Buffett's Coca-Cola Dilemma: High Price or Reliable Dividend

Coca-Cola's stock price has reached $88 per share, but investors should consider whether this is a good time to buy.

The beverage giant's flagship brand is a major factor in its success, which has led to 64 consecutive years of dividend increases under Warren Buffett's leadership at Berkshire Hathaway.

Berkshire Hathaway owns 9.3% of Coca-Cola's outstanding shares and collects $848 million in dividend income this year alone from an original $1.3 billion investment.

This significant dividend payout may be a reason for Buffett's successor, Greg Abel, to hold onto the stock rather than sell it.

However, the high price of Coca-Cola's stock and its P/E ratio of 27 may make it less attractive compared to rival PepsiCo, which has a lower valuation and higher dividend yield at almost 4.2%.