12 Best Long-Term Stocks to Buy According To Warren Buffett

5. The Kraft Heinz Company (NASDAQ:KHC)

Warren Buffett’s First Major Purchase: 2015

Berkshire Hathaway’s Latest Investment Stake: $10.49 Billion

Number of Hedge Funds Holding Stakes as of Q2: 43

The Kraft Heinz Company (NASDAQ:KHC) is another consumer defensive investment play in Buffett’s portfolio for generating value regardless of the prevailing economic condition. The company manufactures and markets food and beverage products. Its product line includes sauces, cheese and dairy products, meals, meats, and refreshment beverages.

Under the current leadership, The Kraft Heinz Company (NASDAQ:KHC) has sold off its underperforming brands to generate funds, bought brands with higher potential for growth, and rejuvenated its traditional brands by introducing new items and advertising efforts.

These approaches positioned it favorably for expansion in 2020 and 2021, as the COVID-19 pandemic increased consumer demand for packaged goods. It mitigated the challenges posed by rising inflation in 2022 and 2023 by incrementally increasing its prices.

Reducing operating costs enabled The Kraft Heinz Company (NASDAQ:KHC) to enhance its gross profit margin by 190 basis points during the first six months of 2024 compared to the same period last year. While the quarterly outcomes were varied, the company’s leadership focused on critical areas, resulting in a surge in the stock price following the release of the second-quarter earnings.

Consequently, it expects its adjusted gross margin to expand 75 to 125 basis points and for its adjusted operating margin to rise by one to three percentage points. It also predicts its adjusted EPS to grow 1% to 3% to $3.01 to $3.07 per share.

The expected growth should allow the company to generate more shareholder value, therefore cementing its position as one of the best long-term stocks to buy, according to Warren Buffett. At $35 a share, The Kraft Heinz Company (NASDAQ:KHC) Stock trades at just 11 times its forward earnings, the midpoint of this year’s earnings estimate. The low valuation is further complimented by a high forward dividend yield of 4.55%.

As of June 2024 end, 43 out of the 912 hedge funds covered by Insider Monkey’s research had invested in The Kraft Heinz Company (NASDAQ:KHC). Warren Buffett’s Berkshire Hathaway owned the most significant stake, which was worth $10.49 billion.