2 Warren Buffett Stocks to Buy Hand Over Fist in March

Berkshire Hathaway, the massive conglomerate run by investing legend Warren Buffett, sold a lot of shares in 2024. Berkshire significantly trimmed its stakes in two of its largest holdings, Apple and Bank of America, and the company hasn’t been too interested in buying its own stock, repurchasing far fewer shares in 2024 than in prior years.

Buffett and Berkshire historically have been excellent at buying high-quality companies at attractive prices and holding them for long periods. Berkshire runs a roughly $297 billion equities portfolio and is always looking to deploy cash into well-run companies.

Here are two Buffett stocks to buy hand over fist in March that have stood the test of time in Berkshire’s portfolio.

1. American Express: One of the few banks left untouched

Buffett and Berkshire have seemingly soured on the banking sector. Not only has Berkshire sold a significant portion of its stake in Bank of America, but it also sold significant portions of its stakes in Citigroup, Capital One, and the Brazilian digital bank Nu Holdings in the fourth quarter. However, one bank stock that Buffett and Berkshire haven’t touched in 27 years is American Express (AXP -3.00%), which is now the second-largest holding in Berkshire’s portfolio.

American Express isn’t your typical bank. The company runs one of the four large credit card networks in the world and has a large credit card portfolio. Buffett likes American Express because the company generates a nice mix of fee and interest revenues. American Express collects fees when transactions are processed through its network, as well as interest income on credit card loans.

The American Express brand has also become an advantage of its own because many people believe it presents a certain status, and therefore seek it out. Consumers pay close to a $700 annual subscription fee for the Platinum card, which also generates a nice annual recurring stream of revenue.

On a long-term basis, American Express hopes to achieve 10%-plus revenue growth and earnings-per-share growth in the mid-teens percentage range. The company may experience cyclical headwinds if there is a slowdown in consumer spending or if the consumer endures financial stress. However, American Express also tends to attract higher-income users and therefore more resilient users.

Buffett and Berkshire have now held the stock through the Dotcom Bubble, the Great Recession, and the COVID-19 pandemic, and continue to hold the stock. That’s a strong vote of confidence from the Oracle of Omaha.

2. Coca-Cola: Sticking to the classics

Another classic in Berkshire’s portfolio is the iconic beverage company Coca-Cola (KO 0.54%). Berkshire first bought $1 billion of Coca-Cola in 1988. Today, that position is worth about $24.9 billion.

The Coca-Cola brand is second to none in the beverage industry and has an impressive moat, something we’ve seen Buffett gravitate to over the years, whether it’s American Express or Apple. Coca-Cola is also considered a defensive company, partly because most consumers will still buy Coca-Cola and the company’s other beverages through all economic stages including a recession.

Coca-Cola is also not a company that sits on its laurels. Management has a strong history of innovation, and creates and owns many new and popular drinks. For example, in addition to soda, Coca-Cola owns electrolyte drinks like Powerade and BODY ARMOR, coffee and tea brands, juice brands like Minute Maid, and even alcohol. Recently, the company unveiled a new prebiotic soda called Simply Pop, which is part of the healthy trends that many consumers desire.

Something else Buffett enjoys about Coca-Cola is the company’s reliable and growing 2.86% dividend yield. Many companies can pay a dividend, but few can say they’ve increased their dividend for 63 consecutive years. Coca-Cola is in a very exclusive league on this front. Since 2010, the company has distributed over $93 billion in dividends to shareholders.