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Durable demand, a strong brand, and pricing power have supported this stock’s 16% rise in 2025, as investors view the business as a safe play.
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Berkshire Hathaway generates $816 million in annualized dividend income from this consumer-facing enterprise.
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Investors looking to outperform the market over the long term should look elsewhere.
One of Warren Buffett’s core investment tenets is to buy high-quality companies that possess economic moats. Having durable competitive strengths helps a business defend itself against existing rivals and new entrants to the industry. Look at Berkshire Hathaway‘s massive $277 billion public equity portfolio and you’ll see this philosophy on full display.
The conglomerate has a stake in dozens of companies, but Buffett’s firm owns 400 million shares of one top dividend stock. Is it a must-buy in May?
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Based on the stock market’s performance in 2025, investors are worried that economic conditions will worsen, and a recession could be coming soon.
This backdrop isn’t that much of a concern for Coca-Cola (NYSE: KO), the beverage giant that Buffett seems to love. The company exceeded Wall Street estimates in Q1 2025 (the three months ended March 28), reporting $11.2 billion in adjusted revenue, which was flat compared to the year-ago period.
Management follows volume trends closely. Coca-Cola sold 2% more unit cases during the quarter than in Q1 2024. Countries like India, China, and Brazil were called out as strong markets. It’s also worth mentioning the star of the show, Coca-Cola Zero Sugar, an extremely popular product that saw 14% volume growth globally.
In typical fashion, Coca-Cola flexed its pricing power. Volume might not see much expansion potential, due to the company’s presence in virtually every corner of the world. However, Coca-Cola’s brand is so powerful, contributing to its moat, that it benefits from tremendous customer loyalty. There was a positive 5% effect due to favorable pricing and mix in the quarter.
Coca-Cola might be known for selling over 200 different beverage products. But it’s important to know that the business relies on third-party partners to handle bottling and packaging. The result is an extremely profitable operation.
After posting a stellar 22.6% net income margin in 2024, Coca-Cola’s bottom line expanded with a 29.9% margin in Q1. This setup is extremely beneficial for Buffett and Berkshire.
