2 Warren Buffett Stocks to Buy and Hold for the Next 20 Years

"If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes." This timeless advice from Warren Buffett is a prime example of the core philosophy of long-term investing. Successful wealth accumulation isn't about chasing volatile trends or timing market cycles.

Instead, an effective long-term investing strategy should revolve around identifying exceptional businesses with durable competitive advantages and holding them long enough for compounding to work its magic.

When you invest with a two-decade horizon, your greatest asset is time. Here are two stocks to consider putting cash into the next time you go shopping for stocks.

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1. Coca-Cola

Coca-Cola (NYSE: KO) is arguably the quintessential Buffett investment, given its robust economic moat, pricing power, and a legendary 64-year streak of dividend increases that guarantees reliable cash flow through any economic cycle. Its yield hovers around 2.6%. The consumer stock benefits from global brand recognition and an irreplaceable distribution network. Because its beverages are consumed daily across more than 200 countries, the business remains more insulated from regional recessions and localized economic downturns than companies in other industries.

Coca-Cola's business model is unique because it operates primarily as a high-margin concentrate company, selling syrups and bases to an independent network of local bottling partners who handle the capital-heavy manufacturing, packaging, and distribution. This clever structure allows the company to scale globally with minimal capital expense while maintaining control over its brand equity, marketing, and pricing power.

Berkshire Hathaway has held this position since 1988, through decades of Buffett's stewardship to the present iteration under Greg Abel. The company's accumulated 400 million shares of Coca-Cola that now represent a core pillar of its portfolio. When inflation drives up the cost of components like sugar, aluminum, and packaging, Coca-Cola tends to pass these higher expenses on to consumers without sacrificing sales volume. A person might delay purchasing a new car or a smartphone during tough economic times, but they rarely give up their favorite affordable beverage.

Coca-Cola is a certified Dividend King with an incredible streak of more than six decades of dividend increases. Berkshire Hathaway receives hundreds of millions of dollars in passive income from Coke annually, illustrating the immense power of yield on cost. For individual investors, reinvesting these steadily growing payouts over a 20-year horizon can steadily accelerate your total portfolio gains.

2. American Express

American Express (NYSE: AXP) is another long-held masterpiece in the Berkshire portfolio, reflecting Buffett's love for high-quality financial networks. Rather than operating as a traditional bank, Amex controls a unique, closed-loop payment ecosystem that sets it apart from competitors. The business explicitly targets affluent, high-spending consumers who pay annual card fees for premium perks.

This customer base makes Amex incredibly resilient during inflationary periods and economic downturns, as its cardholders maintain high spending power and present very low default risks. Amex acts as both the credit card issuer and the payment network processor. This means it collects fees from the merchant every time a card is swiped, while simultaneously earning interest, annual fees, and late fees from the cardholder.

This massive influx of proprietary data allows Amex to target its marketing with pinpoint accuracy, keeping customer acquisition costs low and customer retention rates exceptionally high. This premium network model continues to unlock financial success, as evidenced by American Express delivering a record-breaking $72 billion in full-year revenue, up 10% from 2024, paired with a 15% surge in adjusted earnings per share to $15.38.

As inflation drives up the nominal cost of goods and services globally, the percentage-based fees collected by Amex automatically rise. This built-in inflation hedge helps ensure that the company can continue to expand its profit margins and grow its intrinsic value over the next two decades. The company has a steady track record of increasing its dividend (most recently by 16%) and yields approximately 1% at the time of this writing.

American Express is an advertising partner of Motley Fool Money. Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Express and Berkshire Hathaway. The Motley Fool has a disclosure policy.