This page lists the largest stock holdings held by Warren Buffett's company, Berkshire Hathaway. Learn more.
Warren Buffett is well-known a billionaire investor and his name is invariably connected to the American Dream. But Warren Buffett did not build his stock portfolio through a rags-to-riches story of picking a lucky penny stock: His strategy involves buying and holding stocks long-term. These stocks are the publicly-traded securities that form the backbone of Warren Buffett's stock portfolio in 2020.
Top 10 Warren Buffett Stocks to Buy
Apple (NASDAQ: AAPL)
Apple (NASDAQ: AAPL) is a California-based tech giant that designs, manufactures, and sells consumer electronics like computers, phones, and tablets. Apple’s iPhone is the most popular cell phone model in the world, and they’re a global leader in software and app development. Though Buffett has tended to avoid technology stocks, Apple made a foray into his portfolio a few years ago. Buffett will only invest in undervalued or reasonably valued companies with strong management, and Apple meets these benchmarks with a PE ratio in the low 20s and a dividend yield of 1.7 percent.
Delta (NYSE: DAL)
Delta (NYSE: DAL) is an Atlanta-based legacy carrier and one of the major airlines in the United States. Globally, Delta is ranked second in terms of scheduled passengers and fleet size, and 69th on the Fortune 500. Delta actually began as a crop-dusting company, operating a local fleet of low-flying planes. A series of acquisitions over the next several decades included the takeover of Pan American Airways’ Atlantic routes, making Delta the largest carrier between America and Europe. Today, they have over 900 airplanes and partnerships around the world. Their PE ratio is amazingly less than 8 and their dividend yield is almost 3 percent.
Coca-Cola (NYSE: KO)
Coca-Cola (NYSE: KO) is one of the staple names in Buffett’s portfolio. His company, Berkshire Hathaway, actually happens to be the largest stockholder of this Atlanta-based soft drink company, and Buffett himself claims to drink several cans of Coca-Cola every day.
Coca-Cola was invented in 1886, as both an answer to the morphine addiction suffered by Civil War veterans and a substitute for alcohol in the era of temperance. Several recipes later, it’s essentially become one of two choices when it comes to that bubbly beverage made from the Kola nut (the other one is Pepsi). Coca-Cola brands also include Sprite, Fanta, Dasani, and Glaceau Smartwater. The company has also made recent forays into the restaurant business, buying UK coffeehouse chain Costa Coffee.
American Express (NYSE: AXP)
American Express (NYSE: AXP) is another long-standing staple in Buffett's portfolio. Buffett is a shrewd investor who buys into companies showing a promising future—and payment processing certainly seems like a business that will be around for a while. AMEX may not be as popular as Visa or Mastercard, but it has a high market share of 22.9% of all domestic credit card transactions in terms of dollar value. The average annual spending of its cardholders is almost $20,000.
Amex markets itself as a premium product for wealthier clients. Like other big financial companies (such as Wells Fargo), American Express actually started out as a stagecoach company, but over the years phased into the money order and banking business. AMEX was one of the first companies to issue charge cards to clients and the first to issue them in plastic.
Wells Fargo (NYSE: WFC)
Wells Fargo (NYSE: WFC) is another of Buffett’s more sizeable holdings. Buffett chooses bank stocks because they pay great dividends. Wells Fargo was the largest bank in the world in terms of market capitalization, until a 2016 backlash over the creation of millions of fake accounts. However, Wells Fargo remains the fourth largest bank in the world in terms of market cap, and the fourth largest in the United States in terms of assets. Wells Fargo was initially a stagecoach express company, but it emerged from the Wild West days of the California Gold Rush to become the premier bank west of the Mississippi. Today they have a low PE ratio under 12 and give a 3.83% dividend yield.
Amazon (NASDAQ: AMZN)
Amazon (NASDAQ: AMZN) is a recent addition to Buffett's portfolio, which may come as a surprise to some of his closest followers, considering that it does not pay dividends. Moreover, Amazon has historically had a high PE ratio, though now that it’s dipped below $100. Since it makes up less than half of one percent of Buffett’s total stock assets, it’s more likely that he’s either just attempting to capitalize on its price or waiting for the day when it starts to pay dividends. Until then, however, he may view the online retail space with a wary eye, as multiple players around the world, like competitor Alibaba, fight it out for the top spots.
American Airlines (NASDAQ: AAL)
American Airlines (NASDAQ: AAL) is a Texas-based carrier that is the largest in the world, with 6,700 daily flights to 350 global locations and $40 billion in operating revenue. In 2013, American Airlines merged with US Airways, keeping the former name due to its global recognition. American Airlines started out in 1930 as a confederation of 80 smaller airlines, but today it operates as one cohesive company of almost 950 aircraft. Regional flights are operated under the name American Eagle. American Airlines was a founding member of the One World Alliance, a global network of airline companies partnering together for service—the largest network of its kind.
Bank of America (NYSE: BAC)
Bank of America (NYSE: BAC) is one of the big four banks in the US, with an approximate 11% share of domestic deposit accounts serviced. Bank of America actually began as the Bank of Italy, founded by an Italian immigrant to provide banking services for fellow Italians facing persecution. The bank expanded rapidly in the 1950s—by this time, it had changed its name to BankAmerica.
After suffering big losses during the Russian Economic Crisis of 1998, BankAmerica was acquired by NationsBank in the largest bank acquisition in history, resulting in what is today Bank of America. Bank of America is noted for focusing on retail banking for the middle class, giving it a significant amount of market share. Bank of America’s market capitalization is currently around $313.5 billion, making it the 13th largest company in the world. Even so, Bank of America is not overvalued; it has a very reasonable PE ratio of around 12 and dividend yields of just over 2%.
Costco (NASDAQ: COST)
Costco (NASDAQ: COST) is a wholesale enterprise that caters to consumers who buy an annual membership. It’s is one of the world’s largest distributors of meat, chicken, organic food, and wine, and is ranked #14 by Fortune in terms of revenue for US corporations. The Costco Wholesale Corporation has a total of almost 780 warehouses in the United States and around the world, coming in just behind Walmart as the second-largest retailer in the world.
Interestingly, Costco’s membership fees account for 70% of its operating income. The company has no PR department and does not pay for advertising. When Costco first started, they preferred to sell only items that could be displayed by removing the shrink wrap from a pallet, but since then they’ve branched out to sell just about everything imaginable, including smaller items, such as perishables and produce.
General Motors (NYSE: GM)
General Motors (NYSE: GM) is an international car company headquartered in Detroit that designs, manufactures, and sells motor vehicles through its core lines: GMC, Chevrolet, Buick, and Cadillac. GM also holds sizeable shares of foreign car companies in Asia, Europe, and the Middle East—with annual global sales of 10 million automobiles.
William C. Durant, the founder of GM, initially ran a carriage company and was averse to automobiles. However, in 1904, a fellow businessman convinced him to buy the Buick Motor Company. After that, General Motors, as it became called, started buying up other Michigan car companies. GM surpassed Ford Motor company in terms of market share in the 1950s and branched out to manufacture aircraft, construction equipment, and trains. Today their PE is less than 6 and their dividend yield is 4.25%.
Why Should I Buy Warren Buffett Stocks?
There are many approaches to stock investing. Investors might build a complex computer program that analyzes previous market movements of a stock price to predict its future worth. Or, they might engage in value investing, where they put the same amount of money into the stock market year after year, regardless of stock prices (this is essentially what most employed people are doing with their retirement portfolios).
Another way to invest is to just follow someone who really knows what they’re doing—and just do whatever they do. This is sometimes referred to as piggyback investing. When it comes to piggyback investing, you can’t find anyone better to copy than Warren Buffett.
Warren Buffett does not claim to have a crystal ball that tells him the future. To this date, he has not been accused of insider trading. What Buffett does have is unparalleled business acumen and tremendous respect in the world of business and investments. He can pick up the phone, call any CEO, and ask how business is—and they’ll tell him. He’s just that big.
When it comes to deciding which stocks to buy, even the biggest financial pundits and financial advisors make mistakes. They may hop on the bandwagon of seemingly excellent companies like Facebook (which Buffett has heretofore avoided) and ignore smaller fish like Sirius XM (a satellite radio company in Buffett’s portfolio).
If you look at Twitter and YouTube, you can see a lot of these financial pundits chattering about bitcoin price and other exciting market moments that might be no more than a flash in the pan. But no one has the billion-dollar business acumen of Warren Buffett. In fact, your best bet for gleaning sound financial advice might be reading Warren Buffett’s annual letter to shareholders, some of which have been published as Berkshire Hathaway Letters to Shareholders 1965-2012.
How Does Warren Buffett Pick Stocks?
When it comes to stock picks, Buffett’s investment strategy is all about undervalued stocks exhibiting stability and a business model he approves. If you take a look at the most significant holdings in Buffett’s portfolio, you’ll notice that many of them are banks or payment processing companies. In fact, in his top 15 holdings, you’ll find Bank of America, Wells Fargo, American Express, U.S. Bancorp, Chase, Moody’s, Goldman Sachs, and Bank of New York Mellon—more than half of his most sizeable assets. Banks are fairly stable stocks with a low PE ratio, and they tend to pay great dividends.
Buffett didn’t get where he is by winning the stock market lottery on the best growth stocks. Many of the companies that Buffett invests in are more than 100 years old. As he has said himself: “If a company has been around 20 years, it’s probably a good investment.” These established companies tend to not be in phases of startup growth and have substantial financial resources they can leverage if they want to expand. This means that profits can continually be parceled out among shareholders instead of reinvested—which is great for any investor with a dividend investing strategy.
Of course, Buffett has also achieved financial success by operating a hedge fund, banks, and insurance companies. Insurance is a great business because insurance companies rarely have to give money back to policyholders. They can invest it and make more money, which Buffett has done with his holding company, Berkshire Hathaway (which is also involved in real estate). Despite his status as an individual of incredibly high net worth ($86 billion dollars), Buffett is more than a growth-oriented investment guru. He gives billions of dollars to charitable causes through the Buffett Foundation.
Warren Buffett’s Portfolio
If you buy stocks like Warren Buffett (namely, you buy them long term), you are sure to see growth and earnings over time. Many retail investors choose to stake their claim in a mutual fund, but Warren Buffett stocks have outperformed the market, gaining 20% between 1965 and 2017—more than double the growth of your average mutual fund.
Investing in Warren Buffett stocks is not about buying and selling the most active stocks or expected earnings of the biggest stock gainers. Instead, it’s about investing in solid companies that are well established, have low amounts of debt, and a lasting business model.