5 Stocks Warren Buffett Still Loves

5. Procter & GambleBerkshire Hathaway owns 1.9% of Procter & Gamble

Buffett first purchased Gillette shares (now part of Procter & Gamble) in 1989.

What Buffett likes:

• 25 of its products sell more than $1 billion in product annually.

• Procter & Gamble owns 70% of the razor blade market, and 25% of fabric and laundry product sales globally.

• It’s increased its dividend for 57 years in a row.

• Its products grow naturally, helped by inflation in prices and population growth over time, making it a perfect buy-and-hold Buffett stock.

4. American ExpressBerkshire Hathaway owns 14.1% of American Express

Buffett’s history with American Express goes all the way back to 1964.

What Buffett likes: • He bought his first shares cheap, following the so-

called “Salad Oil Scandal,” which sent its share price down 50%.

• The company benefits from the “network effect” as each new cardholder and point of sale adds to its moat.

• American Express focuses on high-income, high-net worth spenders, earning more per customer than other card companies.

3. International Business Machines

Berkshire Hathaway owns 6.2% of IBMA new holding, Buffett first bought IBM in 2011. Shares are up 7% compared to the 52% of the S&P 500. Even still, Buffett continues to add to his position.

What Buffett likes:

• He’s familiar with the business, reading its annual reports “probably…every year for 50 years.”

• IBM consistently lays out 5-year plans, and benchmarks its performance routinely.

• It repurchases shares year after year, reducing share count by 36.6% in the past 10 years.

2. Coca-Cola

Berkshire Hathaway owns 9% of Coca-ColaWarren Buffett first bought Coca-Cola in 1988.

What Buffett likes:

• Buffett saw the obvious. Cola has no taste memory, so the 5th Coke you drink tastes just as good as the first. Over time, cola consumption only went up.

• Coca-Cola has a wide moat stemming from its worldwide distribution. You can find its products in every country around the world except for Cuba and North Korea.

• Coca-Cola’s brand is one of the most recognizable in the world.

1. Wells FargoBerkshire Hathaway owns 8.7% of Wells Fargo

Warren Buffett first bought Wells Fargo shares in 1990.

What Buffett likes:

• Wells Fargo is a perfect Buffett stock -- understandable with a wide moat.

• The company leads in mortgage origination, and has a simpler balance sheet than other banking giants.

• Wells Fargo’s cost of funds is lower than most banks in the United States as it generates the bulk of its financing from low-cost deposits.

• The company leads in “share of wallet” -- getting its existing customers to use more Wells Fargo products and services.

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