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Warren Buffett Owns $29 Billion of This Top Dividend Stock: Could It Make You a Millionaire One Day?
KOCoca-Cola(KO) The Motley Fool·2025-03-07 13:00

Core Insights - Warren Buffett's investment in Coca-Cola represents a significant stake of 29billion,makingitBerkshireHathaway′sfourth−largestposition[1]−Coca−Colaisrecognizedforitsstrongbrandandwideeconomicmoat,whichsecuresitsmarketpositioninthenon−alcoholicbeveragesector[3]FinancialPerformance−InQ42024,Coca−Colaexperienceda929 billion, making it Berkshire Hathaway's fourth-largest position [1] - Coca-Cola is recognized for its strong brand and wide economic moat, which secures its market position in the non-alcoholic beverage sector [3] Financial Performance - In Q4 2024, Coca-Cola experienced a 9% price increase, contributing to a 6% revenue growth, supported by a 2% increase in unit volume [4] - The company boasts an impressive operating margin of 23% and a dividend yield of 2.82%, with dividends having increased for 63 consecutive years [5][6] Market Position and Growth Prospects - Coca-Cola's revenue for 2024 was 47.1 billion, reflecting only a 2% increase over the past decade, indicating limited growth potential as a mature company [7] - Despite slow revenue gains, Coca-Cola is expected to remain relevant and lead the industry for decades, with minimal risk of disruption [8] Valuation and Investment Considerations - Coca-Cola shares currently trade at a price-to-earnings ratio of 29.3, which is 11% higher than the five-year average and represents a premium compared to the S&P 500 [9] - While Coca-Cola may not outperform the S&P 500 in the long term, it is suitable for investors seeking steady income rather than significant capital appreciation [10]