Warren Buffett does not talk about Coca-Cola like a typical stock. He talks about it like an old friend that keeps showing up with a check.
Every year, Coca-Cola (KO) sends Buffett’s Berkshire Hathaway a dividend payment large enough to buy a small company outright. And for six decades running, that check has gotten a little bigger each time.
For everyday investors weighing the value of a name like KO stock, the math behind the payment tells a bigger story about why dividends matter, even in a market obsessed with growth stocks.
As Merrill, the wealth management arm of Bank of America, put it in a recent investor note, “one mistake to avoid is to buy a company’s stock simply because it issues a high dividend.”
Growth prospects and consistency matter as much as yield, the firm noted, and Coca-Cola offers both.
Coca-Cola earns its Dividend King crown
Coca-Cola has increased its dividend every year since 1963, an unbroken streak of 64 years.
That makes it a Dividend King, a title reserved for companies with at least 50 straight years of dividend increases. Only a small number of public companies share that distinction.
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The most recent hike came in February, when Coca-Cola’s board raised the quarterly dividend from $0.51 to $0.53 per share.
It works out to an annualized payout of $2.12 per share, the figure now used to calculate Berkshire’s yearly income from the stock. At current prices, KO stock yields around 2.3%.
Soft drinks, water, and juice are everyday purchases that keep selling across economic cycles. This steady demand funds the payout year after year, according to the company’s own earnings commentary.
Warren Buffett’s Berkshire cashes in on KO stock
Berkshire Hathaway owns 400 million shares of Coca-Cola, according to CNBC, a position Buffett began building in 1988. He has never sold a single share.
At the current annual dividend of $2.12 per share, that stake pays Berkshire roughly $848 million a year.
Key dividend ratios investors watch on KO stock:
- Annual dividend: $2.12 per share
- Dividend yield: Approximately 2.3%
- Payout ratio: Roughly 75% of FCF
- Consecutive years of dividend increases: 64, earning Dividend King status
- 30-year average annual dividend growth rate: Approximately 7.4%
- Total dividends expense in 2026 (e): About $8.8 billion
According to a Business Insider report, Berkshire spent $1.4 billion to purchase 400 million shares of Coca-Cola.
An annual dividend payout of $848 million indicates Warren Buffett’s yield-at-cost is more than 60% for the beverage giant.
The Oracle of Omaha has pointed to Coca-Cola for years as an example of how holding a quality dividend payer through decades of market swings can build extraordinary long-term wealth.
Strong Q2 results support Coca-Cola’s payout
The dividend does not exist in a vacuum. A growing cash flow base funds it, and Coca-Cola’s latest earnings call showed why the payout remains sustainable.
CFO John Murphy told investors on the company’s second-quarter 2026 earnings call that free cash flow came in at about $6.9 billion.
Analysts forecast FCF to expand to $12.1 billion in 2026. Comparatively, annual dividend expense is about $9.1 billion, indicating a payout ratio of 75%.
Related: Coca-Cola absorbs margin hit for expansion in key market
Comparable earnings per share of $0.97 rose 11%, helped by an easier year-ago comparison and momentum from Coca-Cola’s FIFA World Cup marketing campaign.
Murphy also pointed to a net debt leverage ratio of 1.4 times EBITDA, well below the company’s target range of 2 to 2.5 times. “Given the momentum of our business and the strength of our balance sheet, we have increased flexibility and optionality to continue to both reinvest in our business and return capital to shareowners.”
Coca-Cola also raised its full-year outlook, now expecting organic revenue growth of approximately 5% and comparable earnings per share growth of 9% to 10% for 2026.
Wall Street is bullish on this dividend stock
Analysts have taken notice of both the growth and the payout for Coca-Cola stock.
- Barclays analyst Lauren Lieberman raised her price target on KO stock to $93 from $91 while maintaining an Overweight rating following the company’s second-quarter results.
- TD Cowen went further, lifting its target to $100 from $90 and noting that Coca-Cola “remains a top pick” among consumer staples names.
- RBC Capital also raised its KO stock price target, to $96 from $87, keeping an Outperform rating after what it called a clean earnings beat.
For Berkshire, the $848 million check is a rounding error against the size of Buffett’s overall portfolio.
But for everyday investors weighing whether dividend stocks like KO still deserve a spot in a growth-chasing market, Coca-Cola’s streak stretching back six decades, and the cash flow now backing it, are hard to ignore.
Related: Dividend King Coca-Cola is suddenly acting like a growth stock