400 Million Shares and 38 Years Later…
Coca-Cola KO ( ▼ 0.43% ) has been around for 140 years.
Which makes its latest numbers rather impressive.
→ Last quarter, organic sales grew 6%.
→ Case volumes rose 5%.
→ And the stock has been trading near record highs.
Not bad for a company whose flagship product was invented in 1886.
But perhaps the more remarkable number is 400 million Coca-Cola shares Berkshire Hathaway still owns.
Warren Buffett started buying Coke in 1988, and over the decades since, Berkshire has watched the stock climb, fall more than 50%, recover, and eventually become one of its most famous investments.
It also kept collecting the dividends.
And the checks have become so large that even Elon Musk couldn’t resist commenting.
“Berkshire Hathaway [is] high on Coke.”
So what exactly has kept this 140-year-old company working?
And at today’s price, does the formula still work for investors?
Let’s see.⇩
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Still Growing at 140…
Coca-Cola has been selling drinks since 1886, and somehow there are still more drinks to sell.
Organic sales grew 6% last quarter, more than twice Pepsi’s pace, while case volumes rose 5%.
That volume figure is worth paying attention to.
Coca-Cola has spent the inflationary years raising prices, so sales growth alone doesn’t tell us whether people are actually drinking more Coke or simply paying more for it.
→ But last quarter, they were buying more.
That’s particularly impressive for a company already operating across more than 200 countries and territories.
Coke also benefits from being a habit that doesn’t cost very much to maintain.
Its drinks are bought frequently, widely available, and familiar enough that choosing one rarely requires much consideration.
At Coca-Cola’s scale, it doesn’t take spectacular growth to move the numbers.↓
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The $848 Million Check!!!
Buffett’s Coke investment pays Berkshire an enormous amount of cash every year.
Coca-Cola’s annual dividend is now $2.12 per share.
Multiply that by Berkshire’s 400 million shares and you get:
→ $848 million a year.
Without selling a single share.
Source: PYMNTS, Globe and Mail · 2025–2026
Back in 1994, Berkshire collected just $75 million in annual dividends from Coke.
By 2022?
→ $704 million.
Buffett summed it up rather simply:
“Growth occurred every year, just as certain as birthdays.”
Coca-Cola has now raised its dividend for 64 consecutive years.
Which means Berkshire hasn’t needed to sell Coke to make money from Coke.↓
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Holding Was the Hard Part.
Buying Coke in 1988 was one decision.
Holding it for the next 38 years meant repeatedly deciding not to sell.
That became especially difficult in the late 1990s.
After peaking in July 1998, Coca-Cola fell 55.29% before finally bottoming in March 2003.
Nearly five years. More than half its value gone.
→ Buffett didn’t sell.
And, crucially, he had no way of knowing how the story would eventually end. There was no +9,234% sitting at the end of the chart telling him to be patient.
And…at times, Pepsi was doing considerably better.↓
The 38-Year Scoreboard.
So, was all that patience worth it?
Had you invested $10,000 in Coca-Cola at the end of 1987 and reinvested the dividends, it would have grown to $933,432 by September 2026.
The same $10,000 invested in Pepsi PEP ( ▼ 0.12% )? $634,211.
The annual difference was just 1.12 percentage points.
Over 38 years, that became nearly $300,000.
But even this scoreboard makes the story look cleaner than it was.
There were entire stretches when Pepsi looked like the better stock.
✱ These are hypothetical total returns for $10,000 invested at the end of 1987 with dividends reinvested. They illustrate the stocks’ performance, not Buffett’s actual return.
The Gap Got Wider…
The long-term scoreboard favors Coke.
Recently, the difference has become much more pronounced.
Over the past five years, Coca-Cola has returned 87.25%.
Pepsi?
→ Just 1.98%.
The difference is visible in where the two stocks sit today. Coca-Cola is just 3.7% below the record high it set in August. Pepsi remains roughly 23% below its May 2023 peak.
There is an interesting trade-off.
Pepsi now offers a 4.22% dividend yield, compared with roughly 2.4% for Coke.
That makes Pepsi the higher-yielding stock today, but the past five years are a useful reminder that dividend yield is only one piece of an investor’s total return.
The Price of Quality…
Coca-Cola’s business still looks healthy.
The company expects roughly $12.4 billion in free cash flow this year — the cash left after operating expenses and capital spending — against about $9.1 billion going toward dividends.
That leaves some room between the cash coming in and the checks going out.
But there’s another number investors have to consider:
The price of the stock itself.
→ Coca-Cola’s price-to-sales ratio is above its five-year average, while
→ its price-to-earnings ratio is roughly in line with its longer-term norm.
→ Its price-to-book ratio sits slightly below average.
So while Coca-Cola’s business remains strong, the stock isn’t particularly cheap at today’s valuation.
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