Warren Buffett is recognized for his legendary ability to uncover high-quality and undervalued companies to invest in. Under his leadership, Berkshire Hathaway (NYSE: BRK.B) (NYSE: BRK.A) has crushed the returns of stock market benchmarks like the S&P 500 index.
For retail investors, the conglomerate's massive stock portfolio can be a great place to start looking for investing ideas. While the companies Berkshire invests in are not necessarily sure things to deliver positive returns, there's a benefit in knowing that their fundamentals have been vetted and approved by one of the world's most skilled investors.
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Here are three Buffett stocks that I believe are strong buys right now. Even better, you'll only need about $250 to pick up one share of each of them to get your portfolio started.
Coca-Cola (NYSE: KO) is not just one of the most recognizable consumer brands globally, it's also a longtime favorite of Buffett, who says he still drinks several of its eponymous soft drinks daily. With a stake valued at more than $25 billion, the beverage giant is Berkshire Hathaway's fourth-largest stock holding, accounting for close to 9% of the investment portfolio.
That long-established bet continues to pay off as shares of Coca-Cola reached a record-high stock price earlier this year amid impressive operating and financial momentum. Coca-Cola has found success in diversifying beyond its flagship brand and traditional sodas. Its broad lineup now includes more than 200 brands across categories including sports drinks, flavored water, juices, and dairy products.
In its fiscal third quarter, which ended Sept. 27, organic revenue increased by 9% year over year while comparable currency-neutral earnings per share (EPS) climbed by 13%. Higher sale prices and the ongoing premiumization of its brand portfolio support a positive growth outlook.
What I like about the stock today is that a recent sell-off presents a compelling opportunity to pick up shares of this blue chip leader at a discount ahead of a possible rally higher.
While Buffett has made numerous home-run investments over the years, he has acknowledged that Berkshire Hathaway overpaid for its large position in Kraft Heinz (NASDAQ: KHC) back in 2015. The consumer staples and packaged foods juggernaut has struggled for years with weakening sales in a shifting macroeconomic environment. Indeed, the stock has been one of the portfolio's worst performers, losing more than half its value from its 2017 peak. Even the Oracle of Omaha isn't immune from the occasional misstep.
Yet today, Kraft Heinz is a potential comeback story. Buffett appears committed to the company's long-term potential, and he has said that he has some optimism that the new CEO who took over this year can get it back on track. The good news is that Kraft Heinz is generating positive adjusted earnings growth while implementing a strategic plan to revitalize growth by focusing on its core strengths.
Perhaps the best reason for investors to consider buying Kraft Heinz now is its attractive dividend, which yields 5.2% at the current share price. The payout is well-supported by strong underlying free cash flow and consistent profitability. Regardless of whether the company's turnaround materializes quickly or arrives later in 2025, investors will get paid generously to wait for it.
While DaVita (NYSE: DVA) may not be a household name, the company exemplifies Buffett's value investing philosophy and long-term perspective. The kidney dialysis services specialist is one of the largest medical care providers in the United States and has operations in 13 other countries as well.
DaVita has been benefiting from broader healthcare sector trends, particularly an aging population and climbing international demand. Berkshire Hathaway owns about 44% of the company's outstanding shares -- a stake it has built since its initial purchase in 2011.
The stock has outperformed in 2024 thanks to the company's strong earnings, delivering a 44% return year to date. Given the company's outlook for sustained profitable growth, DaVita should continue to reward shareholders.
One lesson all investors can learn from Buffett is that successfully navigating the stock market requires patience and a long-term investing outlook. In my view, shares of Coca-Cola, Kraft Heinz, and DaVita could make excellent additions to a diversified portfolio, helping people harness the wealth-building power of compound growth over time.
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Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.