How Warren Buffett's 40-year-old investment in Coca-Cola earns him millions every year
Topics: World News, Business, Money, Food and Drink
Ellie Kemp
Featured Image Credit: Daniel Acker/Bloomberg via Getty Images
Topics: World News, Business, Money, Food and Drink
Warren Buffett's investment in Coca-Cola almost four decades ago is still pouring billions into his company's pockets.
The 94-year-old currently has a net worth of $153 billion, as per Forbes, making him the fifth richest man in the world.
He found success as chairman and CEO of Berkshire Hathaway, a multinational conglomerate holding company headquartered in Omaha, Nebraska.
Originally a failing textile company, Buffett took control of it in the 1960s and transformed it into a massive holding company - a business that owns and controls other companies.
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Its major subsidiaries - companies Berkshire fully owns - includes car insurance company GEICO, ice cream giant Dairy Queen and battery manufacturers Duracell.
Berkshire has also made huge investments in other industry giants, including Apple, American Express, Kraft Heinz - and, of course, Coca-Cola.
And it's the latter - his favorite beverage - that is on track to earn his company around $2.23 million a day.
Let's break it down...
In the aftermath of the 1987 stock market crash, Buffett began acquiring Coca-Cola shares, reports Investopia, confident that company's strong brand and global recognition would see it bounce back.
By 1994, Berkshire had invested approximately $1.3 billion to amass 400 million shares of Coca-Cola - roughly nine percent of the company.
And over the years, that investment has more than paid off.
By 2023, Berkshire had collected more than $10 billion in dividends from Coca-Cola.
By 2024, the market value of that original $1.3 billion investment had soared to over $25 billion - a return of nearly 2,000 percent.
Even more impressive is the ongoing dividend income. Coca-Cola currently pays $2.04 per share annually, and with 400 million shares, Berkshire earns about $816 million in dividends every year - that’s roughly $2.23 million per day.
Put another way, Berkshire now recoups its entire original investment every two years just from dividends alone.
It’s no wonder Buffett is often dubbed the 'king of investment', then.
Better yet, Coca-Cola is a product Buffett genuinely endorses. He told Fortune in 2015: "I'm one quarter Coca-Cola. If I eat 2,700 calories a day, a quarter of that is Coca-Cola.
"I drink at least five 12-ounce servings. I do it everyday. I have three Cokes during the day and two at night."
Given that Berkshire Hathaway earns hundreds of millions annually in Coca-Cola dividends, you could say Buffett is literally paying himself to drink it.
Work smarter, not harder, I guess!