2 Warren Buffett Wide-Moat Stocks to Buy Now
Written by Adria Cimino for The Motley Fool -> Both of these companies are leaders in their fields. One of these stocks is Buffett’s biggest holding; he added the other to his portfolio just last year. Investors study the moves of Warren Buffett for one good reason: The billio
One of these stocks is Buffett’s biggest holding; he added the other to his portfolio just last year.
Investors study the moves of Warren Buffett for one good reason: The billionaire has proven his investing strengths over 60 years. At the helm of Berkshire Hathaway , he delivered market-beating returns -- and stuck to his investing principles the whole time. Buffett led Berkshire Hathaway to a compounded annual gain over six decades of nearly 20%; that's compared to a compounded annual increase of about 10% for the S&P 500 .
Buffett turned over the chief executive officer role to Greg Abel at the start of this year, but even in retirement, he remains a precious ally of the nonprofessional investor. For two reasons. First, Buffett hasn't completely disappeared from the scene, so he may share his thoughts publicly from time to time. As chairman of Berkshire Hathaway, he remains involved in the holding company's decisions and processes. And second, investors still may follow Buffett's investing strategy, which emphasizes value investing, the selection of quality companies, and choosing players with solid competitive advantages, or moats.
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Now, speaking of moats, let's check out two of Buffett's wide-moat favorites to buy now.
Apple 's (NASDAQ: AAPL) competitive advantage is its brand strength. Even at a time when the company fell behind in the artificial intelligence (AI) race and rolled out AI features across devices more slowly than investors would have liked, users flocked to its products. Last year, Apple's smartphones took seven of the top 10 positions, including the No. 1 spot, in Counterpoint Research's rankings of global smartphone sales.
On top of this, Apple fans don't mind paying more for an iPhone or waiting for a new release -- they continue to stick with the brand they love.
Meanwhile, this user base, which tops 2.5 billion, has offered Apple a new revenue opportunity -- and one that's recurrent. This is services revenue, which has reached record levels quarter after quarter. The company offers its users a variety of services, from storage to digital entertainment. So, once you buy a new iPhone, your spending probably isn't over; instead, you may sign up for various services, and this creates ongoing revenue for Apple.
