American Express (AXP)

American Express demonstrated its pricing power last year as it raised the annual fee on its Platinum Card from $550 all the way to $695.

The company also stands to directly benefit in an inflationary environment.

American Express makes most of its money through discount fees — merchants are charged a percentage of every Amex card transaction. As the price of goods and services increases, the company gets to take a cut of larger bills.

In fact, business is already booming, as the company’s revenue jumped 30% year over year to $12.1 billion in Q4.

American Express is the third-largest holding at Berkshire Hathaway, only behind Apple and Bank of America. Owning 151.6 million shares of AXP, Berkshire’s stake is worth over $26 billion.

Berkshire also owns shares of American Express competitors Visa and Mastercard, although the positions are much smaller.

Yes, American Express trades at over $170 per share. But you can get a smaller piece of the company using investing apps that allow you to buy fractions of shares with as much money as you are willing to spend.

American Express shares currently offer a dividend yield of 1.2%.

Farmland is one of the top asset classes capable of insulating your money from volatile market conditions. Learn how you can use FarmTogether to safeguard your portfolio.

Diversify now

Coca-Cola (KO)

Coca-Cola is a classic example of a so-called “recession-resistant” business. Whether the economy is booming or struggling, a simple can of Coke is still affordable to most people.

The company’s entrenched market position also gives it some pricing power. Besides, Coca-Cola can always rely on a trick it’s used in the past: keeping its prices the same but subtly reducing its bottle size.

Factor in the strengths from its iconic brand portfolio and the fact that its products are sold in more than 200 countries and territories, and it’s clear that the business model can thrive through thick and thin.

After all, the company went public more than 100 years ago. It has survived — and thrived — in many periods of high inflation.

Buffett has held Coca-Cola in his portfolio since the late ’80s. Today, Berkshire owns 400 million shares of the company, worth approximately $23.8 billion.

At current prices, you can lock in a dividend yield of 3% on Coca-Cola's shares.

Apple (AAPL)

No one who spends $1,600 for a fully decked-out iPhone 13 Pro Max would call it a steal, but consumers love splurging on Apple products anyway.

Earlier last year, management revealed that the company’s active installed base of hardware has surpassed 1.65 billion devices, including over 1 billion iPhones.

While competitors offer cheaper devices, many consumers don’t want to live outside the Apple ecosystem. That means, as inflation spikes, Apple can pass higher costs to its global consumer base without worrying as much about a drop in sales volume.

Today, Apple is Buffett’s largest publicly traded holding, representing more than 40% of Berkshire’s portfolio by market value.

One of the reasons behind that concentration is the sheer increase in the tech giant’s stock price. Over the past five years, Apple shares have surged more than 300%.

Apple currently offers a dividend yield of 0.6%.

Diversify your investments with farmland

You don’t have to own a farm to profit off farmland.

Farmland has proven to be one of the most stable assets of the past few decades — and with FarmTogether, you’re able to invest today. FarmTogether's platform gives accredited investors access to this exciting market, and one of the highest-yielding asset classes on a risk-return basis.

Sign up for FarmTogether to start investing in farmland.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

What to Read Next

Disclaimer

The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.