On the Equity Mates podcast recently, Bill Ackman shared a story of the time he had dinner with Warren Buffett. Ackman said he offered Buffett water, but he turned it down for a Cherry **** e. Buffett said, "Bill, I haven't had water in 48 years." The dinner was years ago, but the story only went viral when Ackman mentioned it on the podcast. And we know this wasn't some newfound love Buffett had for **** e. His company, Berkshire Hathaway (BRK.A), built its stake in Coca-Cola (KO) between 1988 and 1994 for about $1.3 billion. Coca-Cola has split its stock since then, so that stake is now 400 million shares.
Coca-Cola pays $0.53 a share in dividends each quarter, or $2.12 a year. This means Berkshire gets paid roughly $848 million a year for its investment. That's about 65% of what Berkshire originally paid, coming back in a single year. And since Coca-Cola raises its dividend every year, that number keeps growing. Back in 1994, the same shares paid Berkshire about $75 million a year, not even one-tenth of what it earns today. At around $96 a share, the stake is now worth approximately $38.4 billion. Berkshire still holds the entire stake, and its CEO, Greg Abel, called Coca-Cola one of four core holdings.
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