The Best Warren Buffett Stock to Buy Now: Coca-Cola vs. American Express

Susan Dziubinski: I’m Susan Dziubinski with Morningstar. Berkshire Hathaway BRK.A BRK.B will be releasing its new 13F in a couple of weeks. The 13F will include which stocks CEO Warren Buffett and his colleagues have been buying and selling.

While we wait for the report to drop, we’re taking a look at two of Buffett’s favorite companies in Berkshire’s publicly traded portfolio: Coca-Cola KO and American Express AXP. Buffett has suggested in the past that these companies are both “forever stocks,” meaning that he expects Berkshire to own these stocks indefinitely.

What makes Coke and American Express so special? Buffett likes that these companies are hugely successful in their base businesses. He also thinks their products and services travel, which means they’ve become worldwide brands and essentials of the world we live in.

So, which of these two Buffett favorites is the best stock to buy today, according to Morningstar?

The Best Warren Buffett Stock to Buy Now: Coca-Cola vs. American Express

1. Coca-Cola KO
2. American Express AXP

Let’s start with a look at Coke. Morningstar thinks Coke has carved out a wide economic moat based on strong intangible assets and significant cost advantages. The balance sheet is solid, and the company is well-equipped to weather macroeconomic volatility. We think Coke’s cash flows are reliable and therefore assign the company a Low Uncertainty Rating. Coke delivered volume growth in the third quarter despite facing macro headwinds. We expect to raise our fair value estimate by a few percentage points after earnings. As of this taping, we think Coke stock is worth $72 per share.

Read Morningstar’s full report on Coca-Cola.

On to American Express. Morningstar thinks it, too, has carved out a wide economic moat with its unique closed-loop network whereby it issues the credit card to the consumer, operates the payment network, and establishes a direct relationship with the merchant. The company maintains a well-positioned balance sheet and a credit card portfolio that’s historically had lower credit risk than its peers. American Express reported strong third-quarter results, thanks to higher transaction volume and net interest income. We think the stock is worth $265 per share.

Read Morningstar’s full report on American Express.

We think Coke and American Express are both outstanding businesses, but when it comes to which stock is a better buy today, the answer is Coke. American Express stock trades at a significant premium to our fair value estimate, while Coke’s current price is more in line with what we think it’s worth.

For more stock ideas, be sure to tune into The Morning Filter each week, wherever you get your podcasts. And visit Morningstar.com, too.

Morningstar analysts Michael Miller and Dan Su provided the research behind this segment.

Watch 3 Surprising Stocks to Buy During Q4 2025 for more from Susan Dziubinski.