The Best Berkshire Hathaway Stock to Invest $1,000 in Right Now

Core Viewpoint - American Express is considered a reliable long-term investment, particularly within Berkshire Hathaway's portfolio, which is closely monitored by investors due to Warren Buffett's endorsement [1][2][4]. Company Overview - American Express accounts for 15.9% of Berkshire Hathaway's portfolio, making it the second largest holding after Apple, with Berkshire owning 21.6% of the company [2]. - The company has not bought or sold shares since 2012, indicating a stable investment strategy [4]. Business Model - Unlike Visa and Mastercard, American Express operates as both a card issuer and a bank, which allows it to target lower-risk, higher-income consumers [5][6]. - This exclusivity limits growth but reduces credit risk and enhances its status as a premium brand [6]. Financial Performance - As of the end of 2024, only 0.8% of American Express' consumer and small business loans were delinquent by more than 30 days, a decrease from 1% at the end of 2023 [7]. - The company allocated only 8% of its total revenue to credit loss provisions in 2024, indicating strong financial health [7]. Economic Resilience - American Express is better insulated from inflation and interest rate fluctuations compared to its competitors, benefiting from higher net interest income during rising rates [8]. - The company has demonstrated stable growth rates, with revenue and diluted EPS growing at CAGRs of 7% and 10% from 2014 to 2024 [9]. Future Growth Prospects - Analysts project revenue and diluted EPS growth at CAGRs of 8% and 12% from 2024 to 2027, driven by increased spending among affluent customers and expansion of travel-related services [10]. Valuation - Despite a 290% stock price increase over the past decade, American Express is valued at 20 times next year's earnings, which is lower than Visa and Mastercard [11].