Warren Buffett and his company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) No introduction required. Between 1965 and 2023, the Berkshire shares generated a total profit of 4,384,748%, or a compound annual profit of 19.8%. In the same period, the wider benchmark S&P 500 Including dividends generated a total profit of 31,223%, or a compound annual growth rate (CAGR) of 10.2%. This dominance is one of the many reasons why investors worship Buffett and Berkshire.
Although you should never invest without Due Diligence, you can follow the Berkshire portfolio for investment ideas, or to check your thesis if Berkshire buys or sell a share with which you have done the opposite. Here are the best Buffett shares to buy with $ 1,200.
Berkshire bought for the first time Coca-Cola (NYSE: KO) In the 1980s, and it has been a big winner in the many decades that Berkshire had the stock. Coca-Cola is the fourth largest position in Berkshire and is 8.4% of the approximately $ 297 billion portfolio of the conglomerate.
Why does Buffett like Coca-Cola so much? The dividend. In the letter from Berkshire to the shareholders of Berkshire, Buffett wrote that the Berkshire dividend received $ 75 million from the company in 1994. By 2022, that dividend had grown by 838% to $ 704 million. Nowadays the dividend yield from Coca-Cola is around 3.1%. The company has increased its dividend with an amazing 62 consecutive years, making it known in an exclusive club as the Dividend Kings. This is simple, reliable money for Berkshire and the checks every year cash.
The stock of Coca-Cola has not performed well in recent years. While the wider market rose more than 53% in 2023 and 2024, the shares of Coca-Cola fell by 2%. Consumer birds are considered defensively during environments with high inflation. People will usually still buy essentials in an expensive economy, and companies can usually pass on their prices to customers.
Once the Fed stopped raising the rates and relaxing inflation, the staples of the consumer became less attractive. Moreover, they started to have less price power when consumers started to hit their breaking points.
Although the environment can remain a challenge for the staples of the consumer, many analysts consider Coca-Cola as an outbreak because of the strong version in the US and renewed focus on global franchising. In anticipation of these efforts to translate into valuation for the share, investors can collect a steady and growing stream of passive income every three months.
Since the launch of a new interest in the American oil producer Occidental Petroleum (NYSE: Oxy)Berkshire has bought the stock as if there is no tomorrow. Occidental is the sixth largest position in the Berkshire portfolio, and Berkshire now has more than 28% of the outstanding shares.
