Many consider Warren Buffett one of the greatest (if not the greatest) investors ever. Nicknamed the Oracle of Omaha, Buffett has built a decades-long track record of investing performance, most notably through his holding company, Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B).
You shouldn't ever mindlessly buy or sell stocks without doing your research, but I'll admit that it's hard not to glance at Berkshire's portfolio, even if only for inspiration. I recently studied Berkshire's holdings and noticed three financial stocks that would benefit any long-term portfolio.
Take a closer look at these three buy-and-hold candidates. You can own all three for under $800.
1. Berkshire Hathaway
Yes, you can directly invest with Warren Buffett by owning shares of Berkshire Hathaway. Berkshire's $300 billion portfolio of publicly traded companies has gotten much attention, but investors should also consider buying the stock for its private assets. Berkshire is a massive conglomerate that operates dozens of privately held businesses it has acquired over the years.
Berkshire owns consumer-facing brands like Dairy Queen, Fruit of the Loom, and Duracell, as well as railroads, oil and gas pipelines, and insurance giant GEICO.
The company famously doesn't pay a dividend; the profits from its many businesses flow to the company's balance sheet, which allows Buffett and his team to be opportunistic when a good deal arises. This formula has helped Berkshire Hathaway outperform the S&P 500 over the years, and the company currently has over $276 billion in cash ready to deploy.
Buffett's age raises questions about the future, but Berkshire enjoys a decades-long culture that doesn't seem easily lost overnight. Buffett's hand-picked successor has been connected to Berkshire for over 25 years.
2. American Express
Bank and premium credit card company American Express(NYSE: AXP) is one of Buffett's best investments. Buffett first bought shares in the 1960s but sold them before buying again in the 1990s and has held them since.
Berkshire owns 21% of American Express today, making it the company's second-largest stock holding, accounting for over 12% of Berkshire's investment portfolio. American Express is a beloved brand that is popular with consumers and businesses that borrow money using credit cards.
The company has been around since 1850, evolving and surviving economic catastrophes like the Great Depression and the financial crisis in 2008 and 2009. Debt is the heartbeat of modern consumer culture, especially in America. Household credit card debt is currently at all-time highs, and analysts expect American Express to grow earnings by 15% annually over time.
Buffett himself has referred to American Express as an indefinite holding in Berkshire's portfolio, the ultimate stamp of approval.
3. Visa
Payment network Visa(NYSE: V) is the top name connecting the banks that hold your money to the merchants where you spend it. It earns a fee on every transaction using a Visa-branded credit or debit card. The world has gradually moved away from cash as a payment method, fueling years of rampant growth and market-beating investment returns.
Buffett added Visa to Berkshire's portfolio in 2011, a few years after Visa's initial public offering (IPO). It's been an excellent investment; Visa stock has returned over 1,700% since then.
Visa is a highly profitable business that converts more than half its revenue into free cash flow. The company uses that cash to repurchase shares and pay dividends, which Buffett famously looks for in his investments. Visa isn't a large holding for Berkshire, just 0.8% of its portfolio. Visa's market-beating track record means the stock is rarely as cheap as Buffett prefers.
Due to its massive size, Visa's best growth years could be over, but analysts still believe the business will grow earnings by over 12% annually over the long term. That's plenty to continue making Visa a high-performing stock that investors can own and be able to sleep well at night.
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American Express is an advertising partner of The Ascent, a Motley Fool company. Justin Pope has positions in Visa. The Motley Fool has positions in and recommends Berkshire Hathaway and Visa. The Motley Fool has a disclosure policy.
