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Why Warren Buffett Loves Coca-Cola Stock so Much

Brand power and steady cash flows make Coca-Cola stock a Warren Buffett favorite.

By Jordan Major

Edited by Kristy DeSmit

Updated Feb. 17, 2026

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When people talk about legendary long-term investments, Coca‑Cola (NYSE:KO) almost always comes up, and that's largely because of Warren Buffett. For decades, the renowned investor has pointed to Coca-Cola as one of his favorite stocks, holding it through recessions, market crashes, and shifting consumer trends as part of a stress-free retirement mindset.

Even today, with Buffett no longer running day-to-day operations at Berkshire Hathaway, Coca-Cola remains one of Berkshire's largest and longest-held positions. And in 2026, the stock is once again showing why it fits so neatly into Buffett's investing philosophy.

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Buffett's long love affair with Coca-Cola

Buffett famously began buying Coca-Cola shares in the late 1980s, eventually amassing a stake that turned into one of Berkshire Hathaway's cornerstone holdings. Over the years, he has repeatedly praised the company's brand power, global reach, and ability to generate consistent cash flow.

One of Buffett's most quoted investing principles helps explain his long-standing attraction to Coca-Cola; he favors businesses so "wonderful that an idiot can run them." Coca-Cola's products are sold in virtually every country in the world, its brand is instantly recognizable, and demand for its beverages tends to hold up even during economic slowdowns.

That kind of predictability is exactly what Buffett looks for.

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A dividend machine Buffett can count on

A major reason Buffett loves Coca-Cola is its dividend track record. Coke is a "Dividend King," meaning it has increased its dividend for more than 60 consecutive years. That kind of consistency is rare and incredibly valuable for long-term investors.

Coca-Cola pays dividends quarterly, and management has raised the payout almost every year, even during challenging economic periods. That steady growth matters more than chasing the highest yield for income-focused investors.

For Berkshire Hathaway, those dividends translate into hundreds of millions of dollars in annual income, cash that can be reinvested elsewhere without selling a single share. It's a textbook example of Buffett's preference for businesses that quietly compound wealth over time.

Coca-Cola's performance in 2026

Coca-Cola has so far been off to a strong start in 2026. Shares are up around 12% year-to-date, trading near the upper end of their 52-week range. That performance stands out for a consumer staples stock, a sector often viewed as defensive rather than high-growth.

What's driving the momentum? Coke continues to benefit from pricing power, global distribution, and steady demand across both developed and emerging markets. Even as consumers adjust spending habits, beverages remain a small, affordable indulgence, one reason Coke's sales tend to be resilient.

KO stock's steady climb in early 2026 reinforces why Buffett has always viewed Coca-Cola as a "sleep-well-at-night" holding rather than a short-term trade.

Coke's sales strength and global reach

Coca-Cola sells products in more than 200 countries, giving it a level of diversification few companies can match. Its portfolio extends well beyond traditional soda, including water, sports drinks, juices, teas, and low- and no-sugar options.

That diversification has helped Coke adapt to changing consumer preferences without abandoning its core brand identity. While sugary soda consumption has slowed in some markets, growth in zero-sugar products and non-carbonated beverages has helped offset that trend.

For Buffett, that adaptability matters. He has often emphasized that great companies don't need to reinvent themselves every year; they just need to protect their competitive moat and evolve gradually.

Past performance tells the story

Coca-Cola isn't a stock that delivers eye-popping short-term gains. Instead, its appeal lies in decades of steady compounding.

Over the long run, KO shares have rewarded investors through a combination of gradual share price appreciation, reliable and growing dividends, and lower volatility than the broader market.

Why Coke still fits Buffett's philosophy today

Even as Buffett has stepped back from day-to-day leadership, his influence on Berkshire's portfolio remains clear. Coca-Cola checks nearly every box he has preached for years: a globally dominant brand with predictable cash flows, and a shareholder-friendly dividend policy.

Coke doesn't need to dominate headlines to perform. It simply keeps selling beverages, raising prices modestly, and returning cash to shareholders, year after year.

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Is Coca-Cola still worth owning in 2026?

Coca-Cola isn't built for investors chasing explosive growth. What it does offer, however, is stability, reliable income, and long-term dependability.

The stock's solid performance in 2026, combined with its decades-long dividend growth streak, shows why Buffett has never felt the need to sell. In uncertain markets, businesses like Coca-Cola often shine precisely because they're boring in the best possible way.

Bottom line

Coke has spent decades doing exactly what Buffett values most: generating cash, growing dividends, and protecting its brand advantage.

With KO shares up double digits so far in 2026 and another dividend increase likely on the horizon, Coca-Cola continues to prove why it remains one of Buffett's most trusted long-term investments, and why many investors still follow his lead when building wealth.

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