Unmissable Warren Buffett-Backed Stocks: Coca-Cola and Visa for Solid Investment Opportunities
ICARO Media Group
**Two No-Brainer Stocks Recommended by Warren Buffett for Immediate Investment**
Warren Buffett’s Berkshire Hathaway has long been the gold standard for generating market-beating returns. Under Buffett's disciplined and long-term investment philosophy, Berkshire Hathaway has consistently identified and invested in companies with robust competitive advantages and strong growth potential. Since taking control of Berkshire Hathaway in 1965, Buffett has built an impressive portfolio that includes leading businesses in insurance, energy, railroads, and mortgages. As he prepares to step down as CEO at the end of the year, Buffett leaves behind a legacy of successful investments, including a highly valuable equities portfolio worth over $278 billion. Here are two standout stocks from this portfolio that are worthy of your consideration.
**Coca-Cola: A Reliable Choice in Uncertain Times**
Coca-Cola is a quintessential Buffett stock, owned by Berkshire Hathaway since 1988. Known for his rigorous due diligence, Buffett looks for companies that can withstand the ups and downs of the economic cycle, and Coca-Cola fits this criterion perfectly. Despite the challenging economic landscape this year, Coca-Cola's stock has risen more than 15%. As a leader in the consumer staples sector, its products remain in demand even during economic downturns.
Coca-Cola has shown resilience against financial pressures, including high tariffs on aluminum, thanks to its ability to pass some of the increased costs onto consumers and to consider alternative packaging solutions. The company’s performance is further bolstered by a reliable dividend yielding 2.8% at current share prices, with a history of annual dividend increases for 63 consecutive years. Moreover, Coca-Cola is projected to generate $9.5 billion in free cash flow this year, comfortably covering its dividend commitments.
**Visa: The Ultimate Competitive Moat**
Visa, another strong recommendation, joined Berkshire Hathaway’s portfolio in 2011. Visa operates the largest card network globally, processing an impressive $13.2 trillion in total payment volume for its fiscal year ending September 30, 2024. Thanks to its extensive network, Visa enjoys one of the most formidable competitive moats in the business world.
Visa acts like a toll collector in the credit and debit card ecosystem, earning fees on every transaction processed and setting many of the rules within its network. Competing with Visa is no small feat; many challengers have either failed or ended up partnering with Visa and Mastercard. Visa’s significant investments in emerging payment technologies, including cryptocurrencies and stablecoins, further solidify its leading position.
In its recent fiscal 2025 second-quarter earnings report, Visa’s management confirmed robust and resilient consumer spending. While Visa is not entirely immune to economic fluctuations, its business model provides a level of protection against inflation, as fee incomes rise with consumer prices. This strength has enabled Visa to navigate past economic downturns successfully.
Bram Berkowitz does not hold any positions in the stocks mentioned. The Motley Fool owns shares in and recommends Berkshire Hathaway, Mastercard, and Visa.