Warren Buffett’s investment track record and stock picks have long been a source of interest for investors. Two of his notable holdings, Coca-Cola and Moody’s Corporation, offer potential for solid returns. Coca-Cola, founded in the late 1800s, sells beverages in over 200 countries.
The company appeals to dividend investors, with a 3.1% yield and 62 straight years of dividend increases. In the first quarter, Coca-Cola’s adjusted operating income grew 13%, helping generate $9.7 billion in free
cash flow last year. This easily covered the $8 billion in dividends paid out.
Moody’s operates two strong businesses: a rating unit and an analytics segment, providing research and risk management services.
Insights on Buffett’s top holdings
In the first quarter, the
ratings business saw revenue rise 35% to $987 million, while the analytics division reported its 65th consecutive quarter of revenue growth, up over 8%.
Moody’s expects full-year earnings per share of $9.55 to $10.15, representing 9% to 16% growth. While Moody’s trades at a premium valuation compared to the overall market, with a price-to-earnings ratio over 48, the company’s bright long-term prospects in both businesses may justify the higher multiple for long-term investors. Coca-Cola and Moody’s offer different investment rationales, with Coca-Cola providing stable dividend income and delivering solid growth potential.
Investors can start positions in both stocks with small sums and add to them over time, such as through dollar-cost averaging. As with any investment, it’s important to do your own research and consider your financial goals and risk tolerance. However, Coca-Cola and Moody’s represent strong options for those looking to invest in well-established companies with proven track records, following in the footsteps of
Warren Buffett’s investment philosophy.
