Famed investor Warren Buffett has a long history of outperforming the stock market. Since taking the helm as CEO of Berkshire Hathaway (BRK.A -0.21%) (BRK.B 0.03%) In 1965, Buffett was earning investors nearly 20% annually, enough to turn a $100 investment into $4.4 million today.

Buffett’s long-term success is attributable to several factors, one of which is that Berkshire invests in high-quality companies with robust economic moats and great cash flows. Here are three Buffett stocks you can buy with confidence and hold for the next decade.

Image source: The Motley Fool.

1. Fatty

Insurance companies’ cash flows make them attractive investments, which is why Buffett has been investing in them for decades. Insurance companies can be attractive investments because their products are always in demand and premiums can rise with economic growth and inflation, making them excellent cash-flow machines.

However, not just any insurer is suitable. As one of the world’s largest property and casualty insurers, Fatty (CB 0.39%) has demonstrated excellent risk management compared to its peers. Chubb is a prudent insurance company and has done an excellent job of balancing claims costs and expenses with premiums collected, consistently beating its industry peers.

Last year, Chubb generated $15.1 billion in free cash flow, which it can use to pay dividends, buy back shares or invest in bonds and stocks. Its excellent cash flow and strong competitive position are the reason it has increased its dividend for 31 years in a row.

Chubb has built its knowledge through decades of underwriting and understanding risk and reward, making it difficult for new entrants to gain market share. The company is positioned to grow with the economy. It can also provide a hedge against the potential for higher inflation and interest rates, making it an excellent stock to hold for the next decade and beyond.

2. American Express

When CEO Stephen Squeri took the top job at American Express (AXP 1.85%) In 2018, Warren Buffett told him that the company’s brand is “the most important thing about American Express.” What sets American Express apart is its attractive offers that attract high-budget consumers and its customers’ long-term loyalty to the brand.

The famous American Express Black Card reportedly requires as much as $500,000 in annual spending to earn an invitation. The Platinum Card, with an annual fee of $695, appeals to high-spending customers and offers benefits from high-end travel providers, luxury hotels, airlines and clothing lines.

American Express is a high-end brand that charges higher processing fees than similar brands. While some retailers won’t accept the card, it’s worth it for American Express users who enjoy valuable rewards.

The company also holds on to credit card loans, earning interest income, and has benefited from rising interest rates. Last year, net interest income rose 33% and in the first half of this year it was up another 20%. While holding on to these loans exposes it to credit risk, American Express’s high-end customers should continue to spend more than others amid inflation or an economic slowdown.

3. Moody’s

Moody’s Company (MCO 1.12%) operates a credit rating business and has a robust economic moat. This is because it is difficult to enter the credit rating industry due to high barriers to entry, as it takes time to build a reputation as a reliable source for assessing the creditworthiness of companies and debt instruments.

Regulation also makes it difficult for new entrants to challenge long-established names. Moody’s is the second-largest credit rating company in the U.S., with a 32% market share. Only S&P Worldwideis larger with a market share of 50%.

Moody’s has struggled in recent years due to low debt issuance volumes, but its robust analytics business has helped boost profits during the downturn in the ratings business.

The good news for investors is that issuance volumes have been growing strongly. In the first six months of this year, adjusted operating income at Moody’s Investor Services (where it accounts for its rating activities) rose 51% year-on-year.

Thanks to its robust economic moat, the company is well positioned to benefit from pent-up demand for debt issuance and is expected to remain a major player in the capital markets for many years to come.