Warren Buffett is one of the most successful and well-known investors in the world. He is widely recognized for his long-term success in picking winning stocks.

Investing in “Warren Buffett stocks” can be a way to benefit from a disciplined, long-term strategy centered on quality and value. While no investment is without risk, Buffett's approach emphasizes stability and reliability over speculation, making his stocks appealing to many investors seeking steady growth.

Apple (AAPL) and American Express (AXP) account for the majority of the equity portfolio at Warren Buffett's holding company, Berkshire Hathaway (BRK.B). Apple accounts for 23.4% of Buffett's equity holdings, while American Express makes up 14.4%. Let's look at why both of these Buffett stocks are currently good buys.

#1. American Express Company

Founded in 1850, American Express Company (AXP), also known as AmEx, has grown to become one of the most well-known fintech companies in the world. It is widely regarded as a premium brand, distinguished by its card offerings, which include the iconic Green, Gold, and Platinum cards, as well as its customer-centric services, travel perks, other financial products, and strong security measures.

The company has demonstrated strong financial resilience over the years, even during challenging economic cycles. Its ability to adapt to market headwinds is reflected in its stock price, which has risen 195% in the last decade.

AXP stock has surged 44.2% year-to-date, compared to the S&P 500 Index’s ($SPX) gain of 19.8%.

American Express has made significant investments in digital tools to meet evolving customer expectations and keep up with the fintech revolution. It has innovated 80 of its products globally. 

Despite challenging macroeconomic conditions and geopolitical tensions, the company reported yet another strong quarter in Q3. Total revenue (net of interest expense) rose 8% year on year to $16.6 billion. Diluted earnings per share (EPS) increased 6% to $3.49. 

Management attributed this performance to "stable growth in billings, strong new card acquisitions, and excellent credit performance." The company added 3.3 million new card acquisitions during the quarter.

AmEx ended the quarter with $47.9 billion in cash and cash equivalents. Despite the hefty cash balance, AmEx’s debt-to-equity ratio is quite high at 1.8. However, the interest coverage ratio of 6.3 indicates that the company can currently cover the debt interest payments.

AXP's dividend yield of 1.03% is lower than the financial sector average of 3.1%. However, the forward payout ratio of 18.5% remains conservative, ensuring sustainable distributions and potential dividend growth.

Management expects 2024 earnings to increase by around 24%, on average. Analysts that cover AmEx expect its earnings to increase by 20.7% in 2024, followed by another 11.7% in 2025. Trading at 18 times forward 2025 earnings, AXP seems like a reasonable fintech stock with a solid brand value. This blue-chip financial company may appeal to long-term investors seeking a mix of income and growth potential.

Overall, on Wall Street, AXP stock is a “moderate buy.” Out of the 28 analysts covering the stock, nine rate it as a "strong buy," two as a "moderate buy," 14 suggest it a "hold," and three rate it a “strong sell.” AXP stock is trading close to its average target price of $273.72, while its high price estimate of $325 suggests that the stock could rise by up to 19.1% over the next year.

#2. Apple

Apple (AAPL) has long been a favorite among investors. The tech giant has been celebrated for its robust financials, innovative product lineup, and global brand power. AAPL stock has returned close to 650% in the last decade. 

Apple's products, including the iPhone, iPad, Mac, Apple Watch, and AirPods, are well-known worldwide. With a loyal customer base and an ecosystem that seamlessly connects its devices and services, Apple has distinguished itself in the highly competitive technology industry. AAPL stock has gained 15.3% YTD, trailing the tech-heavy Nasdaq Composite's ($NASX) gain of 21.1%. 

In the most recent fourth quarter of fiscal 2024, total revenue increased by 6% to $94.9 billion, while diluted earnings per share increased by 12% to $0.97, owing to the sale of existing products and the introduction of new products during the quarter. iPhone sales increased by 5.5% in the quarter, reaching $46.2 billion. 

Apple unveiled the iPhone 16 lineup, Apple Watch Series 10, and AirPods 4 in Q4. The A18 Pro chip that powers the iPhone 16 lineup includes Apple Intelligence.

While revenue growth in the quarter appeared sluggish, many analysts believe Apple Intelligence-powered new iPhones will be a game changer for the company.

Citi analyst Atif Malik expects Apple to sell 228 million iPhones in 2024 and 241 million in 2025. Similarly, Wedbush analyst Dan Ives predicts that the new iPhones will generate 240 million unit sales for Apple by 2025, pushing the company’s market capitalization to $4 trillion by 2025. Apple is currently valued at a market cap of $3.38 trillion. 

Overall, Wall Street expects Apple’s revenue and earnings to increase by 5.9% and 9.3% in fiscal 2025. Revenue and earnings are expected to increase by 8% and 11.8% in fiscal 2026, respectively. 

AAPL stock is expensive, trading at 30 times forward earnings for 2025. However, given the brand value and long-term potential, AAPL stock commands a premium price. Its strong financials, robust ecosystem, and commitment to innovation bolster its position as a market leader.

“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price,” as Warren Buffett once said. And Apple is unquestionably a standout blue chip stock.

Overall, on Wall Street, AAPL stock is a “moderate buy.” Out of the 32 analysts covering the stock, 18 rate it as a "strong buy," four as a "moderate buy," eight suggest it a "hold," and two rate it a “strong sell.” The average target price of $241.64 is approximately 8.4% higher than current levels. Its high price estimate of $300 suggests that the stock could rise by up to 34.6% over the next year.