If any investor has stood the test of time, it is Warren Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world. His annual Berkshire Hathaway shareholders meeting draws literally thousands of loyal fans who are investors. Known for his long buy-and-hold strategies and his massive portfolio of public and private holdings, Buffett remains one of the preeminent investors in the world.
The rally since the beginning of the year has been a welcome relief for beleaguered investors, but some dark clouds are on the economic horizon. Massive layoffs; manufacturing slowing; inflation, while dropping, still way above the Federal Reserve’s target; geopolitical issues with China; the ongoing Russia-Ukraine war; and more are all real concerns for investors.
We screened the Berkshire Hathaway portfolio looking for companies seemingly poised not only to thrive in the current higher interest rate environment but possibly to benefit. While all seven are rated Buy across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Citigroup
This top bank has rallied nicely off the lows and Buffett bought $2.5 billion worth of stock back in the summer of 2022. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations and governments a broad range of financial products and services.
Citigroup offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. And it operates and does business in more than 160 countries and jurisdictions in North America, Latin America, Asia and elsewhere.
Trading at a still cheap 7.5 times estimated 2023 earnings, Citigroup looks very reasonable in what remains a volatile stock market and in a sector that has dramatically lagged.
Investors receive a 4.62% dividend. BMO Capital Markets has a $62 price target on Citigroup stock, while the consensus target is $55.72. The shares closed on Monday at $44.10 apiece.
Coca-Cola
This stock not only offers safety but comes with an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It remains a top Buffet holding, as he owns a massive 400 million shares.
Led by Coca-Cola, one of America’s most trusted food and drink brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Shareholders receive a 3.01% dividend. The $70 Barclays target price is in line with the consensus target of $70.02. Coca-Cola stock closed at $60.88 on Monday.
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