Besides the operating businesses that it fully owns, Berkshire Hathaway also has a massive $281 billion equities portfolio. Investors pay close attention to the companies here, as they could present potential buying opportunities.
There's one dominant business that Warren Buffett is undoubtedly a huge fan of, as evidenced by his conglomerate owning 400 million shares currently worth $29 billion. This single company represents 10% of Berkshire's portfolio.
Can this top Buffett stock make you a millionaire one day?
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Buffett's huge stake
Quenching Buffett's thirst is none other than Coca-Cola (KO 0.64%). Berkshire has held a position for quite some time. Those 400 million shares are a boon. Because the beverage giant pays a dividend that has increased in 63 straight years and that yields 2.86%, Berkshire brings in $816 million in annualized income. No one will have an issue with this passive flow of money that requires zero effort.
In total, Coca-Cola spent $8.4 billion just on dividends in fiscal 2024. This is a gargantuan sum that only very profitable companies can handle. In the past three years, Coca-Cola's net profit margin averaged 23%, which is superb. I'm sure there is no shortage of businesses that wish they had that kind of bottom-line performance.
As stable as they come
There's no sugarcoating it. Today's economic environment doesn't really give investors reasons to be very optimistic. There is an ongoing trade war between the U.S. and its trading partners that makes things uncertain. Credit card delinquencies are close to a 10-year high. And consumer sentiment is at a low. Understanding the current backdrop might make investors want to add some stability to their portfolios.
Here's where Coca-Cola might look very interesting. It possesses a sustainable competitive advantage in its brand. Being the market leader with over 200 different drink brands that are offered in every corner of the world helps it achieve unmatched visibility and consumer mindshare. It also helps that Coca-Cola is a master when it comes to marketing and getting its message across, an expression that emphasizes happiness when consuming its beverages.
As a result, the business has historically been able to flex its pricing power, even in economic scenarios that aren't exactly robust. During the first quarter, volume was up 2%. But pricing and mix had a positive 5% impact. Coca-Cola could probably raise its prices indefinitely, within reason, and not lose customers thanks to their loyalty to the brand.
This would probably be true in a recession as well. Coca-Cola experiences relatively stable demand. For example, during the Great Recession, revenue dipped slightly in 2009. But it bounced right back after. The market appears to be picking up on the belief that Coca-Cola might be a safe stock to own. Shares are up 15% in 2025 (as of June 4), excluding the dividend.
Thirsty for a million
Every investor wants to generate huge wealth from their holdings. Having a long-term mindset, while also being able to invest early and at frequent intervals, can raise your chances. However, don't bank on a single company taking you to the promised land.
With Coca-Cola, dividend investors have a lot to get excited about. This company can generate steady income far into the future.
For those who want to become millionaires, on the other hand, it's best to look elsewhere. This isn't a stock that's going to experience significant capital appreciation.
Coca-Cola's stock price is up just 75% in the past decade. That's nothing to write home about. A key reason for this is a lack of strong growth prospects. This is a very mature enterprise that operates in a very mature industry, limiting investor returns.
