Berkshire Hathaway's 38-Year Bet on Coca-Cola Continues to Pay Off
Coca-Cola's position in Berkshire Hathaway's portfolio has been one of its most enduring and successful investments, spanning over 38 years. Warren Buffett began accumulating shares of Coca-Cola after the 1987 market crash, and his successor, Greg Abel, continues to hold onto it with conviction.
The math behind Berkshire's loyalty is compelling: in 1994, Berkshire had assembled roughly 400 million shares at a total cost of $1.3 billion. Today, those same shares are worth approximately $36 billion. But the more striking figure may be the income stream generated by Coca-Cola's annualized dividend of $2.12 per share, which translates to about $848 million flowing into Berkshire's coffers every year.
This level of dividend income allows Berkshire to recover nearly two-thirds of its original investment annually. Abel inherits a business with 'structurally simple and globally embedded' economics, making it an unusually attractive investment opportunity.