Meet the Dividend Stock That Warren Buffett Backed for Decades. Here's Why Greg Abel Is Still Holding.

Meet the Dividend Stock That Warren Buffett Backed for Decades. Here's Why Greg Abel Is Still Holding.

Justin Pope, The Motley Fool

Mon, August 31, 2026 at 12:25 AM GMT+3 4 min read

Berkshire Hathaway's famous stock portfolio has seen some changes since new CEO Greg Abel took command at the start of this year. It's only natural for a new captain to put their own spin on things. However, some things work so well that it's better to just leave them alone.

That's probably a good way to sum up The Coca-Cola Company (NYSE: KO), one of Warren Buffett's favorite stocks, and one of the longest-standing investments in Berkshire's portfolio today.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Do you like dividends? The global beverage giant offers a simple business model and decades of steady growth that align with Buffett's famous investing style, making it a great potential fit for your portfolio.

An $848 million annual cash machine

Buffett bought Coca-Cola stock for Berkshire Hathaway decades ago, following the infamous 1987 stock market crash. Berkshire had accumulated approximately 400 million shares for $1.3 billion by 1994. Those shares are worth nearly $36 billion today.

Arguably, even more remarkable here is that those shares pay back roughly two-thirds of Buffett's initial investment each year through dividends. Coca-Cola currently pays $2.12 per share in dividends over four quarters, putting Berkshire's annual dividend income at $848 million.

That's money that Berkshire Hathaway can redeploy across its business in many ways to create value for shareholders.

It can still do the same for your portfolio

No, you aren't going to rake in nearly a billion dollars in Coca-Cola dividends, but the same concepts still apply.

Coca-Cola's business is timeless: People will always drink beverages, and its brands are renowned worldwide. Coca-Cola is everywhere. Yet the company still has only 14% of the market in developed countries and just 6% in emerging countries.

It creates a uniquely long growth runway for a company when the entire global population is a potential customer. Coca-Cola can also generate revenue in several ways, including price increases, organic volume growth, new products, and acquisitions.

That's the secret behind Coca-Cola's ability to grow steadily, seemingly year in and year out, raising its dividend along the way. Coca-Cola is a Dividend King with 64 consecutive annual dividend increases. That's something a company can't accomplish without the ability to endure economic cycles and other challenges over the years.

Coca-Cola's dividend is still only 64% of the company's 2026 earnings estimates, so there's plenty of cushion to sustain and continue raising that payout. That's not including future growth; analysts estimate that Coca-Cola will grow its earnings by 8% to 9% annually over the next three to five years.

Therefore, investors can confidently buy Coca-Cola stock and begin building their own dividend cash machine.

Should you buy stock in Coca-Cola right now?

Before you buy stock in Coca-Cola, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Coca-Cola wasn't one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,335,252!*

That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.

See the 10 stocks »

*Stock Advisor returns as of August 30, 2026.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

Meet the Dividend Stock That Warren Buffett Backed for Decades. Here's Why Greg Abel Is Still Holding. was originally published by The Motley Fool