2 no-hassle Warren Buffett stocks to buy right now

Berkshire Hathaway (BRK.A 0.94%) (BRK.B 0.97%) CEO Warren Buffett knows how to create piles of money. The stock is up 4,400,000% since 1965 when Buffett took the reins. Many of these gains were the result of Buffett’s knack for identifying long-term winners, either through the stock market or by buying companies.

At the end of the second quarter, Berkshire’s stock portfolio totaled $285 billion. Let’s look at two holdings that offer attractive growth potential over the next five years.

1. Amazon

Amazon (AMZN 0.52%) is a disruptive force in the retail sector. It has more than 200 million Prime members, 627 million square feet of processing space and data centers, and growing revenue streams from profitable businesses such as advertising solutions and cloud services.

All these assets translate into enormous financial advantages. The company generated a net profit of $44 billion on revenues of $604 billion in the past year. It sees profits explode, net income doubles year-over-year in the second quarter, and investors see more profitable growth ahead.

Amazon is focused on making its online retail store more efficient in processing orders and getting these items to customers much faster. Delivered over 7 billion items to customers in 2023 in one day.

When customers can receive their items same day or next day, they tend to shop Amazon for anything. That bodes well for its prospects in a growing e-commerce market estimated at $6 trillion this year that is expected to reach $8 trillion by 2027, according to Emarketer. Amazon’s massive resources put it in pole position to win the race.

Once Amazon starts turning a profit from its international business, it could deliver a substantial boost to earnings that would lift the stock. Throw in double-digit growth prospects for its industry-leading cloud computing service Amazon Web Services, which accounts for the bulk of the company’s operating profit, and Wall Street expects the company’s earnings to rise 23% on a annual basis in subsequent years.

Assuming the stock continues to trade near its current price-to-earnings (P/E) multiple of 37, the stock price should provide investors with double-digit annualized returns over the next five years.

2. American Express

Berkshire Hathaway was a shareholder of American Express (AXP 1.43%) for over 30 years. Buffett has a long history with the brand, making a stock bust in the 1960s when he was operating his investment partnership, and the credit card brand continues to show the hallmarks of a great long-term investment.

American Express is known for its rewards program and other perks it offers through its premium Gold and Platinum cards. It’s a card brand that tends to attract big spenders, and merchants know it, which is why businesses are willing to pay extra to accept Amex at checkout.

Despite recent economic headwinds, American Express cardholders continue to spend. Net interest income rose 8% year-on-year in Q2 with double-digit growth in card fee income.

A telling sign of the brand’s competitive position is the momentum in attracting millennials and Gen Z customers. This demographic accounted for more than 60% of new consumer account acquisitions in 2023. It should benefit American Express in the long run, as Gen Z card members tend to spend about 25% more than older customers.

The company has seen significant growth in recent years. Management feels so positive about business trends that they believe they can increase marketing spend without affecting revenue growth. The consensus analyst estimate expects adjusted earnings to rise 17% this year from 2023.

Over the next few years, Wall Street analysts expect earnings to grow by about 15% a year. Assuming the stock continues to trade at its current forward P/E ratio of 19 and there are no major hiccups in the economy, the stock could double in value over the next five years.