September is here, and it looks like the Federal Reserve’s Federal Open Market Committee just might lower its benchmark interest rate again when it meets next week. Many stocks, especially those of companies that are particularly sensitive to interest rates, are already climbing in anticipation.

As a bank and credit card network, American Express (AXP -0.28%) is very sensitive to interest rates. It was a standout stock last year, gaining 58%, and its gains so far this year are roughly in line with the S&P 500. If the federal funds rate gets the expected cut, Amex could benefit in a big way, and its stock could start to outperform again.

Standing out in finance

American Express is known for its credit and charge cards, but the company has become a lot more than that. It has a large banking segment that works together with its card network to create a closed-loop model, but each segment adds its own unique value to the whole.

American Express targets an upscale clientele that prizes its card rewards programs, which offer travel perks and points, as well as discounts at premium shopping locations and restaurants. The company charges annual fees to cardholders for these privileges, and the fee income is a major part of its model. As a bank, American Express targets small businesses and offers a more boutique experience than many larger institutions.

The bank also provides the credit to people using its cards, so it doesn’t need to work with partner institutions. This also makes American Express a business that can perform well in different economic environments. When interest rates are higher, it makes more net interest income on its deposits. When the economy is doing well and customers are spending, it thrives. However, it usually demonstrates resilience when the economy is under pressure since its core customers have more money to spend, and since it collects its annual fees regardless of the macro conditions. That important recurring revenue stream keeps its profits coming in smoothly.

Gaining momentum

This all played out perfectly in 2025’s second quarter. American Express’s revenue increased 9% year over year (currency neutral) despite continued macroeconomic pressure, and adjusted earnings per share were up 17%. Card fees increased by 20% and accounted for almost 14% of the total.

There was record cardmember spending in the quarter and high demand for premium products. The company frequently “refreshes” its card offerings and perks to stay relevant and attract new members, and it said it’s going to launch a “major upgrade” to its U.S. business and personal platinum cards in the fall. If that coincides with greater access to money due to lower interest rates, it could be a recipe for robust growth.

It’s also focusing more on appealing to younger people, and that’s paying off. While there was 7% increase year over year in cardmember spending in the second quarter, there was a 39% in Gen Z spending, and a 10% increase in millennial spending. Gen X still accounted for the most total spending of any age category at 36%, but the higher growth in younger categories bodes well for the bank’s future.

A longtime Buffett favorite

Warren Buffett has praised American Express’ global brand and the fact that it doesn’t have to spend a lot of money to make a lot of money. He also loves to invest in companies that pay dividends and give back to shareholders through stock repurchase programs. American Express’ dividend yields 0.9% at the current price. That’s not a high yield, but its payouts are reliable, management has a long track record of maintaining or hiking them, and it repurchased $1.4 billion in stock in the second quarter. American Express is the paradigm of the Buffett stock, and he frequently references it as an example of a great business.

If the Fed cuts interest rates as expected this month, American Express stock should jump. More importantly, higher economic activity should boost its business.

American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

One of Berkshire Hathaway (BRK.A -0.13%) (BRK.B -0.06%) CEO Warren Buffett’s best investments of all time was Apple (AAPL 1.21%). At one point, Apple stock made up about 50% of Berkshire’s investment portfolio. However, Buffett started selling off Apple stock in fourth-quarter 2023, and he has steadily decreased his position ever since.

He didn’t sell any from third-quarter 2024 until now, so this further selling is noteworthy for Berkshire and Buffett. The question is, does Buffett know something that we don’t, or is there something else going on here?

Apple’s stock is no longer cheap

Apple is the leading consumer tech brand in the U.S., and it has a strong customer base outside the U.S. as well. When Buffett first took a position in first-quarter 2016, Apple was an undervalued company despite its broad audience. That call turned out to be one of the best investments of Buffett’s career, but to label Apple undervalued now is ignorant.

Apple’s trailing price-to-earnings (P/E) ratio has climbed steadily over the past decade and is currently near its highest level.

AAPL PE Ratio data by YCharts.

Over that same timeframe, Apple experienced some healthy growth, but it’s currently growing at the same pace it was when it had a far more reasonable valuation.

AAPL EPS Diluted (Quarterly YoY Growth) data by YCharts.

Apple’s stock is trading at a premium without the growth to back it up, and this is likely part of the reason Buffett is selling Apple stock. It’s also telling that Buffett hasn’t made any big purchases with the proceeds of his Apple stock sales, as it indicates that he likely sees most stocks trading at too expensive a premium to warrant buying now.

But there’s also the thought that Buffett is setting up the portfolio for his successor.

Buffett may be freeing up more cash for the incoming CEO

At the end of the year, Warren Buffett will step down as Berkshire’s CEO, and Greg Abel will succeed him. If Buffett gets the investment portfolio to a more balanced position and leaves him with a ton of cash, Abel will be able to run things as he sees fit without needing to undo a bunch of decisions that he may not have agreed with.

With Berkshire’s cash and short-term investments totaling $344 billion, Abel will have a massive cash pile to use to make investments.

Time will tell whether Abel follows in Buffett’s footsteps or makes more aggressive or conservative decisions, but it’s hard to imagine being more conservative than Buffett is with how much cash is on the balance sheet.

Apple is still a massive chunk of Berkshire’s portfolio, making up about 22% of the total value. But its second-largest holding, American Express, makes up 19% of the total value, and it’s not far off from overtaking Apple as Berkshire’s largest investment.

Considering how expensive Apple is for its relatively slow growth, I wouldn’t be surprised if there are a few more sales announced in the coming quarter. But we’ll have to wait for another three months to find out about that. If you’re an Apple investor sitting on huge gains, I think taking heed of Buffett’s action is a smart idea, as there are far more attractive investment opportunities out there than Apple.

Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.

Warren Buffett is departing as Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO at the end of 2025, but that doesn’t mean his stock ideas are, or won’t be, worth following. The five stocks below that are in Berkshire Hathaway’s portfolio look especially promising.

1. Amazon

Amazon (AMZN -0.33%) is one of the most promising artificial intelligence (AI) stocks that investors can buy. The company is incorporating AI into its e-commerce platform to drive efficiencies and profitability. But it’s really Amazon Web Services (AWS) that’s leading the way.

After years of heavy investment, AWS remains the largest cloud infrastructure provider in the world, with a 30% market share. That’s nearly as much as the next two competitors combined. Because AI companies typically don’t build out their own compute infrastructure, AWS has been a prime beneficiary of higher spending and demand for AI services. AI companies essentially rent server space from AWS to train, deploy, and execute their models. In a sense, that puts Amazon at the center of the AI revolution.

As of the last reporting period, Berkshire owns roughly 10 million AMZN shares comprising 0.8% of its publicly traded portfolio. It’s a stock worth buying right now.

2. Visa

As a business, Visa (V 0.90%) is a master in network effects. When paying for an item at a store, shoppers want to know that their means of payment will be accepted. Merchants, meanwhile, only want to accept forms of payment that customers want to use. This dynamic naturally consolidates the payment market. It’s why the credit cards in your wallet only work on a few networks.

For years, Visa has been the largest credit card network in the U.S., with an estimated 57.5% market share. Only one other company has garnered a double-digit market share. Critically, Visa’s market share has actually increased in recent years despite its dominant position — a strong sign that network effects are continuing to fuel the business.

Berkshire owns around 8.3 million shares of Visa, which comprise 1% of its publicly traded portfolio.

3. Mastercard

Much of what was said about Visa above is true for Mastercard (MA 0.90%). It holds a 37.5% market share for credit cards in the U.S., essentially granting Visa and Mastercard a duopoly.

Berkshire owns nearly 4 million shares of Mastercard, equating to a 0.8% portfolio weighting. So Buffett may favor Visa a bit more. But by holding both, Buffett seems to be betting on the business model and market consolidation in general, not on one company over the other. So if you’re thinking about buying either Mastercard or Visa, consider following Buffett and buying both.

4. Apple

Apple (AAPL 0.07%) remains Berkshire’s biggest position, despite some sizable stake sales in recent years. Berkshire owns a massive 300 million-share stake worth around $64 billion — more than 16% of Berkshire’s total publicly traded portfolio.

While you may own an Apple iPhone or computer, it’s Apple’s software ecosystem that accounts for its large weighting in Berkshire’s portfolio. “Once you are fully invested in the [Apple] App ecosystem and you have got your thousands of photographs up in the cloud and you are used to the keystrokes and functionality and where everything is, you become a sticky consumer,” one of Buffett’s lieutenants, Ted Weschler, said in 2016.

As mentioned, Berkshire has been dumping Apple stock recently. Shares seem pricey at 33 times earnings, despite tepid revenue growth expected for 2025. But it remains a dominant holding even with the heavy sales, and one worth buying.

5. Chubb

Chubb (CB -0.38%) is one of the least exciting stocks in Berkshire’s portfolio. But it’s one of my favorites.

Most people have never heard of Chubb, yet it’s one of the largest global insurance companies in the world, offering property and casualty insurance, accident and health insurance, reinsurance, and life insurance products. It’s a competitive business, but Chubb has maintained industry-leading profit levels for years.

Trading at 13.4 times earnings, Chubb is one of the cheapest stocks in Berkshire’s portfolio. Don’t expect shares to keep up in a strong bull market, but this is a relatively reliable business to own if volatility kicks up. Berkshire owns nearly 7% of the company, equating to a 2.4% portfolio weighting, and it’s a stock to buy now.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway, Mastercard, and Visa. The Motley Fool has a disclosure policy.

Warren Buffett’s tremendous success as an investor didn’t come from trying to time the market, nor from predicting which stocks would go up or down in the near term. Those are impossible tasks, he has noted on multiple occasions. Instead, the primary thing that Buffett and his team at Berkshire Hathaway (BRK.A 0.29%) (BRK.B 0.10%) do is try to determine whether a business, at that particular moment, is worth more or less than its market price.

That strategy has led to some phenomenal results. Berkshire Hathaway stock has grown at a compound annual rate of about 20% since 1965, when Buffett took control of what was then a failing textile business. To put that in perspective, the S&P 500 (^GSPC -0.01%) has produced compound annual returns of just 10.4% over that time. 

As impressive as that may sound, it can be hard to grasp just how vast that difference becomes when compounding has decades to work its magic. From 1965 through 2024, an investment in the S&P 500 (with dividends reinvested) would have multiplied in value by about 390 times. The same investment in Berkshire would have risen by more than 55,000 times.

In short, buying stocks that are fundamentally worth more than the market thinks they are works. But in recent times, Buffett has concluded that many of the equities in Berkshire’s portfolio might not be worth as much as the market is paying for them. Further, he has found the pickings quite slim in terms of potential new equity holdings to buy. As a result, Berkshire Hathaway has been a net seller of stocks for 10 consecutive quarters. In that period, Buffett and his team have sold $174 billion more in stocks than they bought.

Two of the biggest positions recently getting trimmed at Berkshire Hathaway were Apple (AAPL 0.46%) and Bank of America (BAC 0.64%). The conglomerate cut its stakes in them by 67% and 39%, respectively. With some of the proceeds from those sales and others, Buffett has been piling into a high-yield investment that’s paying around 4.3% as of this writing.

Cutting some of his biggest holdings

At one point, Apple stock accounted for more than half the value of Berkshire’s equity portfolio. Buffett first purchased shares of the iPhone maker in 2016 when it traded for around $25 on a split-adjusted basis. Over the next few years, he built a massive stake in the stock, pouring an estimated $36 billion into it by late 2018.

When Buffett made his initial investment in Apple, it was trading at a P/E multiple of around 10. That was an incredible value for the stock, even as the company was experiencing a downturn in net income. Buffett saw the value of the iPhone and the Apple ecosystem, noticing how attached people were to their smartphones. He expected the business to turn around, thanks to Apple’s brand strength, its leading position in smartphones, and its strong free cash flow. Sure enough, the stock soared over the next eight years.

But by late 2023, it had climbed to above 30 times earnings, which is an extremely high multiple for a company growing its earnings per share at a single-digit percentage annual rate. That was enough to convince Buffett to start taking some cash off the table. From October 2023 through September 2024, he sold more than two-thirds of Berkshire’s stake in the tech giant.

Apple remains the largest holding in Berkshire’s portfolio, accounting for nearly 22% of its value. But given its forward P/E of 29, it’s unlikely that Buffett plans to start adding to the position again in the near future, absent any significant developments.

Bank of America was Berkshire’s second-largest holding as of last summer. But over the last three quarters, Berkshire has trimmed its stake in the company by 39%. Bank of America remains Berkshire’s third-largest holding based on the company’s most recent 13F filing with the Securities and Exchange Commission. But Buffett may have continued selling the stock in the second quarter.

Berkshire’s original stake in Bank of America came from stock warrants received in connection with preferred shares Buffett picked up in 2011 through a special deal he made while Bank of America was struggling. Those preferred shares paid nice dividends, but in 2017, it became more lucrative to own the common stock instead. So, Buffett exercised his warrants and converted the preferred shares into common stock, then proceeded to gradually add to the position through 2020.

Again, valuation seems to be the biggest reason for Buffett’s decision to book some profits on his Bank of America investment. The stock’s run-up in price has been fueled by expectations that interest rates will decline. Bank of America has longer-dated debt on its balance sheet that struggled when the Federal Reserve was hiking interest rates, but that will leave it well positioned relative to its peers when interest rates decline. But as the stock price climbed over the past couple of years, its price to tangible book value did too. That ratio has exceeded 1.6 for much of the past year. It currently trades closer to 1.7, well above its 10-year average of 1.49.

The investment paying Berkshire $13.5 billion per year

Those massive stock sales put a lot of cash in Berkshire Hathaway’s coffers. As mentioned, Buffett’s stock sales outpaced his purchases by $174 billion over the past two and a half years. While a sizeable chunk of that cash went toward paying Berkshire’s massive tax bill from last year, almost all of the rest went toward a single investment holding.

As of the end of the first quarter, Berkshire held $314.1 billion in U.S. Treasury bills on its balance sheet. With those bonds delivering an average yield of around 4.3%, the company is in line to collect $13.5 billion in 2025 just from interest on its government bond holdings. That number could climb higher if Buffett buys more T-bills throughout the year.

A $13.5 billion payout for doing nothing but supporting the U.S. government isn’t a bad deal. Berkshire’s total income from operations in 2024 was $47.5 billion. But Buffett has made it clear that he would rather invest Berkshire’s growing pile of cash (Treasury bills are considered a cash equivalent) in equities instead of bonds.

“Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities,” Buffett wrote in his 2024 letter to shareholders.

The challenge Buffett currently faces is that most stocks on the market are expensive from a valuation standpoint. That’s especially true for stocks that he could buy in quantities large enough that they could actually move the needle for a giant like Berkshire Hathaway. With nearly $350 billion to deploy, Berkshire’s universe of investable stocks is limited to those with large market caps that can absorb billions of dollars of capital. Unfortunately, large-cap stocks trade at much higher valuations these days. Illustrating that trend, the S&P 500’s forward P/E ratio has climbed above 22 to one of its highest levels since the dot-com bubble, save for a few quarters in 2020 and 2021 (ahead of the 2022 bear market).

If Buffett were a smaller investor with just a few million dollars to invest, he’d surely be able to find great opportunities in the market. The small- and mid-cap indices trade for around 16 times expected forward earnings. Even the equal-weight S&P 500 index trades at just 17.6 times earnings, reflecting the fact that smaller members of the index are trading at more attractive values than its largest components.

Investors who take the time to research individual companies outside of the largest and most well-known names in the market can find some great companies worth more than their current market values. And if you consistently buy those stocks, you can generate excellent returns over the long run.

David Butler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Visa. The Motley Fool has a disclosure policy.

Many financial experts tout dollar-cost averaging as a smart way to invest your money in the stock market. Warren Buffett disagrees, at least in some cases.

Dollar-cost averaging is a strategy in which you take a set amount of cash and invest it in securities on a periodic basis. It’s often advised for investors sitting on a lump sum of cash who want to minimize their risk of paying too much for a stock.

There’s no investor sitting on more cash than Warren Buffett right now. Berkshire Hathaway (BRK.A 0.59%) (BRK.B 0.53%) ended the first quarter with more than $348 billion in cash and Treasury bills. But Buffett has been fine stacking cash and waiting for an opportunity in the market. At Berkshire’s shareholder meeting this year, he even went so far as to say if he was forced to invest $40 billion or $50 billion per year from the cash pile and Berkshire’s operating cash flow, “that would be the dumbest thing in the world to invest in that manner.” He’s not going to dollar-cost-average into the market with Berkshire’s money.

But Buffett did carve out a key exception for some investors. And it might be one of the smartest things you can do with your money.

What game are you playing?

When it comes to investing, there are a lot of different routes you can take. A far-from-exhaustive list includes:

• Trading: Looking to take advantage of short-term price changes in a specific security.
• Speculating (as venture capitalists do): Putting a lot of small bets on promising businesses, with expectations that only a handful will actually pay off while the rest go to zero.
• Buy-and-hold investing: Buying stakes in companies with expectations for long-term appreciation.
• Passive investing: For instance by buying index funds that aim to match the returns of a set benchmark.

There are many different tactics you can use to play each of those games, and each of them is winnable.

Buffett has played multiple games in his lifetime, but his most successful game by far has been buy-and-hold investing. Berkshire Hathaway’s average annual return for shareholders is nearly double that of the S&P 500 since Buffett took over in 1965.

One of the key tactics Buffett uses to succeed at buy-and-hold investing is remaining patient and ensuring he’s well-positioned to take advantage of opportunities when they inevitably arise. “We have made a lot of money by not wanting to be fully invested at all times,” he told the audience at this year’s shareholder meeting. Sitting on cash gives Buffett the flexibility to take advantage of the rare opportunities that offer extremely high upside.

He made incredible investments in the wake of the financial crisis (including Bank of America). He was able to put tens of billions of dollars into Apple stock when it traded at an unreasonably low valuation. More recently, he had a once-in-a-lifetime opportunity to invest in Japanese trading houses. But similar opportunities aren’t popping up every month. As a result, Berkshire Hathaway has seen its cash reserves pile up to record values in recent quarters, as Buffett awaits another great opportunity.

That’s the tactic that’s served him well. And anyone emulating Buffett will likely do best by keeping some cash reserves in their portfolio most of the time. With valuations climbing to the levels they’re at today, combined with relatively high interest rates on cash savings, piling up some cash right now makes a lot of sense.

But if you’re playing a different game than Buffett — and many people are — he takes a totally different attitude to dollar-cost averaging.

The big exception

If you’re not trying to beat the average returns of the S&P 500 or some other benchmark index, the best thing you can do is invest in an index fund. But if you want to ensure your returns match the index, you must be fully invested.

“We don’t think it’s improper, actually, for people who are passive investors just to make a few simple investments and sit for their life in them,” Buffett told shareholders, suggesting that remaining fully invested in an index fund at all times is a good strategy for many.

Where dollar-cost averaging does make sense — and I think Buffett would agree — is when it applies to setting aside some cash from your earnings and systematically investing the same amount every month (or whatever period makes sense).

However, if you’re a passive investor already sitting on a lump sum of cash, Buffett would likely suggest you invest that in your index fund of choice immediately. Indeed, the expected value of a lump-sum investment is considerably higher than dollar-cost averaging over time. That’s because stocks, on average, increase in value.

Unfortunately, many investors fail to adhere to Buffett’s lone exception to dollar-cost averaging. They forget what game they’re playing. As a result, the average index-fund investor ends up underperforming by 0.8% per year, according to research from Morningstar.

If you want to be a successful passive investor, you have to use different tactics than Buffett, the successful buy-and-hold investor. In some cases, that means doing the opposite of what he does.

Bank of America is an advertising partner of Motley Fool Money. Adam Levy has positions in Apple. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has a disclosure policy.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

At Berkshire Hathaway‘s (BRK.A 1.53%) (BRK.B 1.31%) latest annual meeting on May 3, Warren Buffett announced that he would step down as its CEO at the end of the year. That announcement wasn’t surprising, since the celebrated investor will turn 95 in August. Buffett had also previously appointed Greg Abel, the CEO of Berkshire Hathaway Energy, as his successor.

Abel has been with Berkshire for 25 years, but he isn’t an acclaimed stock picker like Buffett. He probably won’t stray too far from Buffett’s playbook of investing in stable and cash-rich businesses, but he also might fail to spot as many good long-term investments.

So instead of waiting to see if Abel can add some new long-term winners to Berkshire’s massive portfolio, investors can simply buy three of Buffett’s older picks — Amazon (AMZN 0.18%), Kroger (KR 1.77%), and Coca-Cola (KO 0.56%) — and hold them forever.

1. Amazon

Amazon is the largest e-commerce and cloud infrastructure company in the world. Berkshire bought its first shares of Amazon in the first quarter of 2019, and it now holds 10 million shares with a market value of $2.05 billion. That represents 0.7% of Berkshire’s entire portfolio.

Amazon generates most of its revenue from its retail business, but most of its profits come from its Amazon Web Services (AWS) cloud platform. AWS’ high profits enable Amazon to expand its Prime ecosystem with discounts and other lower-margin strategies. The company serves 220 million Prime members worldwide.

Over the long term, Amazon’s retail business — which includes its e-commerce marketplaces and Whole Foods Market stores — should continue to grow as it locks in even more Prime subscribers. AWS should also benefit from the secular expansion of the AI market as more companies expand their cloud infrastructure to accommodate the latest AI applications.

From 2024 to 2027, analysts expect Amazon’s revenue and earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 10% and 17%, respectively. Amazon’s retail business faces some near-term pressure from the tariffs and it might not seem cheap at 33 times forward earnings, but it’s still one of the best long-term plays on the growing e-commerce and cloud markets.

2. Kroger

Kroger is America’s largest supermarket operator by annual revenue. It also owns a wide range of other banners — including Fred Meyer, Ralphs, Dillons, Fry’s Food Stores, King Soopers, and Baker’s — and it nearly merged with Albertsons in a $24.6 billion deal last year. Berkshire started to invest in Kroger in the fourth quarter of 2019, and now owns 50 million shares worth nearly $3.4 billion. That’s 1.2% of its entire portfolio.

Kroger stayed ahead of its competitors with three core strategies: bolstering its digital and loyalty programs, launching more private label products, and expanding its smaller advertising and health services segments. Kroger’s scale helped it resist inflation, recessions, and other macro headwinds, and the company is diversifying supply chains to mitigate the impact of the Trump administration’s unpredictable tariffs.

Kroger’s bid for Albertsons was scuttled by antitrust regulators, but Kroger subsequently allocated a lot of that cash toward a fresh buyback plan worth up to $7.5 billion. From fiscal 2024 (ended this February) to fiscal 2027, analysts expect revenue and EPS to grow at a CAGR of 2% and 13%, respectively. Kroger stock still looks cheap at 14 times forward earnings, it pays a decent forward yield of 1.9%, and it’s a good forever play on the resilient supermarket sector.

3. Coca-Cola

Coca-Cola, the world’s largest beverage company, has been in Berkshire’s portfolio since 1988. Its 400 million shares are now worth $28.6 billion and account for 10% of its total holdings. Buffett even often claims to drink about five cans of Coca-Cola every day.

Coca-Cola might seem like a risky investment, since soda consumption rates are declining worldwide. However, the company has diversified its portfolio with more brands of bottled water, sports drinks, energy drinks, teas, fruit juices, coffee, and even alcoholic beverages to offset that pressure. It also refreshed its classic sodas with new flavors, smaller serving sizes and sugar-free versions.

Coca-Cola isn’t heavily exposed to the tariffs because it only sells concentrates and syrups. Its bottling partners, which function as independent businesses, actually produce and sell the finished drinks. Those bottlers currently face higher tariffs on aluminum, but they can easily offset that pressure by using more plastic bottles. They could also raise prices and pass some of those costs on to the consumer.

From 2024 to 2027, analysts expect Coca-Cola’s revenue and EPS to increase at a steady CAGR of 4% and 11%, respectively. The company’s stock looks reasonably valued at 25 times forward earnings, pays a high forward yield of 3%, and it’s a Dividend King that has raised its payout for 63 consecutive years. All of those strengths make Coca-Cola a great stock to buy and hold forever.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Amazon and Berkshire Hathaway. The Motley Fool has positions in and recommends Amazon and Berkshire Hathaway. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. American Express is an advertising partner of Motley Fool Money. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, Microsoft, and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.