Below you can find a list of Warren Buffett’s 5 best long-term stocks to buy. For a more comprehensive list, please see 15 Best Long-Term Stocks to Buy Now.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the best long-term stocks to buy:
5. Moody’s Corporation (NYSE: MCO)
The credit rating company Moody’s Corporation (NYSE: MCO) is among the favorite stocks of the legendary investor. Berkshire first initiated a position in a rating firm in fiscal 2000 by buying shares worth $499 million. After twenty years, Buffett’s investment in Moody’s is valued above $7.1 billion, accounting for 3.12% of the portfolio.
Shares of the rating firm soared almost 1000% in the past ten years. Moreover, Berkshire has been pocketing massive cash gains in the form of dividends. Moody’s Corporation currently offers an annual dividend of $2.24 per share, with average dividend growth of over 12% in the last five years. Here is what we recently wrote about MCO’s dividends:
Moody’s has been consistently growing its dividend payments over the past decade, from just $0.105 in 2010 to $0.56 in 2020 and there is plenty of room for further growth, with the company generating strong cash flow and having a payout ratio of just 22.4%. Whether or not incoming CEO Robert Fauber, who takes over at the beginning of 2021, makes some noise by taking an even more aggressive stance on the company’s dividend payments, future dividend growth appears promising.