3 No-Brainer Warren Buffett Stocks to Buy Right Now

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has consistently outperformed the S&P 500 ever since Warren Buffett took full control of the struggling textile maker in 1965. Under Buffett, Berkshire shuttered its textile business and acquired cash-rich insurance companies to fund the expansion of its investment portfolio, eventually making large investments in dozens of stocks and exchange-traded funds (ETFs).

Today, many investors closely follow Buffett's trades for fresh investment ideas. While there are still plenty of promising opportunities in that basket of 46 stocks and ETFs, three stocks stand out as compelling no-brainer buys right now: American Express (NYSE: AXP), Coca-Cola (NYSE: KO), and Kraft Heinz (NASDAQ: KHC). Let's find out a bit more about these three stocks and why they could be great additions to your portfolio.

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Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

1. American Express

Berkshire started to accumulate shares of American Express in 1998. It hasn't touched its position since its last purchase in 2012. That $47.9 billion in shares gives Buffett's holding company a 21.6% stake in Amex and now accounts for 16% of Berkshire's portfolio. That makes it Berkshire's second-largest single holding, after Apple.

American Express is a bank, payment processor, and card issuer, and it backs its cards with its own balance sheet. That sets it apart from Visa and Mastercard, which only process payments for partner institutions instead of issuing their own cards. American Express controls a smaller slice of the card payments market than Visa or Mastercard, but it only issues its cards to higher-income and low-risk people.

American Express is also well insulated from interest rate swings. High interest rates boost its banking segment's net interest income, while low interest rates drive its cardholders to make more purchases. That evergreen business model makes it a reliable stock for long-term investors.

From 2024 to 2026, analysts expect American Express' revenue and EPS to grow at a compound annual growth rate (CAGR) of 9% and 12%, respectively, as the macro environment stabilizes, it locks in higher-income Gen Z and millennial consumers, and it expands into more overseas markets. It still looks reasonably valued at 21 times forward earnings, it pays a forward yield of 0.9%, and it could have plenty of room to run.

2. Coca-Cola

Berkshire started to invest in Coca-Cola in 1988, and it made its most recent purchase in 2012. Today, it holds nearly $25 billion in Coca-Cola shares, which equals a 9.3% stake in the beverage giant and 8.3% of Berkshire's entire portfolio. That makes it the company's fourth-largest holding.

Coca-Cola struggled with declining soda consumption rates over the past couple of decades, but it developed and acquired more brands of bottled water, tea, coffee, fruit juices, sports drinks, and even alcoholic beverages to offset that pressure. It also refreshed its classic sodas with smaller serving sizes, new flavors, and healthier versions.

That diversified business model enabled Coca-Cola to grow at a steady rate even as inflation, higher rates, and a strong dollar rattled the global economy. From 2023 to 2026, analysts expect its revenue and EPS to grow at a CAGR of 3% and 8%, respectively. It isn't expensive at 22 times forward earnings, it pays an attractive forward yield of 3.1%, and it's a Dividend King that has raised its annual payout for 62 consecutive years.

That stability makes Coca-Cola a great play in both bull and bear markets. It won't skyrocket anytime soon, but it's a perfect place to park your cash in these uncertain times.

3. Kraft Heinz

Berkshire and 3G Capital orchestrated the merger of Kraft Foods and H.J. Heinz to create Kraft Heinz in 2015. It hasn't touched that position since then, and it currently holds $9.3 billion in shares. That gives it a 26.9% stake in the packaged foods giant, and it accounts for 3.1% of Berkshire's portfolio as its eighth-largest holding.

After the merger, Kraft Heinz initially focused too much on cutting costs instead of investing in the growth of its classic brands. In 2019, it took a $15 billion writedown on its top brands, cut its dividend, and was probed by the Securities and Exchange Commission over its accounting issues. But after those setbacks, Kraft regained its footing by divesting its weaker brands, buying higher-growth brands, refreshing its classic brands with new products and marketing campaigns, and pruning its expenses. It also raised its prices over the past few years to counter inflation.

From 2023 to 2026, Kraft Heinz's revenue growth could remain nearly flat as it divests its weaker businesses and runs out of room to raise its prices. But analysts expect its EPS to grow at a CAGR of 12% as it continues to streamline its business. It still looks cheap at 9 times its 2025 earnings, and it pays a high forward yield of 5.4%. That low valuation and high yield should limit its downside potential as its core business stabilizes.

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*Stock Advisor returns as of February 3, 2025

American Express is an advertising partner of Motley Fool Money. Leo Sun has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Mastercard, and Visa. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.