Should You invest in Warren Buffett’s Top Stocks? – American Express Company (AXP), International Business Machines Corp. (IBM), Wells Fargo & Co. (WFC)

The Coca-Cola Company (NYSE:KO)

The Sage of Omaha’s accumulated gains in the company amount to $13.2 billion. Having disbursed a total of $1.3 billion, Coca-Cola gave him a 1,015% return. And Coca-Cola is still a buy if you hold a conservative portfolio. The company owns the strongest global distribution network and is growing fast in emerging markets while it is not losing sales in developed markets (the company has a great portfolio of beverage products). The company has a 28% EBITDA margin and sells for a 2013 18.3 P/E. Besides, it pays a 2.86% cash dividend yield that is growing at a 8.5% year-over-year rate. If you want sustainable cash flows, buy Coca-Cola.

Wells Fargo & Co. (NYSE:WFC)

This bank is the best retail bank in America. In the middle of a financial crisis is when you should asses the performance of bank managers. Wells Fargo & Co. (NYSE:WFC) not only resisted the housing crisis better than the rest of its peers, it is also coming out stronger than ever from that crisis. Wells Fargo & Co. (NYSE:WFC) sells for a 2013 P/E of 10 and a book value of 1.3. Paying a 2.74% cash dividend yield, the bank is a clear buy when the American economy is recovering faster than expected.

Bottom line

As we can see from the short analysis above, Buffett’s portfolio only has high quality companies paying growing cash dividends and with huge competitive advantages built around their businesses. Competitive advantages that range from offering high quality services (IBM) to global distribution networks (Coca-Cola), or just best in class management and culture (Wells Fargo & Co. (NYSE:WFC)) protect the businesses where Buffett invests. Having the wisdom to see when a company has a great competitive advantage is Berkshire’s own business motto. My recommendation is simple. If you have some money to invest, it might be best to follow the best. In this case, follow Buffett.

The article Should You invest in Warren Buffett’s Top Stocks? originally appeared on Fool.com and is written by Federico Zaldua.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.