Warren Buffett has long been a guiding light for investors, showcasing how a steadfast strategy of buying and holding great businesses can significantly benefit shareholders. As we look at Berkshire Hathaway’s portfolio, valued at an impressive $271 billion at the end of 2024, the question arises: which stocks should you consider for long-term ownership? Three Fool.com contributors have zeroed in on Amazon, Apple, and Domino’s Pizza—each a powerhouse in its respective market. Let’s dive into why these stocks are favored investments for the next two decades.
The E-commerce Giant: Amazon (AMZN)
Why Amazon Stands Out for Long-Term Investors
If there’s a company that represents a tremendous opportunity at a bargain price in today’s market, it’s Amazon. With control over about 40% of the U.S. e-commerce market, Amazon is not just a player; it’s the game-changer. The e-commerce sector is growing, and there’s no sign of it slowing down.
- Diverse Offerings: Amazon continually enhances its platform by adding new brands and products, expanding its selection, and thereby raising its prominence.
- Efficiency in Delivery: The company has revamped its distribution network to improve delivery speed and reduce costs, setting new standards for customer satisfaction.
- AI Opportunities: Amazon is becoming synonymous with artificial intelligence. As an early entrant into generative AI, Amazon Web Services (AWS) has developed a comprehensive suite of tools tailored to meet a wide range of client requirements.
Current Market Position
Amazon’s stock price has recently dropped by 26% from its recent high and is trading with a P/E ratio of just 35, near its lowest in a decade. For long-term investors, this creates an attractive entry point for one of Buffett’s favorite picks.
The Consumer Electronics Powerhouse: Apple (AAPL)
Investing in Apple’s Brand Authority
When you think of consumer brands, Apple is paramount. Warren Buffett, in particular, has leaned into Apple due to its unrivaled market dominance and relentless innovation.
- Revenue and Profitability: Apple generates an astonishing $395 billion in annual revenue, with the iPhone alone accounting for nearly half of that figure.
- High Returns: With a 61% return on capital, Apple is exceptionally good at converting investments into profit—an aspect that Buffett deeply values.
- Stellar Brand Loyalty: The customer satisfaction tied to Apple products is unparalleled, helping to push its services sector revenues to $100 billion annually—a segment with higher profit margins than hardware sales.
A Timeless Favorite: Domino’s Pizza (DPZ)
Why Domino’s Pizza is a Savvy Investment Choice
Buffett often champions businesses with an "economic moat," and Domino’s embodies this principle with its global reach and commitment to quality.
- Global Pizza Leader: With over 21,300 locations across 90 countries, Domino’s is the largest pizza franchise worldwide. Its strong reputation is built on convenient delivery and tasty food at competitive prices.
- Track Record of Growth: The company recently marked its 31st consecutive year of comparable-store sales growth, indicating resilience and demand even in tough economic times.
- Franchise Model: Domino’s small-footprint franchise model makes it attractive for partners, ensuring stable expansion and presence.
Future Growth Potential
Despite being a well-established brand, Domino’s still has room to grow, recently opening 775 new stores in 2024. The love for pizza is likely to continue, as is the appeal of its brand promise of convenience and value.
Key Takeaways for Investors
In investing, following the footsteps of proven leaders like Warren Buffett can be both educational and rewarding. Here are some compelling reasons to consider the three stocks mentioned:
| Stock | Strengths | Current Price Performance |
|---|---|---|
| Amazon (AMZN) | Dominates e-commerce, robust AI offerings | Down 26% from recent highs |
| Apple (AAPL) | Strong brand loyalty, high profit margins | High returns, steady growth |
| Domino’s Pizza (DPZ) | Global leader, consistent sales growth | Resilient even in downturns |
Conclusion: Time to Take Action!
Investing in Amazon, Apple, and Domino’s Pizza isn’t just an opportunity; it’s a chance to ride the wave of growth within industries that continue to thrive. Whether you’re looking for a value investment, brand loyalty, or robust growth potential, these companies align perfectly with Buffett’s timeless investment philosophy.
Have you thought about adding any of these stocks to your portfolio? Start researching them today, and you might just set yourself up for remarkable returns in the next 20 years!
