If you're looking for stocks to hold for a really long time, you might consider the advice of billionaire investor Warren Buffett. He believes in picking stocks of well-managed businesses that meet specific criteria. According to Buffett, these stocks should earn good returns on the money invested, have capable and honest managers, and be reasonably priced.

In a nutshell, Buffett suggests considering companies like Berkshire Hathaway (the company he runs), Apple, Johnson & Johnson, and Amazon. These companies fit his criteria and are part of Berkshire Hathaway's investment portfolio. Buffett's approach focuses on finding businesses that perform well, have trustworthy leadership, and are priced sensibly.

Remember, investing in stocks for the long term involves careful consideration, and these suggestions are based on Buffett's principles for selecting companies he believes are worth holding onto for a very long time.

1. Apple (AAPL)

Back in August 2018, Apple made history by becoming the first U.S. company with a market value of $1 trillion. As of September 30, 2021, Apple was the biggest holding in Berkshire Hathaway's portfolio, valued at $128.4 billion.

Apple dominated the U.S. smartphone market, holding a massive 47% share in the third quarter of 2021. Moreover, it led the tablet industry with a market share of 29.2% in the fourth quarter. Additionally, in February 2022, Apple paid a dividend of 22 cents per share to its shareholders.

2. Johnson & Johnson (JNJ)

Johnson & Johnson, a healthcare and pharmaceutical company based in New Jersey, is well-known as a "dividend aristocrat." This means that every year, from at least 1973 to 2021, Johnson & Johnson increased the amount of cash dividends it paid out to its investors.

In 2021, the company paid dividends of $4.19 per share, showing an increase from $3.98 per share in 2020. Over the ten years leading up to February 12, 2022, the stock's adjusted return, excluding reinvested cash dividends, was 159.61%. This indicates the growth in the stock's value over that period.

3. Dover (DOV)

Dover, a company based in Chicago, focuses on fluid management, industrial products, and manufacturing support systems – not typically casual dinner party topics. Similar to Johnson & Johnson, Dover is renowned for its consistent dividend payouts and has increased its annual cash dividend every year since at least 1972 through 2021.

In 2021, Dover paid out a total of $1.99 per share in quarterly dividends, showing an increase from $1.97 per share in 2020. This demonstrates the company's commitment to regularly raising the amount it pays to its shareholders as dividends.

4. Microsoft (MSFT)

In 2019, Microsoft joined the elite club as the third company ever to reach a market value of over $1 trillion. Bill Gates, one of its co-founders, is among the wealthiest individuals globally.

With Satya Nadella leading as the CEO, Microsoft shifted away from relying heavily on its Office software suite and Windows operating system for income. Instead, the company focused more on its cloud infrastructure and services business. In the second quarter of fiscal year 2022, Microsoft saw a 14% increase in revenue from Office Commercial products and cloud services compared to the previous year.

Since the fourth quarter of fiscal year 2004, Microsoft has consistently paid out a quarterly dividend to its investors. For fiscal year 2021, it paid a dividend of 56 cents per share. In the first two quarters of fiscal year 2022, the company announced dividends of 62 cents per share, reflecting its commitment to returning value to its shareholders.

5. McDonald’s (MCD)

McDonald's stands as the leading fast-food chain in the United States, with sales approximately double that of its closest competitor, Starbucks. In 2021, it held the title of the most valuable fast-food restaurant brand globally, boasting a brand worth of $154.9 billion.

For over four decades since 1977, McDonald's has consistently increased its total dividend payments to its shareholders. In 2021, the company's annual dividend reached $5.25 per share, showing growth from $5.04 per share in 2020.

Over the span of ten years until February 11, 2022, the stock demonstrated a total return of 158.24% without factoring in reinvested dividends. When considering reinvested dividends, the total return surged to 220.95%. This highlights the stock's growth and the benefit of reinvesting dividends for investors during that period.

6. Amazon.com (AMZN)

Amazon ranks as the world's second-largest retailer in terms of revenue, trailing only Walmart. In 2021, the company amassed a total revenue of $469.82 billion. Similar to Microsoft, Amazon is increasingly relying on its cloud computing division to fuel its revenue and profit growth.

Between 2016 and 2020, the average annual return for Amazon's stock stood at 38.93%. Amazon achieved the milestone of reaching a $1 trillion market value, becoming the second company to do so. This highlights the substantial growth and success the company experienced within that timeframe.

7. Alphabet (GOOGL, GOOG)

Alphabet, mainly through Google and YouTube, dominates the search engine and online video realms. By the end of 2021, it held a whopping $139.6 billion in cash and securities. On January 16, 2020, Alphabet became just the fourth company ever to surpass a $1 trillion market cap.

In 2014, there was a stock split to ensure founders Sergey Brin and Larry Page maintained control over Alphabet. This split resulted in two types of publicly traded shares: Class A shares (GOOGL) come with one vote per shareholder, while Class C shares (GOOG) don't grant any voting rights. There are also privately held Class B shares, held by the company's founders and executives, providing 10 votes per share.

8. Berkshire Hathaway (BRK.A, BRK.B)

Berkshire Hathaway's Class A stock (BRK.A) was priced at a staggering $479,730 on Feb. 11, 2022, making it too costly for most Americans to afford even one share without working for several years. However, the Class B shares were much more affordable, trading at $319.14 on the same date.

Investing in Berkshire means betting on Warren Buffett, who transformed his investments in textile mills during the 1960s into becoming the world's fifth-richest person, with a net worth of $115.4 billion as of Feb. 13, 2022, according to Forbes. It also means owning a piece of various well-known and lesser-known companies, such as GEICO, International Dairy Queen, Duracell, Kraft Heinz, Benjamin Moore, and Acme Brick Company.

Though Buffett bought Berkshire shares just about six decades ago, which is relatively short in the investment world, investing $1,000 with him in 1965 would have grown to be worth $18 million in 2022.

Frequently Asked Questions (FAQs)