Warren Buffett is famous for his financial skills before he founded Berkshire Hathaway. He's not perfect, but his stock list might inspire investors. Three Berkshire Hathaway holdings are long-term winners with enticing potential.
1. Coke The Coca-Cola brand is known worldwide. It sells Coca-Cola, Sprite, and Fanta. The corporation doesn't rely only on soda due to consumers' changing tastes. It also sells water, juice, sports drinks, coffee, and plant-based drinks.
The corporation sells in over 200 countries and dates back to the 1800s. High growth rates are tough with a large presence in so many markets. After adjusting for foreign currency translation and acquisitions and divestitures, Coca-Cola's 12% sales growth last year is encouraging. Price and volume increases drove growth.
Coca-Cola pays good dividends. Dividend King stock has grown dividends for over 60 years due to the board of directors. That includes last month's 5.4% quarterly payout increase to $0.485. The corporation has enough FCF to justify bigger dividends. FCF was $9.7 billion last year, compared to $8 billion dividends. Coca-Cola pays 3.2% dividends, double the S&P 500's 1.4%.
2. Moody's Moody's (NYSE: MCO) has two significant businesses. The corporation has a well-known ratings and analytics business. Ratings companies evaluate debt securities. This division has a strong market share and little rivalry, although bond issuance affects its results. Other prominent players are S&P Global and Fitch Ratings.
Moody's analytics business helps customers manage risk with data, analytics, and software. Moody's may benefit from companies' growing data use. Both businesses thrive. Moody's revenue rose 8% to $5.9 billion and GAAP EPS rose 17% to $8.73. EPS should climb 8% to 17% this year, says management.
It's hard to call Moody's shares cheap. A 44 P/E ratio applies to the stock. That exceeds the S&P 500's 28 P/E. However, excellent enterprises, outstanding prospects, and strong market positions warrant a greater valuation.
3. DaVita(NYSE: DVA) is a major dialysis provider in the U.S. It treats kidney illness and has a strong market. US Renal Data Systems reported 556,000 end-stage renal disease patients in 2021. This increased over 3% annually during the past decade. DaVita is well-positioned to help them. In Q4, it treated 7.3 million patients, or 93,000 a day. Revenue rose 7.8% to $3.1 billion.
Management anticipates adjusted operating income, which includes closure expenses, to rise 5% to 14% this year. 2023 adjusted operating income for DaVita was $1.7 billion. The stock has gained almost 77% in the past year, yet its price is still fair. The S&P 500's multiple is far higher than 18 P/E.
An attractive investment, DaVita has promising long-term potential. Remember that you're buying a business, as Warren Buffett advised. Coca-Cola, Moody's, and DaVita are strong market leaders with attractive long-term investments.
stay turned for development