When Warren Buffett first took the plunge and invested in Coca-Cola (KO) back in 1988 through his company (BRK.A)(BRK.B), he likely didn’t know the full extent to which the investment would pay off over the decades. But for those who followed his lead and put just $1,000 into Coca-Cola stock at the time, the returns today are nothing short of impressive. Here’s a look at just how much that investment would be worth today.
In 1988, Coca-Cola shares were trading at around $2.45 each, adjusted for stock splits over the years. With $1,000, an investor could have purchased roughly 408 shares. Fast forward to 2023, and Coca-Cola's stock price has risen significantly, now trading at about $66 per share.
Calculating the Gains
With today’s share price, those 408 shares would be worth approximately $26,928 without even considering the impact of dividends.
One of Coca-Cola’s hallmarks as an investment has been its steady dividend payments. Coca-Cola has long been a dividend aristocrat, raising its dividend every year for over half a century. Assuming dividends were reinvested over these 35 years, that initial $1,000 investment would be worth even more. With dividend reinvestment, you'd be looking at a whopping $67,641 balance from a mere $1,000 investment. Coca-Cola currently has a 2.86% dividend yield, with an average of 3% and 4%.
The Influence of Warren Buffett
Warren Buffett’s faith in Coca-Cola was a calculated bet on a brand with global reach, consistent demand, and robust pricing power. His initial investment of $1 billion in Coca-Cola has grown into a multi-billion-dollar holding for Berkshire Hathaway, thanks to both stock appreciation and dividends.
Buffett’s Coca-Cola investment serves as a prime example of the long-term potential in blue-chip stocks, especially those with dependable dividends. Had an everyday investor followed his lead with just a modest $1,000, they’d now have a small fortune—demonstrating how investing in stable, dividend-paying companies can yield impressive returns over the long haul.
For those looking to build wealth, Buffett’s Coca-Cola story is a testament to the power of patience and picking the right companies. It shows that a single strategic decision can pay off for decades, especially in industries that weather economic changes and maintain a strong market presence.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
