Protected shares proceed to steer the market in what looks as if an unstable economic system. That is why most buyers must have a couple of powerhouse secure shares of their portfolios at any time. The Dow Jones Industrial Common (^DJI 0.97%) is an index of 30 blue-chip shares which might be safe, established leaders of their fields.

That makes for a wonderful place to start out when in search of nice shares to purchase. At the moment from that elite group, American Categorical (AXP 1.24%) and Coca-Cola (KO 0.17%) are two prime decisions — and so they additionally occur to be Warren Buffett’s longest-held shares.

1. American Categorical

After severe declines in the beginning of the pandemic that eclipsed comparable corporations’ gross sales decreases, American Categorical has been having a blowout yr. The identical components that made it inclined to issues earlier have now been redeeming options which might be bringing it again to life.

Second-quarter earnings launched final week had been excellent and demonstrated a sustained restoration. There was document income, document cardmember spending, and document acquisitions of U.S. shopper platinum, gold, and Delta co-branded playing cards. 

An vital factor of American Categorical’ progress engine is its shift in focus towards youthful clients. The corporate targets an prosperous buyer base, however as its core clients age out, it has closely invested to seize millennial and Gen Z clients. This has been an especially profitable initiative, and this group makes up 60% of all new cardholders in addition to 75% of recent U.S. gold and platinum cardholders. This group additionally has a large progress alternative, because it spends greater than different cohorts out of the gate. Within the second quarter, youthful cardmember spending elevated 48% over final yr, increased than all different age teams.

Journey and leisure is a good portion of American Categorical cardholder spending. That is what tanked it in the beginning of the pandemic, however as this reemerges, it’s benefiting the corporate significantly — and in April this class outpaced pre-pandemic ranges for the primary time. Administration would not see that letting up quickly, as future bookings with associate corporations like Delta are sturdy.

Inflation contributed to a number of the elevated spending, however it additionally weighed on the underside line. Gross sales of $13.Four billion elevated 31% over final yr and had been nicely forward of common analyst estimates of $12.5 billion, however earnings per share (EPS) got here in at $2.57, 8% decrease than final yr. They nonetheless beat the common analyst forecast of $2.42.

American Categorical has invested properly in its enterprise, and its buyer base provides it a robust cushion towards inflation. It has big progress alternatives, and it continued paying and elevating its dividend all through the pandemic. Shares commerce at solely 15 instances trailing 12-month earnings, and this prime inventory can defend your portfolio throughout difficult instances in addition to present alternatives for progress. 

2. Coca-Cola

Coca-Cola has additionally rebounded from pandemic declines and is climbing ahead with document gross sales and massive model energy. With its away-from-home phase again in enterprise, it is posting double-digit gross sales progress regardless of inflation and rising prices.

Within the second quarter, income elevated 12% yr over yr and natural income, or gross sales from present manufacturers, elevated 16%. EPS slid 28% to $0.44, however comparable EPS elevated 4% to $0.70.

For those who’ve purchased a can or a case of Coke lately, which thousands and thousands of consumers preserve doing, you most likely seen the rise in value. Coca-Cola has efficiently raised its costs since many shoppers are keen to pay up the slight improve versus splurging on costlier gadgets which have gone up in value.

That is the place Coca-Cola is a star firm. Greater than that, it is maintaining its eye on the ball. Administration expects that demand can change regardless of the inexpensive luxurious of a bottle of branded cola, and it is acutely observing information and punctiliously allocating assets to observe demand patterns and make applicable modifications accordingly.

That is not stopping Coca-Cola from aggressively rising its model. It has greater than 1,500 initiatives deliberate for 2022, and it is utilizing information to tell all the pieces from its newly launched digital marketing campaign to scaling up and turning into extra environment friendly.

It sees great alternative throughout its working segments. The corporate says it has 14% of the market share in developed markets (which account for 20% of worldwide inhabitants) and solely 6% of growing markets (which account for the remaining 80% of the world). Coca-Cola additionally says that its drink classes are rising at a compound annual charge of 4% to five%, offering it with natural progress chance inside its present market share.

The shares at present commerce at 27 instances trailing 12-month earnings, which is not low cost for a mature firm. However buyers are assured proper now as they flock to worth shares. Coca-Cola is a Dividend King with a legendary dividend that yields 2.9% on the present value, and this is a superb inventory decide to shore up your portfolio.