With a proven investing strategy and patience to let it play out, amazing feats can be achieved. Investors can look no further for an example than Berkshire Hathaway's (BRK.A 0.30%) (BRK.B 0.33%) chief executive officer and chairman, Warren Buffett, who has routinely placed among the top 10 richest individuals in the world. 

With a stake valued at $23.8 billion, the beverage giant known as Coca-Cola (KO 0.54%) is the fourth-largest position in Berkshire Hathaway's portfolio. But could the Dividend King be right for your portfolio? Let's dive deeper into the company's fundamentals and valuation to try to get an answer to this question. 

A stacked product lineup is pushing revenue and earnings higher

Since its founding in 1886 in Atlanta, Georgia, Coca-Cola has emerged as the most dominant beverage company in the world. Over the last century, it expanded via acquisitions and new product launches from its eponymous Coca-Cola brand to more than 200 brands in 200-plus countries and territories. These well-known brands include the bottled water brand Dasani, the sports drink brand Powerade, and the juice brand Minute Maid.

Coca-Cola posted $11.1 billion in net revenue in its third quarter ended Sept. 30, which equates to a blistering 10.2% year-over-year growth rate. How did the mega-cap company pull off double-digit net revenue growth during the quarter? 

Coca-Cola's numerous billion-dollar brands are enjoyed on a daily basis by countless consumers. A shift toward higher-priced away-from-home consumption channels and price increases led to a 12% increase in net revenue. Consumers tolerated these price hikes well, as evidenced by a 4% increase in unit case volume for the quarter. The company's acquisition of the remaining ownership interest in the sports drink brand BodyArmor added 2% to net revenue in the quarter.

The one factor that negatively affected Coca-Cola's net revenue during the quarter was foreign currency conversion. The robust U.S. dollar led to an 8% headwind on the company's net revenue for the quarter.

Coca-Cola recorded $0.69 in non-GAAP (adjusted) diluted earnings per share (EPS) in the third quarter. For context, this was a 6.2% year-over-year increase in adjusted diluted EPS. A more rapid increase in the cost of goods sold category (14.8%) than in net revenue led the company's net margin nearly 90 basis points lower over the year-ago period to 27.2%. That explains why adjusted diluted EPS growth fell behind net revenue growth during the quarter. 

As Coca-Cola further strengthens its competitive position within the global beverage market, analysts are optimistic about its future. In fact, the consensus for Coca-Cola is 5% annual adjusted diluted EPS growth for the next five years.

Three people toasting with glasses of cola.

Image source: Getty Images.

Coca-Cola's dividend won't be losing its fizz anytime soon

Coca-Cola offers income investors a 3% dividend yield, which is far more than the S&P 500 index's 1.7% yield. The company should also deliver solid dividend growth in the years to come.

This is because Coca-Cola's dividend payout ratio will come in around 71% in 2022, which leaves funds for business growth and debt reduction. That's why I believe that the company's dividend will grow in line with its earnings moving forward. 

The stock is a decent value

Coca-Cola is a fundamentally sound business. And the stock's valuation seals the deal to make it a buy for income investors.

Coca-Cola's forward price-to-earnings (P/E) ratio of 23.5 is slightly below the non-alcoholic beverages industry average forward P/E ratio of 25. Given that the company is growing steadily and is a Dividend King, it arguably deserves a higher valuation multiple from the market.