This Classic Warren Buffett Stock With a Nearly 3% Dividend Yield Is Crushing the Stock Market in 2025

Core Viewpoint - The stock market has faced challenges in 2023, with a decline of about 5% as of March 28, while Berkshire Hathaway's stock has risen by 16.5%, indicating a flight to safety among investors [1]. Group 1: Berkshire Hathaway and Coca-Cola - Berkshire Hathaway's equities portfolio, valued at $290 billion, has seen many stocks perform well this year, particularly Coca-Cola, which has a nearly 3% dividend yield [2]. - Coca-Cola is considered a "true Buffett stock," having been a significant holding since 1988, now representing nearly 10% of Berkshire's total holdings [4]. - Buffett favors companies with strong brands that create a competitive moat, and Coca-Cola exemplifies this with its ability to maintain high profitability and returns on equity [5]. Group 2: Coca-Cola's Performance and Strategy - Coca-Cola's stock has increased by over 14.5% this year, outperforming the broader market, driven by a surprise revenue increase from its sparkling beverages division [5]. - The company's strong brand allows it to pass on inflation-related cost increases to consumers, mitigating concerns over aluminum tariffs [6]. - Analysts view Coca-Cola as a safe investment amid challenges in the consumer staples sector, highlighting its resilience against various economic pressures [7]. Group 3: Diversification and Stability - Coca-Cola has adapted to consumer trends by expanding into healthier beverage options, now owning 200 brands globally, including soda, alcohol, and coffee [8]. - While Coca-Cola may not provide the same growth potential as tech stocks, it has shown stability, with a 65% increase over the past five years, averaging annual returns of 13% [9]. - The company offers reliable passive income with a dividend yield of approximately 2.9%, having raised its dividend for 63 consecutive years and returning over $93 billion in dividends since 2010 [10].