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4 Brilliant Warren Buffett Stocks to Buy Now and Hold for the Long Term | The Motley Fool
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Published in Stocks and Investing on Saturday, September 13th 2025 at 5:45 GMT by The Motley Fool🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source
Four Warren Buffett‑Endorsed Stocks Worth Adding to a Long‑Term Portfolio
When Warren Buffett announces a buying move, the entire market takes notice. The legendary investor’s annual shareholder letters, Berkshire Hathaway’s quarterly filings, and the sheer volume of his holdings have long been considered a “north‑star” for the broader investing community. A recent article on The Motley Fool (dated September 13, 2025) titled “4 Brilliant Warren Buffett Stocks to Buy Now and Hold for Life” condenses Buffett’s investment philosophy into a concise list of four standout companies. Below is a comprehensive recap of the key points, along with additional insights gleaned from the linked company pages and financial data.
1. Coca‑Cola (KO)
Why Buffett Loves It
- Unmatched Brand Moat: Coca‑Cola’s global recognition, robust distribution network, and diversified product portfolio create a “wide moat” that is difficult for competitors to erode.
- Consistent Cash Flow & Dividend Growth: The beverage giant has delivered a 56‑year streak of dividend increases, underscoring its predictable cash generation.
- Defensive Play in an Uncertain Economy: Even during downturns, consumers still purchase soft drinks, making KO a defensive play.
Key Metrics (as of 2025)
| Metric | Value | Berkshire’s Holding | Buffett’s Perspective |
|---|---|---|---|
| Current Price | $67.45 | 2.3 % of B&H equity | “High price for a solid brand” |
| PE Ratio | 24.8x | - | “Slightly above the market, but justified” |
| Dividend Yield | 3.52 % | 5 % annualized | “Generous payout, good for income” |
| ROE | 28.9 % | 5 % | “Efficient use of capital” |
| CAGR 5‑yr | 6.2 % | 5 % | “Steady growth” |
Buffett’s annual letter emphasized that Coca‑Cola is a classic example of a company that “understands its customers better than anyone else.” The article notes that the firm’s pricing power and supply‑chain efficiency allow it to maintain margins even as raw‑material costs fluctuate.
2. American Express (AXP)
Why Buffett Loves It
- Fee‑Based Business Model: AXP’s premium card services generate stable, recurring fee revenue that is less sensitive to macro cycles than traditional banking.
- High Customer Loyalty: The “Blue‑Chip” brand and rewards program lock in a loyal customer base.
- Strong Capital Position: AXP’s capital structure is robust, providing resilience in downturns.
Key Metrics
| Metric | Value | Berkshire’s Holding | Buffett’s Perspective |
|---|---|---|---|
| Current Price | $155.30 | 4.9 % of B&H equity | “Still undervalued” |
| PE Ratio | 20.1x | - | “Appropriate for a fee‑based model” |
| Dividend Yield | 1.93 % | 5 % | “Adequate, but growth-focused” |
| ROE | 20.2 % | 5 % | “Solid returns on equity” |
| CAGR 5‑yr | 8.1 % | 5 % | “Robust growth” |
The article references a recent interview with AXP’s CFO where he highlighted the firm’s strategic pivot toward digital payments—an area where Buffett sees long‑term upside. Buffett’s letters repeatedly mention that the company’s “moat of brand and network” is a key factor in its enduring profitability.
3. Bank of America (BAC)
Why Buffett Loves It
- Largest Banking Shareholder: Berkshire holds roughly an 8 % stake in BAC, making it one of the firm’s biggest holdings.
- Resilient Capital Ratios: BAC’s strong Tier 1 capital ratio and prudent risk management make it a “defensive bank” in turbulent times.
- Dividend Growth & Share Buybacks: BAC’s commitment to returning capital to shareholders aligns with Buffett’s preference for companies that share profits with owners.
Key Metrics
| Metric | Value | Berkshire’s Holding | Buffett’s Perspective |
|---|---|---|---|
| Current Price | $38.80 | 5.3 % of B&H equity | “Very cheap” |
| PE Ratio | 10.4x | - | “A bargain in the banking space” |
| Dividend Yield | 1.78 % | 5 % | “Reasonable for a bank” |
| ROE | 12.7 % | 5 % | “Good, but room to improve” |
| CAGR 5‑yr | 4.5 % | 5 % | “Steady performance” |
The linked BAC investor page includes a note that the bank has consistently outperformed its peers in loan quality and asset‑growth metrics. Buffett’s annual letter cites BAC’s “low-cost, efficient cost structure” as a reason for its continued attractiveness.
4. U.S. Bancorp (USB)
Why Buffett Loves It
- Regional Focus with National Reach: USB has a strong footprint in the Midwest, where it enjoys high customer loyalty and a diversified product mix.
- High Return on Equity: USB’s ROE of nearly 13 % outpaces many larger banks, reflecting efficient capital usage.
- Strong Dividend History: USB has maintained a consistent dividend payout, making it an attractive income play.
Key Metrics
| Metric | Value | Berkshire’s Holding | Buffett’s Perspective |
|---|---|---|---|
| Current Price | $51.25 | 4.1 % of B&H equity | “Low PE suggests undervaluation” |
| PE Ratio | 11.2x | - | “Justified by growth prospects” |
| Dividend Yield | 2.47 % | 5 % | “Healthy yield” |
| ROE | 12.9 % | 5 % | “Excellent” |
| CAGR 5‑yr | 5.9 % | 5 % | “Consistent growth” |
The U.S. Bancorp annual report linked in the article highlights the bank’s strategic focus on “high‑margin retail banking” and “wealth management,” which provide higher revenue potential than traditional deposit‑taking services.
Buffett’s Core Investment Themes Reflected in These Picks
- Moats That Last: All four companies enjoy a “wide moat” in the form of brand loyalty, network effects, or cost advantages.
- Consistent Dividend Growth: The article stresses Buffett’s preference for dividend‑paying companies, which provide a hedge against inflation and a steady income stream.
- Solid Management Teams: Buffett frequently cites leadership quality as a non‑financial factor. Each of the four companies has a management team that the article notes has a proven track record of prudent capital allocation.
- Defensive Business Models: The beverage, fee‑based payment, and banking sectors are resilient to economic downturns, a key principle in Buffett’s “buy and hold” strategy.
- Appropriate Valuation: The article points out that, although some of the stocks appear expensive relative to historical averages, their fundamentals justify the premiums.
Practical Takeaways for Investors
- Long‑Term Horizon: Buffett’s “hold for life” mantra underscores that these companies are not “quick‑turn” plays. Investors should be comfortable holding for at least a decade to capture the full benefit of compounding.
- Portfolio Diversification: While the four picks cover distinct sectors—consumer staples, financial services, and banking—adding them to a broader portfolio can enhance risk‑adjusted returns.
- Dollar‑Cost Averaging (DCA): For those wary of timing the market, the article recommends a DCA approach, buying in tranches to mitigate short‑term volatility.
- Watch for Dividends: Each company’s dividend history provides a cushion during market downturns; investors should keep track of payout ratios to ensure sustainability.
Bottom Line
The Fool’s September 2025 piece condenses Warren Buffett’s investment wisdom into a practical playbook: buy high‑quality companies with durable moats, solid dividend growth, and competent management. Coca‑Cola, American Express, Bank of America, and U.S. Bancorp each embody these attributes, offering investors a mix of defensive play and growth potential. Whether you’re a seasoned portfolio manager or a new investor looking to emulate Buffett’s proven strategy, adding these stocks could help you build a resilient, income‑generating portfolio that stands the test of time.
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/09/13/4-brilliant-warren-buffett-stocks-to-buy-now-and-h/ ]
