Berkshire Hathaway Sticks with Coca-Cola Amid High Dividend Returns

Greg Abel's leadership at Berkshire Hathaway has raised questions about how he'll manage the company's investments, including its longtime holdings. One stock that will likely remain in Berkshire's portfolio is Coca-Cola (NYSE: KO), due to its high dividend returns and brand loyalty.

Berkshire purchased 400 million shares of Coca-Cola between 1988 and 1994 for approximately $1.3 billion. Since then, the company has paid out dividends every year, with a current yield of 2.4%. However, for Berkshire, this translates to a dividend yield of 65%, thanks to its large stake in the company.

The dividend is likely the main reason Abel will continue holding Coca-Cola stock. Despite underperforming the S&P 500 over the last decade, the company has shown strong pricing power and growth in its healthier beverage brands.