28.4% Of Warren Buffett's $303 Billion Portfolio Is Invested In 3 Stocks He Plans To Hold Forever

One of the most famous Warren Buffett quotes comes from his 1988 letter to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shareholders: "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."

But while Buffett would prefer to hold the stocks he buys forever, it's rare he's in a position to do so. Just this past year, Buffett sold over $134 billion worth of stocks from Berkshire's portfolio as he saw valuations of some holdings climb to a point where it no longer made sense to remain so heavily invested.

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But free from the chopping block were three stocks Buffett's called out in recent years, saying he has no intention of selling shares. Combined, they account for about 28.4% of Berkshire's $303 billion portfolio as of this writing, and they may deserve a spot in your portfolio as well.

American Express (15.9%)

Buffett is a long time fan of American Express (NYSE: AXP). He bought 5% of the entire company through Buffett Limited Partnership in the 1960s prior to taking his position as the CEO of Berkshire Hathaway. He didn't forget about Amex, accumulating a substantial stake in the business in the early 1990s, and he's held onto those shares ever since. That stake is now 21.5% of the entire business as a result of Amex's share repurchases.

Amex is a much different credit card issuer than other banks. Instead of partnering with a third-party payment network like Visa or Mastercard, American Express operates the network itself.

Whenever you swipe your credit card, the merchant has to pay a fee, usually a percentage of the transaction amount. A portion of that fee goes to the issuing bank, a portion goes to the payment network, and a portion goes to the payment processor. Since Amex positions itself as both the issuing bank and the network operator, it controls more of the economics of the transaction.

All those swipe fees add up, too. Amex calls these fees discount revenue, and it brought in $35.2 billion in 2024. While discount revenue was slow in most of 2024 as discretionary consumer spending remained depressed, it accelerated in the fourth quarter. That bodes well for 2025, especially because discount revenue accounts for the vast majority of Amex's total sales.

That said, the company is pushing its premium cards to more consumers while raising the annual fees across its lineup. Card fees added $8.5 billion in revenue in 2024, growing 16% year over year.

Amex stock has been on a tear over the last 15 months or so. Shares have more than doubled since late 2023, contributing to the position's heavy weight in Berkshire's portfolio. While its financial results have been strong, they aren't nearly as strong as the stock's price performance. As a result, the stock currently trades for a forward PE of 21. That price might be worth it if we continue to see a recovery in discretionary spending and Amex can continue to raise the annual fees on its cards. But it's historically expensive for the stock.

Coca-Cola (8.4%)

Buffett usually has a Coca-Cola (NYSE: KO) product on the table in front of him at Berkshire Hathaway's annual shareholder meetings. Not only is he a fan of the product, but he's also a big fan of the company. He first bought shares in the late '80s, adding to it in the early 1990s.

There are a few things Buffett finds appealing about Coca-Cola. First, it's one of the strongest brands in the world. That brand strength enabled it to raise prices over the last few years as inflation soared. Last quarter, it increased prices 10% year over year.

Second, Coca-Cola's scale gives it some significant advantages. It controls more of its supply chain, particularly its bottling operations. Additionally, its breadth gives it leverage in distribution agreements for better positioning and promotions. It can also use that leverage to get new products on shelves and in front of potential customers, enabling it to expand its product lineup more easily than smaller competitors.

Lastly, Buffett loves Coke's dividend. In his 2022 letter to shareholders, the Berkshire CEO pointed out his company received $75 million in dividends from Coca-Cola in 1994. In 2022, that number was $704 million from the same shares Berkshire owned in 1994. The position paid out $776 million in 2024, and that number will very likely climb higher in 2025. Coca-Cola has raised its dividend for 62 consecutive years.

Coca-Cola trades for a forward PE of around 22 as of this writing. That's roughly in line with its historic average and a fair price to pay for the business. While it probably won't produce the price appreciation it did for Berkshire Hathaway in the 1990s again, it can be counted on to consistently pay a growing dividend to shareholders quarter after quarter.

Occidental Petroleum (4.1%)

Occidental Petroleum (NYSE: OXY) is a relatively new addition to Berkshire's portfolio. Buffett established a position in the company with a big $10 billion purchase of preferred shares in 2019 to help Occidental acquire Anadarko Petroleum. Those preferred shares pay a dividend of 8% and come with warrants to buy the common stock at $59.62. As of this writing, Berkshire still held roughly $8.5 billion worth of preferred shares.

Buffett has also purchased a lot of Occidental stock on the open market over the last three years. With his most recent purchase in December, Berkshire now owns 28.2% of the company. It has regulatory approval to buy up to 50% of the stock, but Buffett says he has no intention of taking over the company.

Occidental is more exposed to the price of oil than other integrated oil and gas companies. Its position in the Permian Basin in the Southwest gives it one of the largest low-cost sources of oil in North America. Its acquisition of CrownRock last year bolstered that position, though the price of oil has since slipped.

CEO Vicki Hollub said the acquisition should produce an additional $1 billion in free cash flow during its first full year, assuming oil prices stay above $70 per barrel. The price hovered around that level for much of the end of 2024, but it's since recovered to the mid-$70s.

Buffett has praised Hollub on many occasions, suggesting nobody could run Occidental as well as her (perhaps a big reason he has no interest in taking a controlling stake of the company). He's willing to look past the volatility of oil prices, as he wrote in his 2023 letter to shareholders. "No one knows what oil prices will do over the next month, year, or decade. But Vicki does know how to separate oil from rock, and that's an uncommon talent, valuable to her shareholders and to her country."

The stock currently trades for an enterprise value just 5.3 times analysts' estimates for 2025 EBITDA (earnings before interest, taxes, depreciation, and amortization). That's just about the lowest price its traded for since the start of 2023. That makes it worth considering as an addition to your portfolio at this price. As mentioned, Buffett recently added to Berkshire's stake for roughly the same price it trades today.

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American Express is an advertising partner of Motley Fool Money. Adam Levy has positions in Mastercard and Visa. The Motley Fool has positions in and recommends Berkshire Hathaway, Mastercard, and Visa. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.