Why Warren Buffett Still Drinks Coca-Cola🥤 — and Owns It Too

I know the news today is all about AI and how ChatGPT will be modeling soon. But in all that hype this morning, you may have missed the other (far more boring) news - Coca-Cola continues to kill it. Today's announcement quietly reminded everyone why Warren Buffett has never bet against it.

https://www.investopedia.com/coca-cola-earnings-beat-expectations-the-stock-is-rising-toward-2025-highs-11833635

Earnings beat expectations, volumes ticked up, and margins expanded — not exactly headline-grabbing stuff… but that’s the point. So what makes Coke so powerful — and why does it keep showing up in valuation discussions year after year?

1️⃣ Predictable Cash Flows

Coke doesn’t rely on moonshots or hype cycles. Its global distribution and brand moat make revenue streams steady and forecastable — the dream input for any DCF.

2️⃣ Pricing Power & Margin Discipline

Even in inflationary years, Coca-Cola managed to raise prices without losing customers. That’s not luck — that’s brand equity translated into gross margin resilience.

3️⃣ Dividend Compounding

Warren Buffett earns more than $800 million per year in Coca-Cola dividends. His original stake cost around $1.3 billion — meaning he gets over 50% of his cost basis back in cash every year (roughly $93,000 an hour).

That’s the power of patient compounding.

When I train bankers and consultants on valuation, I remind them:

“You can’t model charisma or hype — but you can model consistency.”

Coca-Cola’s latest quarter was a reminder that boring is beautiful when your spreadsheet knows how to appreciate it.

So as we all chase the next AI stock (and figure out how to model them), here’s a toast 🥤 to the company that proves fundamentals — and dividends — still matter.