7 Warren Buffet Stocks to Buy and Hold for the Next Decade
Warren Buffett’s portfolio is filled with stocks worth holding for the long term. That makes sense, given that his investment strategy centers on a holistic, long-term view of companies and stocks. His strategy doesn’t rely on outsmarting the supply-and-demand intricacies of the market. Instead, he focuses on firms that are likely to have staying power. It’s a simple, yet clearly powerful strategy that has allowed Buffett to amass a huge fortune and a net worth north of $100 billion. So it’s worthwhile for long-term investors to examine these Warren Buffett stocks that don’t get a great deal of attention.
| MDLZ | Mondolez | $67.30 |
| PG | Procter & Gamble | $152.20 |
| SNOW | Snowflake | $150 |
| AXP | American Express | $157 |
| KR | Kroger | $46.70 |
| BIIB | Biogen | $290 |
| ABBV | AbbVie | $165.30 |
Mondelez International (MDLZ)
Mondelez International (NYSE:MDLZ) is a snack maker with a large, balanced portfolio of attractive, international businesses. Given the company’s ability to leverage its significant presence in developed markets, while also rapidly expanding in emerging markets, it has a great deal of potential over the long term.
Mondelez International reported that it generated $7.76 billion of revenue during the third quarter. The company’s overall 8.1% year-over-year sales increase was impressive, and its balanced growth was intriguing.
Mondelez’s Europe and North America markets accounted for more than $5 billion of its Q3 sales. But its Asia, Middle East, and Africa unit contributed $1.7 billion of revenue, and the firm sold nearly $1 billion of products in Latin America.
Mondelez’s developed market revenues increased a modest 1.5% YOY, while its emerging markets boomed, with its sales soaring nearly 20% YOY. In short, the company’s steady cash flow from mature markets and its rapidly growing revenue from emerging markets leave MDLZ stock well-positioned to surge in the long term.
Procter & Gamble (PG)
Like Mondelez International, Procter & Gamble (NYSE:PG) is in the consumer packaged goods industry. Both PG and MDLZ tend to perform well during bear markets because they sell products that consumers need. However, unlike Mondelez, Procter & Gamble’s top line is not soaring 8% year-over-year.
Last quarter, Procter & Gamble reported that its sales rose by a modest 1% to $20.6 billion.
That said, Procter & Gamble is an incredibly old company that can trace its roots back to 1837 when its founders, William Procter and James Gamble, merged their businesses. The company has grown into one of the world’s most reliable companies.
During the last ten years, PG stock has provided an average annual return of 10.86%. Investors who purchased PG stock a decade ago and held onto it nearly tripled their investments. That’s the beauty of investing in dividend stocks. I believe that PG’s return over the next ten years will be just as strong.
Snowflake (SNOW)
Snowflake (NYSE:SNOW) stock is not particularly loved by the Street at this point. Analysts’ overall rating on the stock is “overweight,” and their median price target on the shares is 33% above their current level.
Tech stocks continue to underperform the stock market even as there are indications that the overall market is bottoming. As a result, many tech stocks are undervalued, making some rapidly growing tech stocks in sectors with strong, non-cyclical positive catalysts look attractive. Snowflake, a cloud data warehousing software company, is one such name.
The argument in favor of SNOW stock is simple but powerful. First of all, according to one report, the cloud data warehousing market will grow at an average compound annual rate of 31% between 2021 and 2026.
And the stock market will certainly become much stronger by 2026. Interest rates are going to come down, perhaps beginning in 2024, and tech stocks will be resurgent by then, if not sooner.
But Snowflake’s net loss of $590 million through the first nine months of 2022 is problematic in this environment.
In a year or two, however, investors will again fawn over comp0anies that are growing rapidly. As a result, SNOW stock is poised to reward long-term investors
American Express (AXP)
American Express (NYSE:AXP) stock tends to advance in a variety of operating environments. In other words, it is largely immune to macroeconomic pressures. The company’s latest earnings report validates that assertion and indicates that AXP stock is a strong buy for investors who plan to hold the stock for the coming decade.
American Express’ net income increased 3% year-over-year during the third quarter to $1.88 billion. Last year at this time, inflation was only beginning to become a serious concern, and the Fed’s benchmark interest rate remained near zero. The company did well in Q3 of 2021, as its earnings and revenue beat analysts’ average estimates.
In Q3 of 2022, its earnings per share again beat analysts’ mean outlook. My point is that American Express tends to be successful in most economic environments. It did well when things were booming in late 2021 and it continues to succeed late in 2022 even as concerns about the economy mount.
Further, American Express caters to an affluent customer base. That means it should outperform its peers because America’s rich are continuing to get even richer.
Kroger (KR)
Kroger (NYSE:KR) stock is as much a buy for the short term as it is for the long term.
There is no doubt that Kroger’s business continues to thrive. In short, consumers’ demand for essential goods remains very strong, sending Kroger’s 2022 EPS guidance for the remainder of the year higher. The grocery giant previously expected its full-year EPS to range between $3.95 and $4.05. However, due to continued strong demand, management raised that outlook to $4.05-$4.15.
This year, which has been difficult for most consumers, has been a boon to the grocer which has reported strong quarterly results throughout 2022.
Kroger’s position in the grocery industry may strengthen if its planned $20 billion merger with Albertsons (NYSE:ACI) closes. Kroger anticipates that the deal will be approved by regulators by early 2024.
In the wake of the transaction, Kroger’s market share will greatly increase, likely sending its stock higher over the next decade.
Biogen (BIIB)
Biogen (NASDAQ:BIIB) could be one of the best pharmaceutical stocks for investors to hold over the coming decades. That’s because Biogen is jointly developing and commercializing Lecanemab, a drug used to combat Alzheimer’s disease, with Japan’s Eisai.
Eisai recently presented the full results of a Phase 3 study of Lecanemab, which targets amyloid plaques in the brain. Scientists have for decades believed that the accumulation of amyloid plaque in the brain causes Alzheimer’s disease to develop and progress. So companies have long sought to understand how to develop drugs that inhibit and reduce such plaque.
The results are very promising, with Lecanemab reducing plaque after three months of treatment and continuing throughout the 18 months the study was conducted.
There are concerns about the drug, including worries that it could cause patients’ brains to swell, That said, the drug will probably be approved by the FDA. The market opportunity for amyloid-reducing therapies is estimated to be in the range of $20 billion. As a result, BIIB looks poised to be a strong pharma stock for the remainder of the 2020s.
AbbVie (ABBV)
Another one of Warren Buffett stocks in the pharma sector is AbbVie (NYSE:ABBV), which is also an excellent name to buy for long-term investors. And depending on one’s perspective, AbbVie is either in trouble or emerging from serious challenges.
On the one hand, AbbVie’s most recent sales numbers fell short of analysts’ average estimates. That momentarily reignited concerns about AbbVie’s near-term prospects, which have been fueled by the fact that the patent on its blockbuster arthritis drug, Humira, is due to expire in 2023. Humira has accounted for more than $200 billion of sales for AbbVie, so it’s easy to see why the Street is concerned about its patent expiring.
But even within the last few weeks, the mood towards ABBV has changed, as investors are becoming increasingly positive that AbbVie can further develop some of the therapeutics in its pipeline, filling the gap that will be left when Humira loses its patent protection.
Humira did account for $5.559 billion of AbbVie’s $14.812 billion of revenues in Q3. But the markets seem to believe that the sales of two of AbbVie’s other, most successful drugs– Skyrizi and Rinvoq — will fill the gap.
The company’s cancer therapeutic, Imbruvica, is also showing promise. And the stock will reward investors with a dividend yield of 3.57%, which endears the stock to the fans of Warren Buffett’s investment style.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
