Key Points
Investing like Buffett involves buying a stock and holding on to it for many years.
American Express has been a Buffett favorite for decades, and the company just raised its sales and earnings outlook for the year.
Visa has an estimated 37% share of global payments processing, and revenue and earnings continue growing at a rapid pace.
Legendary investor Warren Buffett has built his empire on finding great companies that have significant competitive advantages over their rivals and holding on to their shares for many years. At a time when some investors are chasing companies that aren't profitable -- and in some cases don't even have sales -- it's more important than ever to seek out stocks that can go the distance in your portfolio.
To help you find a couple of stocks worth holding on to, it's worth considering two in Buffett's Berkshire Hathaway portfolio: American Express (NYSE: AXP) and Visa (NYSE: V). Here's why these two stocks deserve to be on your buy list right now.
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1. American Express is a longtime Buffett favorite
Buffett bought shares of American Express back in 1991 and still holds the stock in the Berkshire portfolio -- its second-largest position behind Apple.
While there have been some concerns about the economy slowing down lately, American Express certainly isn't feeling the pinch yet. It recently reported its Q2 results, in which revenue rose by 11% to $18.4 billion and earnings per share jumped 19% to $4.14.
That was good enough for management to raise the company's 2025 outlook for both sales and earnings, with it now expected to have revenue growth of about 9.5% and earnings per share of about $15.35.
Part of the reason for management's continued optimism came from the fact that card member spending accelerated by 9% in the quarter. Amid some economic doubts around tariffs and slowing job growth, this was a good sign that American Express cardholders aren't interested in cutting back spending just yet.
What's more, the company's recently updated U.S. Platinum Cards are already receiving strong interest from customers, with management saying, "The initial customer demand and engagement exceeded our expectations, with new U.S. Platinum account acquisitions doubling compared to pre-refresh levels."
With American Express continuing to fire on all cylinders and its members excited about the company's latest card offerings, it's no wonder that the stock has been a Buffett favorite for more than three decades.
2. Visa's continued growth
Berkshire first bought shares of Visa back in 2011 and the stock is now in the top 20 of the company's holdings. Visa's credit card processing business has continued to expand over the years and has an estimated 50% of U.S. credit card payments and around 37% worldwide.
The company's strength was easily seen when Visa reported its fiscal third-quarter results (for the period ended June 30) with revenue rising 14% to $10.2 billion and non-GAAP (not in accord with generally accepted accounting principles) earnings per share climbing 23% to $2.98. Part of the increase came as total payment volume -- the amount customers spend through Visa's processing system -- increased by 8%.
As with American Express, a strong economy is a boon for business, and, so far, there haven't been any signs of slowing for Visa cardholder spending. Management said in the third quarter that "consumer spending remains resilient, with continued strength in discretionary and non-discretionary growth in the U.S."
Visa will likely continue successfully tapping into the payments processing market for years to come, considering that this sector will be worth an estimated $290 trillion by 2030.
Remember this difficult Buffett investing strategy
The stock market has been booming during the past few years, which has made it relatively painless to invest in many stocks. But it's important to remember that one of the most important aspects of investing like Buffett is to take a buy-and-hold approach.
This is easy to do when stocks are soaring, but much more difficult when slower times come along. So, if you end up buying Visa or American Express, just remember that holding on to stocks for five years or longer is the best way to build wealth.
American Express is an advertising partner of Motley Fool Money. Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Visa. The Motley Fool has a disclosure policy.