-Cola with relatively stable revenue streams, complemented by steady dividend growth. Notably, Buffett has earned a significant dividend from the stock in the past, with Finbold reporting an amount of $194 million in the first quarter of the year.
Elsewhere, Coca-Cola beat revenue estimates in Q2 2024, reporting returns of $12.36 billion against an expectation of $11.76 billion. Similarly, the company offers more investment opportunities after issuing a bullish guidance.
In this line, the firm expects organic revenue growth of 9% to 10%, up from its prior forecast of 8% to 9%. Coca-Cola also raised its outlook for comparable earnings growth to a range of 5% to 6%, up from a previous range of 4% to 5%.
Currently, KO is trading at $70, reflecting short-term bearish momentum with losses of almost 2% in the last 24 hours. However, in 2024, the stock has rallied by 18%.
American Express Company (AXP)
Part of Buffett’s Buffett’se for American Express (NYSE: AXP) lies in its strong brand, loyal customer base, and significant market share in the premium credit card space. These elements make AmEx an ideal Q4 investment with a durable competitive advantage.
Therefore, it ranks as a ‘forever’ stock thanks to the loyalty of its brands and the resilient business model featuring diversified revenue streams from card charges, interest income, and transaction fees. American Express also offers growth opportunities through expanded exposure to digital payments serving young, tech-savvy consumers.
Notably, the firm’s Q2 2024 revenue grew 8.7% year over year to $15 billion. In addition, American Express raised its 2024 guidance, anticipating earnings per share between $13.30 and $13.80, beating the previous consensus of $12.65 and $13.15.
As of press time, the stock was trading at $251, representing a 33% increase.
Although general market sentiments also influence these equities, the fact that they are part of Buffett’s portfolio should be worth considering for investors. This is based on Buffett’s successful investment acumen, making it potentially ideal for investors to mimic his strategy.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
