Legendary investor Warren Buffett has achieved incredible returns throughout his career. From 1964 to 2022, his company Berkshire Hathaway Inc. BRK delivered an overall gain of 3,787,464%, surpassing the S&P 500’s 24,708% return in the same period.
In addition to investing in stocks that increased in value, Buffett also collects dividends – a lot of them.
Buffett famously said, “If you don’t find a way to make money while you sleep, you will work until you die.”
Many companies in Buffett’s portfolio pay dividends to their shareholders. One of the most notable is Coca-Cola Co. KO.
Buffett began purchasing shares of Coca-Cola in the late 1980s. Currently, Berkshire holds 400 million shares of Coca-Cola worth $23.1 billion.
It’s no secret that Buffett is a fan of the soft drink. He once stated, “If I eat 2,700 calories a day, a quarter of that is Coca-Cola.”
Furthermore, Buffett has unwavering confidence in the company’s business. He said, “If you gave me $100 billion and told me to take away Coca-Cola’s soft drink leadership in the world, I would give it back to you and say it can’t be done.”
This confidence translates into substantial passive income. In 2022, Coca-Cola paid four quarterly dividends of 44 cents per share, totaling $1.76 per share for the year. With Berkshire holding 400 million shares, it received $704 million in dividends from Coca-Cola.
However, you don’t need to be as experienced as Warren Buffett to earn dividends from Coca-Cola.
Growing Dividends From Coca-Cola
In 2022, Coca-Cola paid quarterly dividends of 44 cents per share. But the dividends are increasing. In February 2023, Coca-Cola’s board approved a 4.6% raise, bringing the quarterly dividend to 46 cents per share.
This marked the company’s 61st consecutive annual dividend increase.
Despite the fluctuating world economy over the past six decades, Coca-Cola shareholders have consistently received larger dividend payouts each year.
Coca-Cola pays dividends quarterly. To receive $1,000 per month from the company, you would need $3,000 per quarter. This requires owning approximately 6,521.74 shares. To calculate this, divide $3,000 by the quarterly payout of $0.46 per share.
Since Coca-Cola currently trades at $57.81 per share, owning 6,521.74 shares would amount to approximately $377,022 worth of stock.
If your goal is to earn $200 per month ($600 per quarter), you would need 1,304.35 shares ($600/$0.46) or $75,404 worth of Coca-Cola stock (1,304.35 x $57.81).
Despite the company’s solid track record of dividend growth, its stock can still be volatile. Year to date, Coca-Cola stock has declined by about 8%.
Morgan Stanley analyst Dara Mohsenian predicts better days ahead for Coca-Cola, with an Overweight rating and a price target of $70 — approximately 21% higher than the current stock price.
Remember, stocks can be highly volatile, and even top analysts are not always correct. Therefore, it’s essential to conduct thorough research and due diligence before making investment decisions.