How Warren Buffett's $25 bn Coca-Cola bet earns him $776 mn in dividends

Warren Buffett's Berkshire Hathaway is set to receive $776 million in dividends from Coca-Cola in 2024, thanks to a raised quarterly payout, marking a 30-year investment

Warren Buffett’s investment in Coca-Cola is often cited as one of the most iconic in the world of finance. In 2024, his company, Berkshire Hathaway, is poised to receive $776 million in dividends from the soft drink giant, following the company’s decision to raise its quarterly dividend, reported The Hindustan Times.

Coca-Cola’s increased dividend and Buffett’s returns

Coca-Cola recently raised its quarterly dividend to 48.5 cents per share, up from 41 cents last year. With 400 million shares in its portfolio, Berkshire Hathaway is set to receive substantial payouts. The increase in dividends underscores the long-term success of the investment, which continues to deliver impressive returns for Buffett, who has held the shares for nearly 30 years.

 

 

The total dividend payout for 2024 amounts to an impressive $776 million, reflecting the current value of the shares, which now exceed $25 billion, according to HT.

Key element of Buffett’s portfolio

Buffett’s Coca-Cola holdings are a cornerstone of his portfolio, with the 400 million shares representing a significant portion of his wealth. This investment, which has proven to be a major financial success, continues to generate robust returns year after year.

A lifelong fan of Coca-Cola

Beyond the financial benefits, Warren Buffett has a personal connection to Coca-Cola. The 94-year-old billionaire is known for his daily consumption of the drink, regularly having five cans a day. As he explained in a 2015 interview with Fortune, Coca-Cola constitutes a quarter of his daily calorie intake. “If I eat 2,700 calories daily, a quarter of that is Coca-Cola. I drink at least five 12-ounce servings. I do it every day,” he had said.

 

Despite holding the largest stake in Coca-Cola, Buffett does not receive any special treatment. His wife, Astrid Menks, is known for hunting for Coca-Cola bargains, often buying it on sale.

Buffett’s transition from Pepsi to Coca-Cola

Interestingly, Buffett wasn’t always a Coca-Cola enthusiast. For nearly five decades, he was a loyal Pepsi drinker, even earning the nickname “Pepsi Warren” from his son, Howard. However, his shift to Coca-Cola occurred in the 1980s, thanks to a neighbour, Don Keough, who later became Coca-Cola’s president and COO.

 

Keough introduced Buffett to Cherry Coke, calling it the “nectar of the gods,” and sent him samples. Hooked by the taste, Buffett officially declared Cherry Coke as the drink of choice at Berkshire Hathaway’s annual meeting in 1986, cementing his loyalty to the brand.