Shares of beverage giant Coca-Cola Co KO hit an all-time high on Thursday. The milestone could help investor Warren Buffett be well on his way to beating the S&P 500 once again in 2025.
For decades, Coca-Cola has been a staple in Buffett’s Berkshire Hathaway Inc. BRKBRK portfolio. Here’s a look back at the firm’s very first purchase and how investors would have done had they invested in Coca-Cola stock when Buffett did.
What Happened: Berkshire Hathaway’s portfolio includes holdings in top public companies such as Coca-Cola, Apple Inc, American Express and more. It also owns many well-known companies, including Dairy Queen, Duracell, GEICO and Fruit of the Loom.
In 1988, Buffett and Berkshire Hathaway made a splash by buying shares of Coca-Cola. By the end of the year, Berkshire Hathaway had acquired 14,172,500 shares at an average price point of $41.81.
In an annual letter that year, Buffett, who is said to drink five cans of Coke or Cherry Coke daily, addressed the purchase of Coca-Cola shares.
“In 1988, we made major purchases of Federal Home Loan Mortgage Pfd and Coca-Cola. We expect to hold these securities for a long time,” Buffett said. “In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
Berkshire Hathaway would continue to add to its Coca-Cola position over the following years and see its share count blossom from several stock splits.
The firm now owns 400 million Coca-Cola shares, making up around 10.9% of its portfolio. Berkshire Hathaway owns over 9% of Coca-Cola’s shares.
Read Also: Coca-Cola Pops In Q4—Revenue Soars 6%, CEO Hails ‘All-Weather Strategy’
Investing $1,000 in Coca-Cola: Buffett’s big bet in 1988 marked one of the investor’s largest bets on a public company.
If a person had invested at the same price and time Berkshire Hathaway had purchased its shares, that investor would have been pleasantly rewarded today.
A $1,000 investment at the time could have purchased 23.92 shares of Coca-Cola. Shares of Coca-Cola split 2-for-1 in 1990, 1992, 1996 and 2012. The stock splits would have turned the $1,000 investment into 382.72 shares.
Today, the $1,000 investment would be worth $27,969.18, based on a price of $73.08 at the time of writing, and not including dividends.
The investment would be up a staggering 2,696.9% over the last 37 years.
Not every investment Buffett makes is a winner. Still, the legendary investor proves that many of Berkshire Hathaway’s top holdings enjoy a nice return on investment when held for many years.
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This article was previously published by Benzinga and has been updated.
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