Warren Buffett’s Berkshire Hathaway has long held a significant stake in Coca-Cola (NYSE:KO), benefiting from the beverage giant’s 63-year dividend growth streak. The company paid its most recent quarterly dividend of $0.51 per share on December 15, 2025, to shareholders of record as of December 1, 2025. At an annualized rate of $2.04 per share, this represents a substantial income stream for long-term holders.
Berkshire Hathaway (NYSE: BRK-B) maintains a 9.32% stake in Coca-Cola. The holding company itself pays no dividend, preferring to reinvest earnings and buy back stock, yet generates significant dividend income across its equity portfolio.
How Much Buffett Is Collecting From Coca-Cola
Berkshire Hathaway owns approximately 400 million shares of Coca-Cola. With Coca-Cola paying an annual dividend of $2.04 per share, that stake generates roughly:
400,000,000 shares × $2.04 = $816 million per year
That breaks down to about $204 million every quarter flowing from Coca-Cola to Berkshire.
For a single stock position, that level of income is extraordinary. Coca-Cola has effectively become a steady cash-producing asset inside Berkshire’s portfolio, sending more than three-quarters of a billion dollars annually to the conglomerate without requiring Buffett to sell a single share.
The Power of Yield on Cost
Buffett’s long-term investment approach with Coca-Cola demonstrates the compounding power of dividend growth over decades. The stock’s market value has multiplied many times over, while the dividend growth illustrates the compounding machine Buffett built through patient capital allocation.
Coca-Cola has raised its dividend for 63 consecutive years, earning Dividend King status. The most recent increase came in 2025, when the quarterly payout rose 5.2% from $0.485 to $0.51 per share. Over the past five years, the dividend has climbed from $1.60 in 2019 to $2.04 in 2025 – a 27.5% cumulative increase.
Dividend Sustainability: A Mixed Picture
While the dividend growth streak remains intact, the underlying cash flow dynamics warrant attention. In 2025, Coca-Cola paid out $8.78 billion in dividends against operating cash flow of just $7.41 billion – a payout ratio of 118.5%. This means the company distributed more cash to shareholders than it generated from operations, supplementing the dividend through debt issuance or balance sheet reserves.
The same pattern emerged in 2024, when dividends totaled $8.36 billion against operating cash flow of $6.81 billion (a 122.8% payout ratio). By contrast, 2023 showed healthier coverage: $7.95 billion in dividends against $11.6 billion in operating cash flow, or 68.6%.
On a net income basis, the dividend remains well-covered. Full-year 2025 net income of $13.14 billion covered the $8.78 billion dividend payout at 1.5x. Still, the divergence between operating cash flow and dividend payments suggests either temporary working capital pressures or a deliberate shift in capital allocation that bears monitoring.
Business Performance and 2026 Outlook
Coca-Cola reported Q4 2025 revenue of $11.82 billion and adjusted earnings per share of $0.58. For the full year, revenue reached $47.94 billion with operating income of $13.76 billion. Management guided to 4% to 5% organic revenue growth and 7% to 8% comparable EPS growth in 2026, with expected free cash flow of $12.2 billion – a meaningful improvement from recent years if realized.
The company continues to drive volume through innovation. Coca-Cola Zero Sugar posted 13% volume growth in Q4, and the company is expanding distribution of 7.5-ounce mini cans in convenience stores to capture on-the-go consumption. Mini cans already account for more than 9% of sparkling soft drink sales in large stores, indicating consumer appetite for portion-controlled formats.
Leadership changes are also underway. Henrique Braun will take over as CEO on March 31, 2026, succeeding James Quincey. The company appointed Sedef Salingan Sahin as Chief Digital Officer to accelerate digital transformation efforts.
What to Watch
Investors should monitor whether Coca-Cola’s 2026 free cash flow guidance of $12.2 billion materializes. If achieved, it would restore comfortable dividend coverage and signal improved working capital management. The company is scheduled to present at the CAGNY conference on February 17, 2026, where incoming CEO Henrique Braun and CFO John Murphy are expected to detail volume and pricing strategies for the year ahead.
For Buffett and Berkshire, the Coca-Cola position exemplifies the value of buying quality businesses and holding them long enough for compounding to work. The dividend stream from this holding demonstrates how patient capital allocation in dividend-growing companies can generate substantial income over time.
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