Warren Buffett’s Berkshire Hathaway just received a dividend check for $194 million dollars from Coca-Cola.
Berkshire Hathaway owns 400 million shares of Coca-Cola (KO), which are projected to generate $736 million in annual dividend income.
This comes out to roughly $2.155 million in dividend income per day, $89,805 dollars in dividend income per hour, $1,497 dollars in dividend income for Berkshire Hathaway every minute, or almost $24.95 every single second.
Those shares have a cost basis of $1.29 billion dollars, and were acquired between 1988 – 1994. This comes out to $3.25/share. The annual dividend payment producesan yield on costof over 59.69%. This means that Berkshire receives its original cost back every other year in dividends alone, while still retaining full ownership of its shares. This is why I believe thatWarren Buffett is a closet dividend investor.
Since 1994, Buffett has received $26.795/share in total dividend income from Coca-Cola.
That is $10.718 billion in dividend income, against a total cost of $1.299 billion, which was allocated to buy stakes in other businesses and shares.
His Coca-Cola stock is worth $24.472 billion. Given the fact that Coca-Cola has also repurchased stock over the years, it also means that his ownership in Coca-Cola has increased over time, without adding a single dime.
This is a testament to the power oflong-term dividend investing, where time in market is the investors best ally, not timing the market. If you can select a business which is run by able and honest management, which has solid competitive advantages, and which is available at a good price today, one needs to only sit and let the power of compoundingdo the heavy lifting for them. As Buffett likes to say, time is a great ally for the good business. In the case of Coca-Cola, the past 33 years have been a great time to buy and hold the stock. The company has been able to tap emerging markets in Eastern Europe, Asia, Africa and Latin America like never before. As a result, it has been able to receive a higher share of the worldwide drinks market, which has also been expanding as well. If you add in strategic acquisitions, new product development, cost containment initiatives and streamlining of operations, you have a very powerful force for delivering solid shareholder returns. With dividend investing your are rewarded for smart decisions you have made years before.
Ifthey closed the stock market for a period of 10 years, Buffett would still be earning steady cashflow from his investment in Coca-Cola. This is because ten years from now, the company would likely be earning more than what it is earning today, and would likely be distributing more in dividend income than it is paying to shareholders today. Receiving a huge dividend check every three months is a reminder that you are a shareholder in a real company with real products that are consumed by billions of consumers worldwide. The stock is not a lottery ticket but a partial ownership in a company, which entitles you to a share of the profits being paid out to you as a shareholder in the form of dividends.
At the end of the day, if you identify a solid business, that has lasting power for the next 20 – 30 years, the job of the investor is to purchase shares at attractive values, and hold on to it. This slow and steady approach might seem unexciting initially, but just like with the story of the slow-moving tortoise beating the fast moving hare,the power of compoundingwould work miracles for the patient dividend investor.
In the case of Warren Buffett's investment in Coca-Cola, he is able to recover his original purchase price in dividends alone, every two years. Even if Coca-Cola goes to zero tomorrow, he has generates a substantial returns from dividends alone, which have flown to Berkshire's coffers, and have been invested in a variety of businesses that will benefit Berkshire Hathaway's shareholders for generations to come.
Currently, Coca-Cola is selling for 21.73 times forward earnings and yields 3.17%. Thisdividend kinghas managed to increase dividends for 61 years in a row.
There were only 47 companies in the US, which have gained membership into theexclusive list of dividend kings, as of early 2024.
Over the past decade, Coca-Cola has managed to increase dividends by 5.10%/year. This is much better than the raises I have received at work over the past decade, despite the fact that I have routinely spent 55 - 60 hour weeks at the office.
Relevant Articles:
-Coca-Cola: A wide-moat dividend growth stock to buy and hold
-Warren Buffett Investing Resource Page
-Seven wide-moat dividends stocks to consider
-Warren Buffett’s Dividend Stock Strategy
-The importance of yield on cost
FAQs
Warren Buffett's Berkshire Hathaway just received a dividend check for $194 million dollars from Coca-Cola. Berkshire Hathaway owns 400 million shares of Coca-Cola (KO), which are projected to generate $736 million in annual dividend income.
How much does Warren Buffett get in dividends from Coca-Cola? ›
A massive passive income stream
Berkshire currently owns 400 million shares of Coca-Cola. This means that on an annualized basis, Warren Buffett's company generates $736 million in dividend income from the beverage giant. That is a huge passive income stream that likely explains why Buffett isn't exiting the position.
What is the yield on cost for Buffett's Coca-Cola? ›
One of his most iconic investments is The Coca-Cola Co. (NYSE:KO), a position he first established in 1988 and has held ever since. Today, Berkshire Hathaway is reaping the rewards of this patience, earning a staggering 59.7% yield on its original investment.
What dividend did Warren Buffett earn? ›
Warren Buffett, will earn dividends worth $6 billion in 2024, which makes a $16.44 million per day! The renowned investor has always placed an emphasis on long-term profits, and his choices have consistently shown results.
How much dividend did Warren Buffett get from Apple? ›
Apple: $869.3 million in annual dividend income
Even after Buffett and his aides pared down Berkshire's Apple stake by some 10 million shares during the fourth quarter, the nearly 905.6 million shares still held will generate about $869 million in annual dividend income.
What is Warren Buffett's best dividend stock? ›
Warren Buffett's Dividend Portfolio
| Ticker | Name | Industry |
|---|
| CVX | Chevron | Integrated Oil and Gas |
| SIRI | Sirius XM | Cable and Satellite |
| C | Citigroup | Diversified Banks |
| KO | Coca-Cola | Soft Drinks and Non-alcoholic Beverages |
6 more rowsMay 20, 2024
Dividend growth: PepsiCo wins
Looking back since the peak of the Covid-19 crisis (see chart below), PepsiCo has increased its per-share dividend payments at a substantially faster pace than Coca-Cola: 10% today on a trailing 12-month basis versus co*ke's 5%.
What is Berkshire's secret stock? ›
Warren Buffett's Berkshire Reveals Its Mystery Stock: Chubb.
What is the average dividend for Coca-Cola? ›
The Coca-Cola Company ( KO ) dividend payments per share are an average of 4.78% over the past 12 months, 4.17% over the past 36 months, 3.50% over the past 60 months, and 5.00% over the past 120 months.
Does Warren Buffett own Chewy? ›
Chewy. The third and final supercharged growth stock added to Warren Buffett's secret portfolio during the second quarter is online-based pet food and treats company Chewy (NYSE: CHWY). New England Asset Management opened its position with a stake of more than 1,600 shares.
Warren Buffett is widely considered the greatest investor of all time, and much of his investment strategy relies on collecting dividend payments.
What kind of car does Warren Buffett drive? ›
Despite being the sixth-richest person globally, Warren Buffett continues to drive a 2014 Cadillac XTS he purchased with hail damage. Although he can afford any luxury vehicle, Buffett prefers the practicality of his 10-year-old car.
Why Warren Buffett doesn t like dividends? ›
Like many business leaders, Buffett feels that investing back into the business provides more long-term value to shareholders than paying them directly because the company's financial success rewards shareholders with higher stock values.
How much money does Bill Gates make from dividends? ›
Here Are The 5 Stocks Generating The Most Cash Flow For His Portfolio. Bill Gates, the seventh richest person in the world, has a well-documented affinity for dividend income.
Is Amazon paying a dividend? ›
Amazon is the only company in the S&P 500 with a trillion-dollar market capitalization that doesn't pay a dividend. Microsoft, Apple, Alphabet, and Meta Platforms all pay. Even super-hot artificial intelligence stock Nvidia yields 0.02%. It pays 4 cents a quarter.
Why did Buffett sell Apple? ›
This is a huge move considering that Apple used to make up over 50% of Berkshire's portfolio and is now down to 40%. So why is Berkshire selling? It's all about realizing profits -- and taking advantage of an unusually low tax rate on corporate profits.
How much does co*ke a Cola pay in dividends? ›
Dividend Data
The Coca-Cola Company's ( KO ) dividend yield is 3.09%, which means that for every $100 invested in the company's stock, investors would receive $3.09 in dividends per year. The Coca-Cola Company's payout ratio is 73.72% which means that 73.72% of the company's earnings are paid out as dividends.
How much of Coca-Cola stock does Warren Buffett own? ›
Warren Buffett Coca-Cola Co
Warren Buffett acquired 400 Million Coca-Cola shares worth $24.8 Billion. That's 7.23% of their entire equity portfolio (4th largest holding). The investor owns 9.10% of the outstanding Coca-Cola stock. The first Coca-Cola trade was made in Q4 1998.
What is the special dividend for Coca-Cola? ›
Coca-Cola Consolidated, Inc. (NASDAQ: co*kE) declares a regular quarterly cash dividend of $0.50 per share and a special cash dividend of $16.00 per share, totaling $150 million. Both dividends are payable on February 9, 2024, to stockholders of record as of January 26, 2024.
How much dividends does Berkshire pay? ›
Buffett loves stocks with dividend, but Berkshire doesn't pay one — Here's why.
