Dividend growth investing has proven to be a successful strategy for long-term investors, and Berkshire Hathaway’s investment in Coca-Cola is a prime example of this. Coca-Cola, one of the largest beverage companies in the world, has consistently generated net revenue and earnings due to its global presence and regular demand for its brands.
Staggering Results
Berkshire Hathaway’s investment in Coca-Cola dates back to 1988 when Warren Buffet first purchased shares of the company. Since then, the investment has yielded staggering results for the holding company.
In 2019, Berkshire Hathaway’s Coca-Cola investment had a market value of over $22 billion, and it has generated billions in dividend income.
Dividend King
Coca-Cola has a 61-year dividend growth streak, positioning it as a Dividend King, a company that has increased its dividend payout for at least 50 consecutive years.
The company’s dividend payout ratio is projected to remain under 71% in 2023, allowing for mid-single-digit dividend raises each year. This consistency and stability have made Coca-Cola an attractive option for dividend growth investors.
Investment Potential
The non-alcoholic beverages industry’s average forward P/E ratio is 22.6, and Coca-Cola’s forward P/E ratio is 22.9, making it only marginally higher. This makes Coca-Cola an attractive option for dividend growth investors looking to buy a company that is undervalued in comparison to its industry.
With its consistent earnings growth and dividend payout history, Coca-Cola is a buy for dividend growth investors.
Global Presence
Coca-Cola’s global presence in over 200 countries and territories allows the company to continue to generate consistent earnings growth.
The company’s products are recognized worldwide, and its brands have a strong following. As the world continues to evolve, Coca-Cola is positioned to adapt and remain a leader in the beverage industry.
Investing for the Long-Term
Dividend growth investing is a long-term investment strategy that seeks to buy and hold companies that have a history of consistently increasing their dividend payouts. While it may not provide immediate returns, this investment strategy can generate significant results over time. Coca-Cola’s consistent earnings growth and dividend history make it an attractive option for investors looking to build long-term wealth.
Berkshire Hathaway’s investment in Coca-Cola has proven to be a successful example of dividend growth investing. Coca-Cola’s consistent earnings growth, dividend payout history, and global presence make it an attractive option for dividend growth investors. While the company’s forward P/E ratio is only marginally higher than its industry average, its long-term potential for growth makes it a buy for investors looking to build long-term wealth.
