It’s easy enough to say what’s good enough for Warren Buffett is good enough for me. But Coca-Cola (NYSE:KO) is the poster child for Buffett’s long-term strategy and success, so why go against the guru? Coca-Cola does of course have competition, most notably from PepsiCo (NYSE:PEP). But with Coke’s incredibly rich history, investors can expect this story to continue: Dividends paid since 1883, and increases three pages long on the historical chart.
A recent 2-1 stock split has put the shares in a very nice price range for new investors, and with a $1 per share annual dividend and 2.70% yield, it’s a good time to be in the stock.
Coca-Cola sits on $17 billion in cash and another $3 billion in free cash flow to support a 52% dividend payout ratio, which is low enough for me to believe the increase won’t go away anytime soon. I suspect if Coca-Cola had any inkling that might change, Mr. Buffett would hear about it, and so would you. Not to worry!