It makes sense to look for Warren Buffett stocks to buy and hold, After all, Buffett is often touted as the greatest investor of all time.
With a net worth over $100 billion from a lifetime of investing it’s hard to argue against that notion. Over the last 10 years, Berkshire Hathaway (NYSE:BRK.B) shares have provided an average return of 11.39% (1). That is further data in support of his incredible investment prowess.
It also raises the question of which Warren Buffett stocks to buy and hold for the next decade.
Any investor seeking to do so could simply purchase shares of BRK.B stock. But those holdings include stronger and weaker performers over the time the company has held them. And all of Buffett’s choices are well-vetted and have potential in any case. So picking individuals among them isn’t a poor strategy overall.
Let’s consider some of the more attractive choices that are the best Warren Buffett stocks to buy and hold
|LPX||Louisiana Pacific Corp||$61.32|
|JNJ||Johnson & Johnson||$175.64|
Louisiana Pacific Corp (LPX)
Louisiana Pacific Corp (NYSE:LPX) stock might not seem like a great investment currently, but you’ll see over time that it is one of the best Warren Buffett stocks to buy and hold.
The company designs and manufactures engineered wood products. So it might not seem appealing as the housing market continues to slow on waning demand due to rising interest rates and higher mortgages.
In the last quarter, Louisiana Pacific has faced issues. Net sales from continuing operations fell 16% to $852 million. And broad economic concerns of a catastrophic housing collapse will keep LPX investors on edge. But there’s plenty of room for optimism in the long term.
The company sold 27% more siding, accounting for $392 million during the quarter. There’s an argument to be made that existing house owners who want to increase the value of their homes could re-side them. The company has a strong product that it can sell to satisfy that demand.
Fewer homeowners will sell due to high mortgage rates. They do not want to refinance with current prices and high rates. Many will renovate.
In any case, the long-term market appears strong: Compound annual growth rates in the engineered wood industry are expected to average 6.8% through 2027.
Snowflake (NYSE:SNOW) is one of the more compelling Warren Buffett stocks to buy and hold over the coming decade.
The data cloud company is currently suffering from the ongoing downturn in all things tech. However, it’s easy to argue in the company’s favor due to its current fundamental performance. Data cloud forecasts make it obviously compelling in the long run.
So, here’s the thing about Snowflake. Yes, the company continuously loses money. But those losses look to have peaked. So, given Snowflake’s massive top-line growth, it’s a great time to buy at discounted prices.
Through the first 9 months of 2022 Snowflakes revenues increased by a massive 76%, reaching $1.476 billion. During the same period losses, though significant at $590.04 million, increased by a much smaller 7.7%. Thus, Snowflake may have already turned a corner with narrowing losses soon to come.
Data cloud will continue to grow at a rapid pace and Snowflake will reward those who stick with it through this current business cycle.
Mondelez (NASDAQ:MDLZ) stock represents a snack maker in the consumer packaged goods industry and is one of the best Warren Buffett stocks to buy and hold in that sector.
There are multiple metrics pointing to the notion that its shares simply provide strong, dependable returns no matter the overarching economy.
During the time that Berkshire Hathaway has invested in MDLZ shares, it has done so for an average purchase price of $29.58. Those same shares currently trade for $66 so Buffett’s firm has an average return exceeding 125% on its Mondelez purchases.
Mondelez shares fared very well throughout 2022 rising from $57.87 to $66.19. That’s a strong testament to its defensive utility in a historically poor year for stocks.
The stock includes a dividend which brings that return even higher. The bull thesis for Mondelez continues to hold true over the last decade as well. During that time frame, MDLZ stock provided annual returns of 12.18%. An investment of capital held over the last decade would have more than tripled in value.
UPS (NYSE:UPS) probably won’t jump up significantly in value in 2023. Experts believe the logistics giant will record around $100 billion of revenue this year. The company is likely to have recorded more than that during 2022 when results are released in a few weeks.
That said, UPS has done well and has exceeded earnings expectations over each of the past four quarters. The company recorded $24.2 billion in revenues in Q3. That was a 4.2% increase. Net income slid by $27 million to $2.584 billion. That isn’t great but operating profit did increase by 7.5% to $3.1 billion.
UPS shares will continue to be affected by recession fears throughout 2023. Parcel deliveries are a reasonable proxy for economic strength and the fact that UPS’ 2023 revenues are forecast to shrink in 2023 reflects that.
But UPS stock traded lower throughout 2022 and the shares are expected to trade nearer $200 in the next 12-18 months. The upside is clear and UPS is a dominant logistics firm with a strong future.
Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) stock will continue to be a strong investment in what will be a tumultuous 2023. Recession fears dominated 2022. Meanwhile, JNJ stock performed as it was expected to as a well-known defensive name. Shares appreciated by roughly 3%. Investors rewarded the company with their investment capital partially because of that reputation.
2023 is shaping up to be much the same: Recession fears dominate economic headlines and stock investors will favor JNJ this year for the same reasons they did last year: The company performs well despite difficult conditions. Its latest quarterly results indicate as much. Sales increased a modest 1.9% while EPS jumped up 22.6%.
JNJ stock is anticipated to increase to $192 by the end of 2023 and to $240 in 5 years. It’s an easy choice with its blue-chip reputation, defensive position, and Warren Buffett backing moving into 2023 and beyond.
As an insurance firm, Markel (NYSE:MKL) is one of Warren Buffett’s favorite sectors in which to invest. He likes insurance firms because they provide a predictable flow of premiums, or float.
That cash can be used to reinvest into revenue-generating assets that create a sort of virtuous cycle.
Further, Markel has shown that it performs well across broad periods of economic policy. During the past decade, most of which was marked by easy money and near-zero interest, the stock provided annual average returns of 10.34%.
Markel should find 2023 to be a very strong year as individuals and businesses seek to insure against any recession. The first nine months of 2022 were marked by similar fears and the company saw revenues increase 18.16% to $5.549 billion.
In short, MKL stock has proven that its business model remains strong in every economic cycle with 2023 looking particularly positive.
It’s difficult to tell where Apple (NASDAQ:AAPL) stock is headed in the near term. It reported record revenues in the September quarter but serious disruptions in China make this quarter less certain.
That said, an investor seeking to replicate Warren Buffett’s performance has to buy AAPL almost by necessity. Apple represents more than 41% of the value of Berkshire Hathaway’s overall investment. It has been an incredible investment throughout the tech boom that followed the ‘08-’09 recession.
Apple will continue to dominate headlines for the next 10 years as well. For those who don’t care to follow headlines and simply want to know where AAPL is headed, the news is positive: Pundits expect it to trade near $500 by 2029.
The company has immediate plans for its Mac computers and is rumored to be launching an augmented reality/virtual reality headset by mid-2023. It is almost certain to remain dominant for the foreseeable future making it a can’t-miss investment.
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.