Earlier this week, Berkshire Hathaway Inc. filed its latest Form 13F, which revealed the stocks that one of the world’s greatest investors – Warren Buffett – bought and sold during the last quarter of 2021.

As of Dec 31, 2021, Buffett's investment portfolio was worth approximately $330 billion, holding 44 securities.

Warren Buffett says, “Diversification Preserves Wealth but Concentration Build Wealth.” Hence, following this principle, he has concentrated more than 75% of his investments in just four companies – Apple Inc. (AAPL Quick QuoteAAPL - Free Report) , Bank of America Corp. (BAC Quick QuoteBAC - Free Report) , American Express Company (AXP Quick QuoteAXP - Free Report) and The Coca-Cola Company (KO Quick QuoteKO - Free Report) .

Before discussing in detail the above-mentioned companies, let’s check how these stocks fared last year in terms of share price movement.

Performance in 2021

Image Source: Zacks Investment Research

Apple (47.6% of total portfolio value)

The tech giant is Buffett’s largest investment. As of December 2021-end, Berkshire Hathaway held more than 887 million shares of Apple. This accounted for 5.4% ownership in the company.

This clearly shows that Buffett is bullish on Apple’s long-term prospects. Apple’s business mainly runs around its flagship iPhone. Yet, Services and Wearables businesses are now becoming the cash cow and are expected to drive top-line growth in the future.

The growing adoption of contactless payment primarily due to the coronavirus pandemic bodes well for Apple Pay, designed on the basis of contactless payment technology. The company’s focus on fast emerging lucrative business opportunities, including autonomous vehicles and augmented reality/virtual reality (AR/VR) technologies, presents growth prospects in the long haul. With its new offerings, Apple will also be able to leverage the Internet of Things (IoT) market, which is expected to grow exponentially.

Further, Apple pays 88 cents per share as an annual dividend at present and has a share buyback program in place. Therefore, on the basis of the number of shares Buffett holds of the company, the total dividend income being earned is almost $780 million annually.

The stock currently sports a Zacks Rank of 1 (Strong Buy), and the Zacks Consensus Estimate for current-year earnings has been revised 5.7% upward over the past month. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bank of America (13.6% of total portfolio value)

Buffett’s love for banks is well known. This gets reflected in his huge investment in Bank of America, one of the largest banks in the United States. Through Berkshire Hathaway, Buffett held more than 1 billion shares in the company (accounting for 12.3% ownership) as of Dec 31, 2021.

With multiple interest rate hikes on the horizon, Bank of America is well placed to gain from the same as it is highly asset sensitive. Also, its efforts to digitize banking operations, along with the success of Zelle and Erica, have started bearing fruits.

The bank has witnessed a huge surge in digitally active users, resulting in branch consolidation and lower operating expenses. Over the last several quarters, this Zacks Rank #3 (Hold) company has incurred on an average $14 billion in expenses, despite undertaking strategic growth initiatives. Though total non-interest expenses rose in 2021, management expects the same to be relatively stable for 2022.

In July 2021, following the Federal Reserve’s approval, Bank of America announced a dividend hike of 17% to 21 cents per share. In October, the company's share repurchase plan of $25 billion was also renewed. With more than 1 billion shares, Buffett is earning more than $850 million as dividend income from the company.

Further, analysts are bullish on the stock. Over the past 30 days, the Zacks Consensus Estimate for earnings has been revised 3.2% upward for 2022.

American Express (7.5% of total portfolio value)

Being part of Buffett’s portfolio since 1993, American Express offers charge and credit payment card products and travel-related services globally. As of Dec 31, 2021, Buffett had more than 151 million shares of the company, representing 19.6% stake.

Several growth initiatives, such as launching products, enhancing the existing features, modifying prices, reaching agreements and forging alliances, among others, are expected to support American Express’ revenues. With its new growth plan in place, this Zacks Rank #3 company is likely to benefit immensely from the improving macro environment. It made a strategic move in small business banking by acquiring Kabbage, an online lender.

Rising credit card spending and turnaround in small businesses will buoy its future performance. In fact, American Express expects 2022 revenues to grow 18-20% year over year. In the long term, AXP expects to achieve revenue growth of more than 10%.

Backed by solid cash-generating abilities, the company has undertaken shareholder value-boosting measures. Currently, AXP is paying an annual dividend of $1.72 per share. Thus, Buffett is earning more than $260 million as dividend income from his investments.

Also, American Express is likely to raise its quarterly dividend for the first time since 2019. It plans to hike dividends by 20% to 52 cents per share, starting from the first quarter of 2022.  Thus, the dividend amount is likely to head higher for Buffett.

Over the past 30 days, the Zacks Consensus Estimate for earnings has been revised marginally upward for 2022.

Coca-Cola (7.2% of total portfolio value)

Being one of the oldest investments of Buffett (part of portfolio since 1988), Coca-Cola’s strong brand equity, marketing, research and innovation have helped it garner a market share of more than 40% in the non-alcoholic beverage industry. As of Dec 31, 2021, Buffett had 400 million shares of the company, representing 9.3% ownership.

Coca-Cola has coped with the industry-wide flattening of soda sales over the years by going on a buying spree and making investments in healthier alternatives. Thus, it is a total beverage company with something for everyone to drink and has a global presence.

Further, driven by a shift in consumer behavior due to the pandemic, Coca-Cola is witnessing a splurge in e-commerce, with the growth rate of the channel doubling in many countries. Its focus on accelerating expansion in the digital channel is likely to be sustainable, positioning it for long-term growth.

Coca-Cola remains committed toward rewarding shareholders with dividends and share repurchases. It pays $1.68 per share as dividend annually. For Buffett, this leads to a dividend income of $672 million.

Coca-Cola, at present, carries a Zacks Rank of 2 (Buy). Further, analysts are bullish on the stock. Over the past month, the Zacks Consensus Estimate for earnings has been revised 2.1% upward for 2022.