Warren Buffett, “The Oracle of Omaha” and the greatest investor of all time, has built generational wealth for himself and shareholders of Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) with the simple investment strategy of buying wonderful companies at fair prices and holding for the long term.

In 1988, the year after the stock market crash of 1987, Buffett began accumulating shares of soft-drink maker Coca-Cola Co. (NYSE: KO) and has had it as a core holding in his portfolio ever since. Since the start of 1988, Coca Cola stock has risen nearly 3,000%, including a total return of more than 7,000% with dividends reinvested.

Coca-Cola has held the title of the world’s largest beverage company by sales for decades, including total sales just north of $47 billion in 2024, a roughly 3% increase from 2023. Retaining the title for so long is a testament to its core brand as well as its management team’s ability to innovate and acquire new brands along the way. Coca-Cola’s portfolio now consists of more than 200 brands worldwide, including billion-dollar brands such as Sprite, Diet Coke, Powerade, Minute Maid, Fairlife, and its namesake.

Berkshire’s stake in Coca-Cola

Berkshire Hathaway currently owns 400 million shares of Coca-Cola valued at approximately $28.1 billion, which represents approximately 10.3% of its portfolio and make it its third-largest position overall, just behind Apple (Nasdaq: AAPL) and American Express (NYSE: AXP).

Coca-Cola currently pays a quarterly dividend of $0.51 per share, equating to an annual dividend of $2.04 per share and giving its stock a yield of about 2.9% at the time of this writing, which is well above the S&P 500’s yield of about 1.4%.

To determine the annual dividend income Berkshire Hathaway will earn from its stake in Coca-Cola, we simply multiple the number of shares it owns by the annual dividend per share:

Shares of Coca-Cola owned: 400,000,000

Annual dividend per share: $2.04

Total annual dividend: 400,000,000 x $2.04 = $816,000,000

Warren Buffett’s Berkshire Hathaway will receive $816 million in dividends from Coca-Cola in 2025 based on its current dividend rate. This equates to $204 million quarterly, or about $2.23 million daily. Not bad considering Berkshire Hathaway paid a total of about $1.3 billion for its stake in the company from 1988 to 1994.

A growing income stream

Coca-Cola has raised its annual dividend payment for 63 consecutive years, with its latest increase coming just last month to the tune of 5.2%. Coca-Cola is known as a “dividend king,” which is a stock that has 50 or more consecutive years of dividend growth. This is a step up from “dividend aristocrat,” which is a stock that has raised its annual dividend payment for 25 consecutive years or more.

Some other dividend kings include Altria (NYSE: MO), Fortis (NYSE: FTS), United Bancshares (Nasdaq: UBSI), and Coca-Cola’s largest competitor PepsiCo (NYSE: PEP).

How much could you earn with a $1,000 stake in Coca-Cola?

Very few people in the world have the capital to buy 400 million shares of Coca-Cola, but a $1,000 stake, or roughly 14 shares of Coca-Cola, is much more feasible. If you were to buy 14 shares of Coca-Cola at the current market price of about $70, you’d have a total invested amount of $980 and could earn $28.56 per year. This number would be amplified if you were to reinvest those dividends.

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